Starbucks, Starbucks, Everywhere, Part II

In 2004, I blogged about Starbucks’ implausible Forbidden City location (post includes picture) in the heart of one of China’s most prominent national monuments.

Today, under pressure from the Chinese government, Starbucks announced that they’re closing the location, reflecting “Chinese sensitivity about cultural symbols and unease over an influx of foreign pop culture,” according to a very short blurb about this in today’s Wall Street Journal.

It must be indescribably different to live in a society that’s so tightly controlled.

9/11’s 10th

I wasn’t yet writing this blog on 9/11 (no one was writing blogs yet), and if I had had one, I’m not sure what I would have written.  The neighborhood immediately surrounding the World Trade Center had been my home for more than seven years before the twin towers fell, and it continued to be my home for more than seven years after they fell.  That same neighborhood was Return Path‘s home for its first 18 months or so, across two different offices.  Like all Americans, the attack felt personal.  Like all New Yorkers, it was in our face.  But it hit home in a different way for those of us who lived and worked in Lower Manhattan.

For the seven years after the attacks, I stopped by Ground Zero on the morning of 9/11 to reflect and memorialize the event.  I won’t be doing that this year — between living outside the city, the kids, and the likely overwhelming crowds, it doesn’t make sense.  So this post will have to suffice as this year’s reflection on the 10th anniversary of that awful day.

My memories from that day and the weeks that followed are a little jumbled now, as memories often are.  The things I remember most vividly, both personal and professional, are:

• The smell and the smoke.  Up until the New Year, over 3 months after the attacks, a plume of smoke was rising from Ground Zero, and the air had a putrid smell of burning everything — building materials, fuel, fragments of life
• I had left the city that morning to drive to a meeting in Danbury, Connecticut at Pittney-Bowes with our then head of sales, Dave Paulus.  We both received calls on our cell phones at the same instant from Mariquita and Pam telling us to turn on the news, that a plane had crashed into the World Trade Center.  For a while, everyone assumed it was an accident.  We continued with our meeting, although it kept getting interrupted with more bad news coming in via our senior contact’s assistant, until she wheeled a TV into the conference room so we could watch for ourselves
• I couldn’t get back into the city that night, so Dave and I crashed at my Grandma Hazel’s house in Westchester.  When I finally did get home, Mariquita and I met up and stayed with our friends Christine and Andrew on the upper west side and listened all night to the fighter planes cruising up and down the Hudson River, sentries on patrol
• When we finally could go back to our apartment, we had to go on foot from Canal Street south, and we had to show proof of residence (in our case, a copy of our lease) to get past the military guards.  With no traffic allowed and no subways running in Lower Manhattan for a week or two, the streets had an eerie emptiness about them.  The prevalence of national guardsmen and NYPD patrols toting machine guns made it feel like a war zone
• At work, where the Internet 1.0 meltdown was still in process, we were in the middle of negotiating a life-saving financing and acquisition of Veripost with Eric Kirby and George.  We hit the pause button on everything, but we picked back up and dusted ourselves off within a day and got those deals done within a few weeks and saved the company
• We had one junior employee in our New York office who got into his car on the afternoon of 9/11, drove to New Hampshire, and never contacted us again.  Just completely blew a fuse and dropped out.  It wasn’t until we tracked down his parents a few days later that we even knew he was safe and sound
• I was fortunate not to lose anyone close in the attacks, but my friend Morten lost over a dozen close friends who were all traders from his town in New Jersey.  He attended every single funeral.  How he got through that (and how others got through their many losses) remains beyond my comprehension, even today

The only thing I have really blogged about over the years related to 9/11 was my post Morning in Tribeca in 2004 when the skeleton of WTC7, the first rebuilt building, was going up.  Now that the Freedom Tower is rising, it finally feels like the Ground Zero site has great forward momentum and will in fact be fully renewed in a few years once the bulk of this construction is done and the tenants have moved in.  That will be a great day for New York, and for America.

Feedburner…They’re Real AND They’re Spectacular

Sometime in early 2004, I met Dick Costolo, the CEO of Feedburner.   We met about at the same time he also met Fred and Brad (I can’t remember who met who first), both of whom subsequently invested in the company.  We hit it off and had a number of informal and formal conversations over the past two and a half years about online media, the interplay of RSS and email and blogs, and entrepreneurship.  Feedburner and Return Path have developed a still-somewhat nascent partnership as well to bring ads in feeds and ads on blogs to Return Path’s Postmaster advertisers.

I was recently fortunate enough to be invited by Dick and his team to join Feedburner’s Board of Directors.  You can read the official note (as official as Feedburner gets!) on Feedburner’s blog here.  I am huge Feedburner fan and am jazzed to be part of their extended team.  The company is impressively leading its market of RSS publisher services and RSS advertising.  It’s all very reminiscent of the early days of email, and the early days of banner advertising before that.  More than that, though, I’ve been incredibly impressed with how the company operates.  They execute swiftly and flawlessly, they have a ton of fun doing it, and they have a very authentic voice and ethos for communicating with and handling their customers that I admire tremendously.  Very Cluetrain Manifesto.

In a much earlier posting, I wrote that entrepreneurs should join other boards as well to get more experience with how different organizations are run and how different board dynamics work, so I guess this means I’m following my own advice.  And so far, it’s all true — I’ve gotten a lot out of the first couple of meetings I’ve attended.  It’s a little weird for me to be the “old media” guy around the table (old meaning web and email, of course), so I’ll have to work hard to not be a Luddite and keep pace with all the new toys.

Book Short:  Be Less Clever

In Search of the Obvious: The Antidote for Today’s Marketing Mess, by Jack Trout, is probably deserving of a read by most CEOs.  Trout at this point is a bit old school and curmudgeonly, the book has some sections which are a bit repetitive of other books he and his former partner Al Reis have written over the years, he does go off on some irrelevant rants, and his examples are a bit too focused on TV advertising, BUT his premise is great, and it’s universally applicable.  So much so that my colleagues Leah, Anita, and I had “book club” about it one night last week and had a very productive debate about our own positioning and marketing statements and how obvious they were (they need work!).

The premise in short is that, in advertising:

Logical, direct, obvious = relevant, and

Entertaining, emotional = irrelevant

And he’s got data to back it up, including a great case study from TiVo on which ads are skipped and not skipped – the ones that aren’t skipped are from companies like Bowflex, Hooters, and the Dominican Republic, where the presentation of the ad is very direct, explanatory of the product, and clear.  His reasons why advertising have drifted away from the obvious are probably right, ranging from the egos of marketing people, to CEOs being to disconnected from marketing, to the rise in importance of advertising awards, and his solution, of course is to refocus on your core positioning/competitive positioning.

It is true that when the only tool in your box is a hammer, everything starts to look a bit like a nail, but Trout is probably right in this case.  He does remind us in this book that “Marketing is not a battle of products. It is a battle of perceptions”– words to live by.

And some of his examples of great obvious advertising statements, either real or ones he thinks should have been used, are very revealing:

• Kerry should have turned charges that he was a flip-flopper in 2004 around on Bush with the simple line that Bush was “strong but wrong”
• New Zealand: “the world’s most beautiful two islands”
• The brilliance of the VW Beetle in a big-car era and “thinking small”
• Johnny Cochrane’s winning (over)simplification of the OJ case — “If the glove doesn’t fit, you must acquit”
• BMW is still, 30 years later, The Ultimate Driving Machine
• “Every day, the Kremlin gets 12 copies of the Wall Street Journal. Maybe they know something you don’t know.”

If you are looking for a good marketing book to read as a refresher this year, this one could be it.  And if you’re not a very market-focused CEO, this kind of thinking is a must.

And for the record, the library of books by Trout and/or Reis (sometimes including Reis’ daughter Laura as well) that I’ve read, all of which are quite good, is:

• Positioning: The Battle for Your Mind – the original – a brilliant, short, classic
• The New Positioning (link, post) – good refresher on the original, gets into repositioning
• Marketing Warfare –
• The Fall of Advertising and the Rise of PR – excellent but pre-social media
• The 22 Immutable Laws of Branding –
• The 22 Immutable Laws of Marketing: Violate Them at Your Own Risk! –
• Bottom-up Marketing –
• Differentiate or Die: Survival in Our Era of Killer Competition –
• In Search of the Obvious: The Antidote for Today’s Marketing Mess – the current book

Startup CEO (OnlyOnce – the book!)

One of the things I’ve often thought over the years since starting Return Path in 1999 is that there’s no instruction manual anywhere for how to be a CEO.  While big company CEOs are usually groomed for the job for years, startup CEOs aren’t…and they’re often young and relatively inexperienced in business in general.  That became one of the driving forces behind the creation of my blog, OnlyOnce (because “you’re only a first time CEO once”) back in 2004.

Now, over 700 blog posts later, I’m excited to announce that I’m writing a book based on this blog called Startup CEO:  A Field Guide to Building and Running Your Company.  The book is going to be published by Wiley & Sons and is due out next summer.  The book won’t just be a compendium of blog posts, but it will build on a number of the themes and topics I’ve written about over the years and also fill in lots of other topics where I haven’t.

The catalyst for writing this book was Brad Feld.  Brad has been a friend, mentor, investor, and Board member for over a decade.  We’ve had many great times, meals, and conversations together over the years, not the least of which was staggering across the finish line together at the New York City Marathon in 2005.  Brad started writing books a few years ago, and I’ve been peripherally involved with them, first with Do More Faster:  TechStars Lessons to Accelerate Your Startup (I contributed one of the chapters) and then with Venture Deals:  Be Smarter Than Your Lawyer and Venture Capitalist (I wrote all the “Entrepreneur Perspective” sidebars).

Those are great books, and they’ve been incredibly well received by the global entrepreneurial community.  But then Brad got the bug, and now he’s in the middle of writing FOUR new books with Wiley that will all come out over the next year.  They are:

• Startup Communities:  Building an Entrepreneurial Ecosystem in Your City
• Startup Life:  Surviving and Thriving in a Relationship with an Entrepreneur
• Startup Metrics:  Making Sense of the Numbers in Your Startup
• Startup Boards:  Reinventing the Board of Directors to Better Support the Entrepreneur

These four books, plus the two earlier ones, plus Startup CEO, are all part of the Startup Revolution series.  While I’ll continue to do most of my blogging and posting here on OnlyOnce, I’d also encourage you to check out the Startup Revolution site and sign up to be a member of that community.  I’ll be doing some things on that site as well in connection with Startup CEO, and it’s a more concentrated place to post and comment on all things Startup.  In addition, we’ll be putting a bunch of add-ons to the book on that site closer to publication time.

I hope Startup CEO becomes a standard for all new CEOs.  I don’t think I have all the answers, but at least others can benefit by learning from my 13 years of successes and mistakes!  Now all I have to do is go write the darned thing.

Welcome to the new StartupCEO.com!

I started writing this blog in May of 2004 with an objective of writing about the experience of being a first-time entrepreneur — a startup CEO — inspired by a blog post written by my friend, long-time Board member and mentor Fred Wilson entitled “You’re only a first time CEO once.”  The blog and the receptivity I got along the way from fellow startup CEOs encouraged me to write a book called Startup CEO:  A Field Guide to Scaling Up Your Business, which was originally published in 2013 and then again as a second edition last year in 2020.

Today I am relaunching the blog as StartupCEO.com both to reflect that relevance of that brand as the book continues to get good traction in the startup ecosystem, and to reflect the fact that I’m now on my second startup as CEO, so “Only Once” doesn’t seem so fitting any more.

The web site has a very minimalist design – and I realize many of you read posts on either RSS or email — those will still operate the same as they have been (no new RSS feed).

As I approach the first anniversary of starting our new company, Bolster, where we help startup CEOs scale their teams, themselves, and their boards, I am recommitting to this blog and will try to post at least once a week.  Because there is a lot of overlap between this blog and Bolster’s blog (which I’d encourage you to subscribe to here either by email or RSS), posts will occasionally show up on both blogs, or I’ll put digests of Bolster blog posts here.  

But the Bolster blog will be broader and will also have many additional authors besides me, while this blog will remain distinct about some of the experiences I’m having as a startup CEO.

I realize I haven’t posted much lately.  As you may know, the title of this blog, OnlyOnce, comes from a blog post written by my friend and board member Fred Wilson from Union Square Ventures entitled You Are Only a First-Time CEO Once, which he wrote back in 2003 or 2004.  That inspired me to create a blog for entrepreneurs and leaders.  I’ve written close to 1,000 posts over the years, and the book became the impetus for a book that another friend and board member Brad Feld from Foundry Group encouraged me to write and helped me get published called Startup CEO:  A Field Guide to Scaling Up Your Business back in 2013.

Today is a special day in my entrepreneurial journey and in the life of the company that I started back in 1999 (last century!), Return Path, as we announce that Return Path has entered into a definitive agreement to be acquired by an exciting new company called Validity.  Press release is here.

Over almost 20 years, we’ve built Return Path into one of the largest and (I think) most respected companies in the email industry.  We’ve had a culture of innovation that has led to some groundbreaking products for our customers and partners to help make email marketing work better for consumers as well as marketers, and to help keep inboxes safe and clean for mailbox providers and security companies.  

But the company is unusual in many respects.  One of those is longevity. I’m not sure how many Internet companies started in 1999 are still private, backed and led by the same team the whole time, and generally in the same business they started in.  Another is our values-driven “People First” culture. From Day 1, we have believed that if we attract and retain and develop and invest in the best people, we will make our customers successful with great products and service, and that if we do right by our customers, we will do right long term by our shareholders.  While I know that not every employee who ever walked through our doors had a great experience, I know most did and hope that all of them realize we tried our best. Finally, I’m proud that our company gave birth to a non-profit affiliate Path Forward a few years back at the hands of executives Andy Sautins, Cathy Hawley, and Tami Forman.  Path Forward helps parents get back to work after a career break and helps companies improve their gender diversity and hiring biases and has already been a game changer for dozens of companies and hundreds of women.

Today, Return Path serves almost 4,000 customers in almost every country on the globe, with $100 million in revenue, profitable, and excited about the next leg of our brands’ and our products’ lives in the care of Validity.  If you haven’t heard of Validity before today, watch out – you will hear a LOT about them in the weeks and months ahead. They are an incredibly exciting new company with a vision to help tens of thousands of companies across the globe improve their data quality but also help them use data to improve business results.  That vision, inspired by a new friend, CEO Mark Briggs, is a wonderful fit for Return Path’s products and services and people.

To finish this post where I started, Fred’s exact words in that post which got this blog going were:

What does this mean for entrepreneurs and managers? It means that the first time you run a business, you should admit what you are up against. Don’t let ego get in the way. Ask for help from your board and get coaching and mentoring. And recognize that you may fail at some level. And don’t let the fear of failure get in the way. Because failure isn’t fatal. It may well be a required rite of passage.

All of that is true and has been great advice for me over the years.  But Fred left out one important piece, which is that entrepreneurs need to constantly thank the people around them who either work their butts off as colleagues in the business or who give them helpful advice and coaching.  Return Path’s journey has been a long one, longer than most, and the full list of people to thank is too long for a blog post.

I’ve noted Fred and Brad in this post already and I want to thank them and also thank Greg Sands from Costanoa Ventures, the third member of our “dream team” investor syndicate, for their friendship and unwavering support and good counsel for me and Return Path for almost two decades, as well as many other board members we’ve had over the years including long-time independent directors Jeff Epstein, Scott Petry, and Scott Weiss.

I want to thank my co-founders Jack Sinclair and George Bilbrey, and anyone who has ever been on my executive team, including long-time execs Ken Takahashi, Shawn Nussbaum, Cathy Hawley, Dave Wilby, Anita Absey, Angela Baldonero, Andy Sautins, Louis Bucciarelli, Mark Frein, and David Sieh.  There’s nothing quite like being in the proverbial foxhole with someone during a battle or two or ten to forge a tight bond. I want to thank Andrea Ponchione, my extraordinary assistant for 14 years, who keeps me running, sane, and smiling every day. I want to thank my executive coach Marc Maltz and the members of my CEO Forum for allowing me to be unplugged and for their friendship and advice.  I want to thank all of Return Path’s 430 employees today and over 1,300 ever for their hard work in building our company and culture together and for our 4,000 customers and partners for putting their faith in us to help them solve some of their biggest challenges with email.

Finally, no thank you list for this journey would be complete without saying a special thank you to my wonderful wife Mariquita and kids Casey, Wilson, and Elyse.  They deserve some kind of special honor for being inspirational cabin-mates on the entrepreneurial roller coaster without ever being asked if they were up for it.

This event may inspire me to begin writing more regularly again on OnlyOnce.  Stay tuned!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Here’s how I’m steering my board:

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

Companies need to Follow the Rule of 1s

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

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

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

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

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

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

Several years ago, I blogged about the training program we created for entry-level employees at Return Path, including an embedded presentation that we used to use (which I hope still works on the blog after all these years).

My brother Michael, who is an experienced manager and leader in the digital marketing space, recently sent me this email that I thought I’d share along the same lines to colleagues who are new to the working world. Enjoy!

I signed up to give advice on LinkedIn, and had someone just starting her first job reach out to me asking for general advice. I came up with the attached, and thought it might make for a good blog post on Only Once. If you decide not to publish it, I’m totally cool with that, but thought I would share it. After all, you’re only a brand new employee once too 🙂

1) Listen as much as possible. One of my mentors was fond of reminding me, “God gave you two ears and one mouth!” You should listen at least twice as much as you talk. Get to know your environment and the people around you. Take notes. Observe as much as possible. Learn how others are able to provide value to the organization. Start to anticipate little things that need to be done, and then do them before your manager asks you to. Then bit by bit, use your creativity to start to develop bigger hypotheses about how you can provide even greater value. 

2) “In business, the best story wins.” That’s another quote from a former manager of mine that I have found to be universally true. People in business respond to many things: numbers, bullet points, graphs and visualizations. But they respond to all of those things better when they are wrapped in stories. A great book you can read about storytelling is not about business at all. It’s called “Story” by Robert McKee, and it’s about screenwriting. Despite its apparent lack of applicability, I assure you it will help you think about characters, goals, antagonists, drama, obstacles, and structure — all the elements that go into a good story. When you can present your hypotheses in the context of a story, about your business, your customers, what you want to achieve, how you will do it, and why it matters, you will build consensus and show leadership. Another great book you can read here, again, not about business at all, is “Sapiens” by Yuval Noah Harari. It really opened my eyes about how so much of human history and behavior is really just based on stories. 

3) Be lean. There is another book you should read, called “The Lean Startup”, by Eric Ries. This one is actually about business :). As you think about your hypotheses, think of them in the context of how you can get to market quickly and inexpensively. How you can easily perform experiments that will test your hypotheses. Some of your experiments will not achieve your desired result, but it’s not a failure if you can learn something that helps you pivot towards success. Learnings enable you to adjust and refine your hypotheses as you try to find more value for your organization. 

4) “Objections are requirements” and a corollary “ask questions, don’t make statements.” These two gems are from that first mentor in item number one. Even if you can tell great stories, and even if you can devise and execute lean experiments that achieve business results or provide validated learnings, sometimes “haters gonna hate.” There will always be inhibitors to your bold ideas, with reasons not to proceed with your experiments. Inertia is part of human nature. But don’t fear! When an inhibitor comes along, the first thing you do is start to ask questions. “Why do you object to x?” “Oh,” they’ll say, “because of y and z.” Then ask another question “So if we can resolve y and z, then can we proceed with x?” Rather than repeating yourself and making more statements, by asking questions you’ve just turned their objections into requirements. That inhibitor no longer has their reasons not to proceed with your bold idea. You’ve turned them from antagonists into allies. This kind of creative problem solving is critical to getting your experiments into market, and building consensus and showing your leadership without alienating anyone. 

5) Ok I know I said four, but this one is optional (albeit important). Have fun! Do not take yourself or your role too seriously. Show your personality. Be yourself. That sort of general approach to work and life will draw people to you. They will be relaxed and comfortable around you. They will look forward to meetings with you. You will be successful if you are a good listener, a creative thinker with bold ideas, a fantastic storyteller, an agile experiment developer, and a leader who can build consensus and drive value. But if you are all those things, and you’re fun to be around? Then you will be unstoppable.

Thank you, Michael, for the contribution!

I was in a Board meeting last week (not Return Path’s), when one of my fellow directors came out with this gem:  “No one will ever thank us for keeping our prices low.”

When I first heard this, as is the case with most great quotes, I was drawn to its wit and simplicity.

But then I started thinking – is it true?  My mind first went to retail.  Having a reputation as being a low-cost provider can be in and of itself effective marketing – if that reputation is strong enough and your selection is wide enough, at least in retail-oriented industries, customers may consistently buy from you even if you’re not ALWAYS the low-cost provider.  Wal-Mart and Amazon prove this one out every day.  That’s the economic equivalent of customers thanking you for keeping your prices low.  Or pick an even more extreme example – gas stations, where there’s even more limited brand loyalty and even more product commoditization.  There’s really no reason to buy gas from a station who charges more than a couple pennies more per gallon than its neighbor.  No, thank you.

But in a B2B environment with smaller numbers of customers and smaller numbers of SKUs, this comment makes a lot more sense.  IT or Marketing departments don’t exactly go to the grocery store twice a week to buy data or software solutions!  I’m a big believer in the diminishing differences between the B2C and B2B universes, but this area may be one where the difference is still sharp.

Low prices might lure prospects to your doorstep, but they’re not going to keep buying your product if it’s not of sufficiently high quality.  Buyers measure quality in different ways, but here are three frameworks to think about as you contemplate the quality of your solutions relative to their prices:

• Is the quality of your product “above the bar”? Meaning, does it work well enough to get the job done that customers are hiring you to do?  If not, you do not have a sustainable business.  If so, see the next two questions
• Is the value of your product strong enough relative to the price you charge? Value-based pricing is increasingly difficult in an era of hyper competition, but if you can offer tailored enough solutions by vertical or of course by client, you can really optimize your pricing model
• Is your price/value equation strong enough relative to the price/value equation of a competing solution? Sometimes a “just barely good enough” solution can beat out a superior solution as long as it’s a LOT cheaper and the job the client needs done isn’t mission critical

The final thought vector in this equation is friction.  Go back to the consumer examples above – your switching cost to buy gas at Station A one week and Station B the next week is zero.  But in a B2B environment, there’s always at least some friction around switching products.  Friction could be implementation cost, time, execution risk.  It could be employee or customer training.  It could be integration with other systems or workflows.  It could even be desire to maintain a halo effect from doing business with you.  The more friction you have with your product, the easier it is to maintain higher pricing.

So my conclusion is that high prices are rarely going to chase someone away in a B2B, low client count/low SKU/moderate friction environment.  And that means my fellow director was spot-on:  no one will ever thank you for keeping your prices low.  All in, this comment was a great reminder for any B2B organization about how to think strategically about pricing.

Keeping Commitments

Today’s post is another in the series about our 13 core values at Return Path, about making commitments.  The language of our value specifically is:

We believe in keeping the commitments we make, and we communicate obsessively when we can’t

Making and keeping commitments is not a new value – it’s one of Covey’s core principles if nothing else.  I’m sure it has deeper roots throughout the history of mankind.  But for us, this is one of those things that is hard wired into the social contract of working here.  The value is more complicated than some of the other ones we have, and although it is short, it has three components that worth breaking down:

• Making commitments:  Goal setting, whether big company-wide goals, or smaller “I’ll have it to you by Tuesday” goals, is the foundation for a well-run, aligned, and fast-paced organization
  
• Keeping commitments:  If you can’t keep the overwhelming majority of your commitments, you erode the trust of your clients or colleagues and ultimately are unable to succeed
  
• Communicating when commitments can’t be met:  Nobody is perfect.  Sometimes circumstances change, and sometimes external dependencies prevent meeting a goal.  The prior two parts of this value statement are, in my mind, pay to play.  What separates the good from the great is this third piece — owning up loud and clear when you’re in danger of blowing a goal so that those who are counting on you know how to reset their own work and expectations accordingly
  

It’s worth noting on this one that the goal is as relevant EXTERNALLY as it is INTERNALLY.  Internal commitments are key around building an organization that knows how to collaborate and hand work off from group to group.  External commitments — from meeting investor expectations to client deliverables — keep the wheels of commerce flowing.

I’m enjoying articulating these values and hope they’re helpful for both my Return Path audience and my much larger non-Return Path audience.  More to come over time.