Counter Cliche:  How Much Paranoia is Too Much Paranoia?, Part II

After the original posting, one of my readers wrote in with the following question:

I was one of the first employees at a pre-funding enterprise social networking company, after having consulted on doing their business plan for them (not coming up with it; mainly turning the CEO and CTO’s engineer-speak into English). 

So with all that background, when you say “open book” to your employees, can you break that out some more?  I have an idea of what I think that means, and what it doesn’t, but I’d love to hear your thoughts on it too.

My thoughts on this are quite simple.  We are willing to share everything internally other than compensation.  We publish detailed monthly financials and reporting to the team, and we ask that they treat the information as extremely confidential.  We have had only good things come from this level of openness with our team.  Good ideas, good esprit de corps, and a radical reduction in fear of the unknown (the old "Looks like we had a bad quarter, does that mean I need to look for a job now?  Are we running out of money?"). 

In fact, I know one other CEO who goes so far as to publish an only-slightly modified version of his Board books to the entire company.

Transparency is a good thing.

In the Land of Too Many Conferences, This is a Good One

It’s rare that I’m sad to leave a conference — usually I can’t leave fast enough.  But such is my mood today leaving Mediapost’s third Email Insider Summit.

Our industry is way over-conferenced in general.  I’m guessing that our company’s full conference calendar has 40+ events on it over the course of a year.  It’s more than we can afford to exhibit at, participate in, speak at, attend.  We do our best, and what money we spend is much more carefully monitored and measured than it used to be, but usually it’s with that sick feeling in the pit of our collective marketing stomach that we’re throwing money away just because our competitors are there.

But the Email Insider Summit is different.  While there are some aspects of the show that I don’t love — four days is a long time, and three half days of golf and snorkeling is a little too heavy on the boondoggle side for my personal taste — the content and attendees are fantastic.  Mediapost’s formula of comping marketers and charging vendors very high prices to attend ensures an intimate, high level, and vendor-light crowd.  That’s a recipe for success in my book!

The two most interesting nuggets from today:

1. John Stichweh from Coca-Cola’s observation that brand marketing and direct marketing continue to rapidly converge, and that measurement of outcome (e.g., ROI) as opposed to measurement of process (e.g., GRPs or impressions) are gaining steam, never to look back.  I couldn’t agree more.  What can be counted will be counted.  And it can all be counted in the world of advertising, somehow.

2. Lisa Galli from CNET’s discussion of mobile marketing and what they’re doing to take advantage of the channel.  The best example I’ve heard in years of a marketer leveraging a medium is their new SMS Reviews product — just text message CNET1 the words Review xxx (insert name of product here), and you’ll get a text message back with a product review.  Now THAT ought to make shopping for electronics much more interesting.

I’m ready for more conferences like these, and fewer mammoth trade shows.

Do Business Books Suck for Entrepreneurs?

Ben thinks they do.  Some of his reasons are pretty good, but I’d challenge a few of them, or at least his finer points.

My experience over the years is that while most business books are not geared toward entrepreneurs, a good entrepreneur will figure out how to milk them for what they’re worth quickly and apply key learnings to his or her company. 

The reality is that running a startup or high growth company is a multi-faceted and incredibly dynamic experience, and having a bunch of outside inputs in the form of business book examples and theories can be really helpful. 

Even bad ideas can spur good thinking.

Education and Entrepreneurship

Fred posted his thoughts the other day that you don’t need a college degree to be a successful entrepreneur. He is clearly right in that one CAN be successful without it.  Gates, Zuckerberg, Dell have proven that. 

I’ve always said that I didn’t think an MBA was a prerequisite for a successful business career.  That’s easy for me to say, as I don’t have one despite many years of applying, deferring, cancelling, reapplying and general hand-wringing over whether or not to go in the mid-90s.  An MBA is probably a positive on a resume for the most part (hard to argue it’s a negative), but it’s not a prerequisite.  Every time I see “MBA preferred” on a job posting, I cringe (we never say that at Return Path).  Really?  You’d *prefer* to hire someone with an MBA over someone with two additional years of relevant work experience? 

That said, I’d note that there are things one gets out of a good college education that are critical to success in life.  Yes, they can be learned outside the classroom.  But unlike business school material, which is in many cases the stuff of work experience and more easily augmented by observation and the occasional business article or book (as far as I can tell), the things one learns in college which are applicable to entrepreneurship aren’t about the subject matter of the course.  They are things like:

– learning and applying new concepts quickly

– critical reasoning

– crisply presenting ideas

– respecting deadlines and guidelines

– understanding and appreciating other points of view

As with business school, these things *can* be learned outside a university environment, and certainly there are unusually talented people who have these traits hard wired.  But I do think the university environment cultivates and nurtures these skills in a way that is easier than the “do it yourself” world of teenage entrepreneurship. 

Five Years On

As of this past weekend, I’ve been blogging on OnlyOnce for five years.  My main reflection as I was thinking about it during this morning’s run is that blogging is different.  I started blogging to try out what was at the time the “new, new thing” (there were almost no CEO blogs at the time), just like I have tried out lots of other new technologies or web services from time to time over the years — from Skype to Facebook to Twitter to about 50 others.

You’ll never see a tweet from me about an anniversary of using Twitter.  Or any other comparable from that above list.  Blogging has ended up being fundamentally different.  It’s not just another expression of my status updates or another way to connect with friends and colleagues.  It’s become a core part of my business operating system, although I suppose that’s the case for many other tools as well. 

I think the main difference is that OnlyOnce has become a true form of creative expression for me.  It’s like (I imagine) writing a book or composing a piece of music. I’m not suggesting it’s high art, but I view it more as an ongoing project than most other online tools or sites I’ve tried out over the years.

Here’s to the next five years of it.

Vertical (Dis)Integration

A couple years ago, Dave Morgan wrote one of the best thought pieces on the future of the newspaper business in his Mediapost column.  Essentially his observation was that newspapers are an outdated vertical integration, and that to survive, smart papers would disaggregate into 5 separate companies and run each one as a separate business, taking on a new life unshackled from the newspaper:  local ad sales (they could own that franchise for the Yelps and Yodles of the world), local content (who better to syndicate local content?), local distribution (no other companies drop something on every doorstep every day), printing (still a business that requires scale), and digital.  It’s just a brilliant idea.

And it’s a shame none of them followed his advice, since they’re all going out of business now.

What occurred to me this week as I’m soaking in the goodness that is my new Amazon Kindle is that while newspapers may need to disaggregate to stay alive, Amazon is slowly amassing a strategy of very clever vertical integration that could well fuel its growth for decades to come.

The Kindle is brilliant vertical integration — it’s the device, the distribution, and the retail model all in one.  And if Amazon is smart, eventually once they have enough market share, they’ll just start doing deals directly with authors and cut out the publishing industry altogether and own the content as well.  They can hit both the long tail (with publishing and distribution costs approaching zero, the risk associated with signing a new untested writer for a revenue share deal are nil) as well as the head (cool place to release your newest book if you’re, say, Steven King).  And at that point, they’ll have a model that should produce an enormous amount of profit for them.

It’s interesting to look at these two situations in parallel — the transition of old media to new media, with one set of losers and a winner, where winning strategies are polar opposites.

Why Email Will Win the Day

I attended the same presentation as Fred where a great B2C marketer talked about how she got a 40:1 payback for every dollar spent on email marketing versus an 8:1 payback on search. As head of an email marketing company, it was music to my ears.

But the “finite issue” Fred highlights is actually a great opportunity more than it is a drawback. Most marketers still have email addresses for less than 25% of their full customer database, meaning that if we do our job as an industry, we should be able to increase the availability of email addresses threefold in the coming couple of years. With the inevitable scale efficiencies in email marketing, that 40:1 number can become much bigger, maybe even as high as 100:1, over time.

The challenge for the industry is that this kind of transformation isn’t easy. A lot of the low-hanging fruit of early online adopters is gone. This means marketers are going to have to do more to embrace permission and drive organic list growth if they want to keep pushing the email ROI metric forward. Not necessarily brain bending stuff, but there aren’t a lot of shortcuts for it, either, and it requires a different mindset than traditional advertising and direct marketing. In the end, it all comes down to respecting the consumer and delivering the value exchange to customers.

A Network of Teams, Not an Integrated System

We were in and out of the hospital a lot back in March/April for the last few weeks with one of our kids (she’s ok now).  One of us was with her 24 hours a day for the 10-11 days she was hospitalized, with lots of down time, which gave me lots of time to observe health care in action.  While she ultimately got very good care at a very good hospital, it was incredibly clear to me that the hospital functioned as a network of teams, not as an integrated system.

The nurses were great.  Followed their routine practices and responded to doctors’ orders on cue.  Same with the nursing assistants.  Same with the docs.  Same with the phlebotomists and labs.  Same with the hospital support staff.  But the hand-offs from one team to the next, and from one shift to the next within a team, were seriously lacking.

What was wrong with this?  Nothing was optimized around the patient.  I mentioned this to my father-in-law, who is an HMO executive, and he noted that the concept of “patient-centric care” was a hot topic in managed care right now — but that it had also been a hot topic 10-15 years ago, to no apparent end (and not just in this one hospital that we were at).  Seems like customer relationship management became a persistent priority in the rest of the business world years ago.  Why hasn’t this stuck in health care?

This was a great exercise for me in thinking about the customer-centric view of a business.  We talk here at Return Path about “stapling yourself to a customer” to see what they see.  Every business should go through that exercise at some level regularly to make sure they’re functioning as an integrated system as far as the outside world is concerned.

OnlyOnce is 8 years old this week, which is hard to believe. So it is fitting that I got halfway through a new post this morning, then a little alarm bell went off in my head that I had written something similar before.  The topic is around moderation versus extremes.  I first wrote about this topic in 2005 in a post called Shifting Gears but I have thought about it more recently in a different way. 

Instead of phrasing this as a struggle between “Meden Agan,” which is Greek for “everything in moderation,” and “Gor oder gornischt,” which is Yiddish for “all or nothing,” I’d like to focus here on the value of occasionally going to an extreme. And that value is around learning. Let me give three examples:

-We were having a buy vs. build conversation at work a few months back as we were considering an acquisition. Some people in the room had an emotional bias towards buy; others toward build. So we framed the debate this way:  “Would you acquire the company for $1 instead of building the technology?” (Yes!) “Would you buy it for $10mm?” (No!) Taking the conversation to the extremes allowed us to focus on a rational answer as opposed to an emotional one — where is the price where buy and build are in equilibrium?

– With my colleague Andrea, I completed a 5-day juice fast a few weeks back. It was good and interesting on a bunch of levels. But I came away with two really interesting learnings that I only got from being extreme for a few days:  I like fruits and veggies (and veggie juices) a lot and don’t consume enough of them; and I sleep MUCH better at night on a relatively empty stomach

– Last year, I overhauled my “operating system” at work to stop interviewing all candidates for all jobs and stop doing 90-day 1:1 meetings with all new employees as well. I wrote about this in Retail, No Longer. What finally convinced me to do it was something one of my colleagues said to me, which was “Will you be able to keep these activities up when we have 500 employees?” (No) “So what is the difference if you stop now and save time vs. stopping in 6 months?” Thinking about the extreme got me to realize the full spectrum

It may not be great to live at the extremes, but I find extremes to be great places to learn and develop a good sense of what normal or moderate or real is.

(I realize I’ve been relatively quiet since I started my new job in January…this is what I’ve been up to. It may be the most interesting job I’ve ever had…but more to come on that over time.)

I was at a recent Gartner CEO conference on AI in New York City, and one phrase keeps rattling around in my brain: “There is such a rapid pace of development that we are regularly seeing ‘obsolescence before maturity.'” In other words, by the time AI products reach early adoption in the market, they’re already obsolete.

But here’s the thing – while everyone’s racing to build the next AI breakthrough, they’re missing a massive problem hiding in plain sight. AI has fundamentally changed the content game. You can generate content faster than ever, but the risk has grown exponentially. Human review doesn’t scale at AI speeds. Companies need intelligent guardrails.

That’s why I’m excited to announce what we’ve been building at Markup AI.

The Problem No One’s Talking About

Let’s be honest about what AI does well and what it doesn’t. AI models are fantastic at content generation by the pound, but they’re not great at precision and quality. More importantly, AI can’t possibly check its own work for quality. As you know from using ChatGPT or Claude, when you push back on AI output, it responds “you’re absolutely right,” no matter what you say. That’s not exactly the kind of rigorous quality control you want for your enterprise content.

The writing assistant industry has been playing “small ball” for years – spell check, grammar, basic tone suggestions, looking at one sentence at a time as you’re writing content. They’ve ignored several elephants in the room: brand compliance, terminology management, risk management, and batch checking already-published content.

Enterprise content production and compliance is a massively fragmented problem. Companies have thousands of people who write publicly facing content and dozens of systems for authoring, storing, and publishing content on one hand; and multiple brand and policy rule books and thousands to hundreds of thousands of pieces of already-published content on the other.

We work with the world’s largest enterprises across technology, healthcare, financial services, and manufacturing – organizations that can’t afford content mistakes because the stakes are too high. One wrong sentence could mean litigation, regulatory issues, or a reputation crisis.

Markup AI: Your AI Watching Your AI

This is why we’re launching Markup AI – the first content guardian agent. Think of it as your AI watching your AI. We scan, score, and rewrite content to ensure it’s on-brand, compliant, and won’t create problems.

Fixing typos is great, but that won’t ensure your content doesn’t get you sued, fired, or create a reputation crisis. We’re making sure your content actually serves its purpose.

The name says it all: Editors markup documents. Lawyers markup documents. Writers markup their own documents. And developers regularly use markup languages and annotations. Markup AI will quickly become the standard for Content Guardian Agents in the AI space – helping companies to scan, score, and rewrite content that is consistent, authentic, and compliant, rapidly and at scale.

The Press Release announcing our launch and $27mm financing is here.

What Makes Us Different

Here’s what makes us different: we meet you where you already work. Through our API-first approach, Markup AI integrates into whatever content systems and workflows you’re using today. No rip-and-replace required.

We’re building the future of content creation – where speed doesn’t compromise safety. True AI-native solutions that tackle trust and risk head-on in an AI-first world with triggers for human-in-the-loop. Because at the end of the day, AI can write, but someone needs to ensure what it writes is actually right.

This is a Restart

This isn’t just a product launch – it’s a restart. A new AI-native platform, a new team, a new location, and a new brand. With years of linguistic engineering experience behind us in our prior business Acrolinx, the gold standard for enterprise content compliance, we’re excited to unveil our new native-AI brand and platform, Markup AI.

We’ve been at this for a while now, and we’re proud to announce that leading tech companies such as Amazon, Adobe, ServiceNow, Gainsight, Instacart, Coinbase, plus over 75 more AI-first companies have all asked for early access to our Content Guardian Agent and a number are already up and running.

The future of content is here – and it needs intelligent guardrails. We’re excited to show you what we’ve built and how Markup AI can help your organization navigate the AI content revolution safely and successfully.

Ready to see your AI watching your AI? Visit us at www.markup.ai to learn more, get an API key for free, and try out our Writer’s Playground or the API itself.

More to come on the restart journey. It’s an interesting one, full of lessons for Startup CEOs everywhere.

(This is a bonus quick 5th post, inspired by long time StartupCEO.com reader Daniel Clough, to the series that ended last week about Scaling CPO’s- the other posts are: When to Hire your First Chief People Officer, What does Great Look like in a Chief Privacy Officer, Signs your Chief Privacy Officer isn’t Scaling, and How I Engage With The Chief People Officer.)

As I’ve noted over the years, the Chief People Officer role is a tough one to get right and a tough one to scale with the organization if what you’re really looking for is a strategic business partner who can lead not just the important blocking and tackling in HR but innovates the people part of your organization, building new systems and programs, approaches recruiting as building great teams instead of filling seats, helps manage your company operating system, and developing and coaching leaders.

A number of later stage CEOs I mentor have come to me over the years when they have a sub-par Chief People Officer and said something like “I’m going to put HR under my CFO.” To me, that’s a bit of a cop-out – it’s acknowledging that the person in the role isn’t strong enough to be a full-throated executive, but the CEO doesn’t want to go through the hassle or expense of replacing them.

Here’s my answer when I hear that from a CEO: “Ok, then your CFO will actually now become your Chief People Officer.  You must have a Chief People Officer on the exec team reporting to you.”

There are few things about which I have a stronger point of view. Someone in your organization must have strategic oversight for human capital. If it’s not your head of HR and you can’t bear recruiting/replacing that person, then it needs to be whoever your put that person under. Or it’s you. But at even mid-scale companies, why would you take that responsibility on yourself?