Run, Brad, Run!
Run, Brad, Run!
A few years ago we announced our support of a charity called the Accelerated Cure Project for Multiple Sclerosis (see the post about it here and learn more about Accelerated Cure here). While we have a strong culture of giving back to the community at Return Path and do that in several ways, we chose this charity as the main beneficiary of our corporate philanthropy efforts for three reasons:
- We wanted to support research into finding a cure for MS to honor and support one of our earliest colleagues, Sophie Miller Audette who was diagnosed with MS about 5 years ago (and is still going strong as one of our key sales directors!) – and since then, two other members of the Return Path extended family have also been diagnosed with MS
- We wanted to support an organization with a focused mission and one where our contributions could really make a difference
- Accelerated Cure has a very entrepreneurial, innovative culture that’s consistent with our own – and a solution-oriented approach to their cause that resonates with our business philosophy
We got introduced to Accelerated Cure by Brad Feld, one of Return Path’s venture investors, who is a friend of Art Mellor, Accelerated Cure’s founder and CEO. Brad’s an interesting guy for many reasons, but one reason is that he has a goal of running 50 marathons (one in each state) by the time he’s 50. He has eight years and 40 marathons to go, and to make it a little more significant he decided to try and drum up some sponsorships for his quest and donate the money to Accelerated Cure.
Return Path has decided to be one of Brad’s anchor tenant sponsors by pledging $1,000 for every race he completes. This is half of Brad’s goal of $2,000 per race, and we hope it will inspire others to donate so he can beat his goal. Of course, Brad wants to do more than just run these marathons – he wants to, well, accelerate his performance. So, taking a page out of the VC handbook, we’re setting up an incentive program for Brad of an additional $500 donation for every race that he completes in less than four hours.
Besides liking both Brad and Accelerated Cure, this particular vehicle for donating money is especially meaningful to us. A good number of Return Path employees past and present have run marathons and even competed in triathlons and Ironman competitions (including yours truly, but in a way that certainly makes me want to keep my day job). And Seth Matheson, Accelerated Cure’s new development director who has MS, is an avid marathoner who is contemplating an Ironman competition himself. And as I always tell our team members, running a startup is a marathon, not a sprint!
You can follow Brad’s progress – and make a donation yourself – here.
Book short: Blink
Book short: Blink
Blink, by Malcolm Gladwell, is a must read for marketers, entrepreneurs, and VCs alike, just as is the case with Gladwell’s first book, The Tipping Point.
Where The Tipping Point theorizes about how humans relate to each other and how fads start and flourish in our society, Blink theorizes about how humans make decisions and about the interplay between the subconscious, learned expertise, and real-time inputs. But Gladwell does more than theorize — he has plenty of real world examples which seem quite plausible, and he peppers the book with evidence from some (though hardly a complete coverage of relevant) scientific and quasi-scientific studies.
Blink for Entrepreneurs/CEOs: What’s the most critical lesson in Malcolm Gladwell’s Blink, as it relates to entrepreneurs/CEOs? It’s about bias in hiring. Most of us make judgments about potential new hires quite quickly in the initial interview. The symphony example in the book is the most painfully poignant — most major symphony orchestras hired extremely few women until they started conducting auditions behind a screen. It’s not clear to me yet how to stop or even shrink hiring bias, but I suspect the answer lies in pre-interview work around defining specific criteria for the job and scoring all candidates on the same set of criteria.
Blink for VCs: What’s the most critical lesson in Malcolm Gladwell’s Blink, as it relates to VCs? It’s about picking companies to back. Even VCs who are virtuosos, as Gladwell would call them, can make poor judgments on companies to back based on their own personal reaction to a company’s product or service, as opposed to the broader marketplace’s reaction. Someone poured a whole lot of money into Webvan, Pets.com, eToys, and the like.
Blink for Marketers: What’s the most critical lesson in Malcolm Gladwell’s Blink, as it relates to Marketers? It’s the importance of multivariate regression testing. No, really, I’m not kidding, although there’s no doubt a less math-y way of saying it — “test everything.” The Coca-Cola Company thought they were doing the right thing in creating New Coke because they were losing the Pepsi Challenge. But what they didn’t realize was that Pepsi (unintentionally or not) had suckered them into believing that the single-sip test was cause for reengineering a century of product, when in reality Coke was probably just being out-advertised. Christian Brothers Brandy was going out of its mind losing market share to competitor E&J until someone realized that they just needed to change the shape of their bottle.
If you haven’t yet done so, go buy the book! It’s a very quick read and incredibly thought provoking. And if you haven’t yet read The Tipping Point, it’s a must as well.
A Couple Tweaks to Running Great Board Meetings
I love innovation, and process is no different than product or business model in that regard. I’ve run and attended several hundred board meetings over the years, both those of companies where I’ve been CEO or Chairman, and those where I’m a director. I’ve written a lot about how I like running board meetings in Startup CEO, and as I mentioned the other day, I’m a co-author of a Second Edition of Startup Boards: A Field Guide to Building and Leading an Effective Board of Directors, which is coming out in June and is available to pre-order now, along with Brad Feld and Mahendra Ramsinghani.
There are two adaptations I’ve made to my standard board routines in the last year or so, one driven by the pandemic and one not.
In olden times (that makes me sound like I’m 400 years old, but “pre-covid” sounds so clinical), I used to have a board dinner the night before or after every board meeting, and of course, everything was in person. That was a really important ritual in my mind towards the end of building the board as an effective team, where people on the team know each other as people, share things going on in their lives, share vulnerabilities, and develop bonds of trust. Without regular in-person meetings and dinners or social events, that gets a lot harder. Even when we get back to “normal,” I imagine the most we’ll do in-person board meetings is 1-2x/year.
What’s the zoom version of this?
We now do two 30-minute Executive Sessions (directors only) one before the board meeting officially starts and observers and team join, as well as the traditional one after the meeting ends. The purposes of the two sessions are different. The standard post-meeting Executive Session follows up on the meeting and has me talk about business or team issues that I don’t want to talk about with the full group present or get feedback from the board. But the one before the meeting is almost entirely social. I try to come up with a different question or topic to get all of us talking that is not about Bolster. Last week’s meeting was a simple “what’s the best thing that’s happened to you so far in 2022, and what’s the worse?” One time I asked everyone to show a picture from their phone photo roll and talk about it. You get the idea. It’s not the same as a dinner, but it seems like an effective substitute given the medium.
The second adaptation, and full credit to Fred for suggesting this one a while back, is the post-meeting survey. Now immediately after every Board meeting, I send a simple Google form to each director with the following questions:
- What are 1-3 areas/specifics where we are doing well?
- What are 1-3 areas/specifics you’re concerned about or where we could do better?
- Did the board book have the right level of detail and commentary? Is there anything you’d like to see change about the format or the content?
- Did the meeting meet your objectives for learning and discussion?
- If not, why not?
- Do you have any other feedback for Matt at this time?
I get great feedback, almost immediately and always from all board members, while things are still fresh in everyone’s mind. I’m planning to do this whether or not the meeting is remote…although it’s definitely good when the meeting is remote, and things like Executive Session, Closed Session, and debrief with me after Closed Session are quick or sometimes rushed.
There’s always room for innovation, even in standard and time-tested processes like board meetings.
Book Short – Another Must-Read by Lencioni
Book Short – Another Must-Read by Lencioni
The Ideal Team Player: How to Recognize and Cultivate The Three Essential Virtues (hardcover,kindle is Patrick Lencioni’s latest and greatest. It’s not my favorite of his, which is still The Advantage (post,buy ), but it’s pretty good and well worth a read. It builds on his model for accountability in The Five Dysfunctions of a Team (post,buy)and brings it back to “how can you spot or develop and a good team player?”
The central thesis of the book is that great team players have three attributes – hungry, humble, and people-smart. While I can’t disagree with those three things, as with all consultants’ frameworks, I sound two cautionary notes: (1) they aren’t the absolute truth, just a truth, and (2) different organizations and different cultures sometimes thrive with different recipes. That said, certainly for my company, this framework rings true, if not the only truth.
Some great nuggets from the book:
-The basketball coach who says he loves kids who want to come to practice and work as hard as they can at practice to avoid losing
-The concept of Addition by Addition and Addition by Subtraction in the same book – both are real and true. The notion that three people can get more done than four if the fourth is a problem is VERY REAL
-When you’re desperate for people, you do stupid things – you bring people on who can get the job done but shouldn’t be in your environment. I don’t know a single CEO who hasn’t made this mistake, even knowing sometimes that they’re in the process of making it
The framing of the “edge” people – people who have two of the three virtues, but not the third, is quite good:
-Hungry and Humble but not People-Smart – The Accidental Mess Maker
-Humble and People-Smart, but not Hungry – The Lovable Slacker
-Hungry and People-Smart, but not Humble – The Skillful Politician
In my experience, and Lencioni may say this in the book, too (I can’t remember and can’t find it), none of these is great…but the last one is by far the most problematic for a culture that values teamwork and collaboration.
Anyway, I realize this is a long summary for a short book, but it’s worth buying and reading and having on your (real or virtual) shelf. In addition to the story, there are some REALLY GOOD interview guides/questions and team surveys in the back of the book.
Startup Boards: VCs and CEOs need to do their jobs!
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)
Book Short: Internet Fiction, part II
Book Short: Internet Fiction, part II
I hate to write a lame post, but here’s what I wrote earlier in the year about Eliot Peper’s first Internet thriller, Uncommon Stock:
Eliot Pepper’s brand new startup thriller, Uncommon Stock, was a breezy and quick read that I enjoyed tremendously. It’s got just the right mix of reality and fantasy in it. For anyone in the tech startup world, it’s a must read. But it would be equally fun and enjoyable for anyone who likes a good juicy thriller.
Like my memory of Hackoff, the book has all kinds of startup details in it, like co-founder struggles and a great presentation of the angel investor vs. VC dilemma. But it also has a great crime/murder intrigue that is interrupted with the book’s untimely ending. I eagerly await the second installment, promised for early 2015.
Having just finished that second installment, called Uncommon Stock: Power Play, basically I want to say “ditto.” Power Play was just as good as the first book, and now I can’t wait for the third. Where the first installment’s startup focus was around funding and founder dynamics, this one’s startup focus was around shipping product and customers. The thriller part was just as juicy.
It’s also kind of fun reading about the Boulder startup scene, especially from a writer who doesn’t and who has never spent a ton of time there. He gets some things remarkably accurate with crisp descriptions. I was kind of hoping for a cameo by Brad, at least in the form of a throw-away comment about the “long haired homeless-looking investor in the corner of Frasca.”
Book Short: Multiplying Your Team’s Productivity
Book Short: Multiplying Your Team’s Productivity
No matter how frustrated a kids’ soccer coach gets, he never, ever runs onto the field in the middle of a game to step in and play. It’s not just against the rules, it isn’t his or her role.
Multipliers: How the Best Leaders Make Everyone Smarter by Liz Wiseman and Greg McKeown (book, Kindle) takes this concept and drives it home. The book was a great read, one of the better business books I’ve read in a long time. I read a preview of it via an article in a recent Harvard Business Review (walled garden alert – you can only get the first page of the article without buying it), then my colleague George Bilbrey got the book and suggested I read it. George also has a good post up on his blog about it.
One of the things I love about the book is that unlike a lot of business books, it applies to big companies and small companies with equal relevance. The book echoes a lot of other contemporary literature on leadership (Collins, Charan, Welch) but pulls it into a more accessible framework based on a more direct form of impact: not long-term shareholder value, but staff productivity and intelligence. The book’s thesis is that the best managers get more than 2x out of their people than the average – some of that comes from having people more motivated and stretching, but some comes from literally making people more intelligent by challenging them, investing in them, and leaving them room to grow and learn.
The thesis has similar roots to many successful sales philosophies – that asking value-based questions is more effective than presenting features and benefits (that’s probably a good subject for a whole other post sometime). The method of selling we use at Return Path which I’ve written about before, SPIN Selling, based on the book by Neil Rackham, gets into that in good detail. One colorful quote in the book around this came from someone who met two famous 19th century British Prime Ministers and noted that when he came back from a meeting with Gladstone, he was convinced that Gladstone was the smartest person in the world, but when he came back from a meeting with Disraeli, he was convinced that he (not Disraeli) was the smartest person in the world.
Anyway, the book creates archetypal good and bad leaders, called Multipliers and Diminishers, and discusses five traits of both:
- Talent Magnet vs. Empire Builder (find people’s native genius and amplify it)
- Liberator vs. Tyrant (create space, demand the best work, delineate your “hard opinions” from your “soft opinions”)
- Challenger vs. Know-It-All (lay down challenges, ask hard questions)
- Debate Maker vs. Decision Maker (ask for data, ask each person, limit your own participation in debates)
- Investor vs. Micromanager (delegate, teach and coach, practice public accountability)
This was a great read. Any manager who is trying to get more done with less (and who isn’t these days) can benefit from figuring out how to multiply the performance of his or her team by more than 2x.
Book Short: Steve Jobs and Lessons for CEOs and Founders
Book Short: Steve Jobs and Lessons for CEOs and Founders
First, if you work in the internet, grew up during the rise of the PC, or are an avid consumer of Apple products, read the Walter Isaacson biography of Steve Jobs (book, kindle). It’s long but well worth it.
I know much has been written about the subject and the book, so I won’t be long or formal, but here are the things that struck me from my perspective as a founder and CEO, many taken from specific passages from the book:
- In the annals of innovation, new ideas are only part of the equation. Execution is just as important. Man is that ever true. I’ve come up with some ideas over the years at Return Path, but hardly a majority or even a plurality of them. But I think of myself as innovative because I’ve led the organization to execute them. I also think innovation has as much to do with how work gets done as it does what work gets done.
- There were some upsides to Jobs’s demanding and wounding behavior. People who were not crushed ended up being stronger. They did better work, out of both fear and an eagerness to please. I guess that’s an upside. But only in a dysfunctional sort of way.
- When one reporter asked him immediately afterward why the (NeXT) machine was going to be so late, Jobs replied, “It’s not late. It’s five years ahead of its time.” Amen to that. Sometimes product deadlines are artificial and silly. There’s another great related quote (I forget where it’s from) that goes something like “The future is here…it’s just not evenly distributed yet.” New releases can be about delivering the future for the first time…or about distributing it more broadly.
- People who know what they’re talking about don’t need PowerPoint.” Amen. See Powerpointless.
- The mark of an innovative company is not only that it comes up with new ideas first, but also that it knows how to leapfrog when it finds itself behind. This is critical. You can’t always be first in everything. But ultimately, if you’re a good company, you can figure out how to recover when you’re not first. Exhibit A: Microsoft.
- In order to institutionalize the lessons that he and his team were learning, Jobs started an in-house center called Apple University. He hired Joel Podolny, who was dean of the Yale School of Management, to compile a series of case studies analyzing important decisions the company had made, including the switch to the Intel microprocessor and the decision to open the Apple Stores. Top executives spent time teaching the cases to new employees, so that the Apple style of decision making would be embedded in the culture. This is one of the most emotionally intelligent things Jobs did, if you just read his actions in the book and know nothing else. Love the style or hate it – teaching it to the company reinforces a strong and consistent culture.
- Some people say, “Give the customers what they want.” But that’s not my approach. Our job is to figure out what they’re going to want before they do. I think Henry Ford once said, “If I’d asked customers what they wanted, they would have told me, ‘A faster horse!’” People don’t know what they want until you show it to them. That’s why I never rely on market research. Our task is to read things that are not yet on the page. There’s always a tension between listening TO customers and innovating FOR them. Great companies have to do both, and know when to do which.
- What drove me? I think most creative people want to express appreciation for being able to take advantage of the work that’s been done by others before us. I didn’t invent the language or mathematics I use. I make little of my own food, none of my own clothes. Everything I do depends on other members of our species and the shoulders that we stand on. And a lot of us want to contribute something back to our species and to add something to the flow. It’s about trying to express something in the only way that most of us know how—because we can’t write Bob Dylan songs or Tom Stoppard plays. We try to use the talents we do have to express our deep feelings, to show our appreciation of all the contributions that came before us, and to add something to that flow. That’s what has driven me. This is perhaps one of the best explanations I’ve ever heard of how creativity can be applied to non-creative (e.g., most business) jobs. I love this.
My board member Scott Weiss wrote a great post about the book as well and drew his own CEO lessons from it – also worth a read here.
Appropos of that, both Scott and I found out about Steve Jobs’ death at a Return Path Board dinner. Fred broke the news when he saw it on his phone, and we had a moment of silence. It was about as good a group as you can expect to be with upon hearing the news that an industry pioneer and icon has left us. Here’s to you, Steve. You may or may not have been a management role model, but your pursuit of perfection worked out well for your customers, and most important, you certainly had as much of an impact on society as just about anyone in business (or maybe all walks of life) that I can think of.
Half the Benefit is in the Preparation
Half the Benefit is in the Preparation
This past week, we had what has become an annual tradition for us – a two-day Board meeting that’s Board and senior management (usually offsite, not this year to keep costs down) and geared to recapping the prior year and planning out 2009 together. Since we are now two companies, we did two of them back-to-back, one for Authentic Response and the other for Return Path.
It’s a little exhausting to do these meetings, and it’s exhausting to attend them, but they’re well worth it. The intensity of the sessions, discussion, and even social time in between meetings is great for everyone to get on the same page and remember what’s working, what’s not, and what the world around us looks like as we dive off the high dive for another year.
The most exhausting part is probably the preparation for the meetings. We probably send out over 400 pages of material in advance – binders, tabs, the works. It’s the only eco-unfriendly Board packet of the year. It feels like the old days in management consulting. It takes days of intense preparation — meetings, spreadsheets, powerpoints, occasionally even some soul searching — to get the books right. And then, once those are out (the week before the meeting), we spend almost as much time getting the presentations down for the actual meeting, since presenting 400 pages of material that people have already read is completely useless.
By the end of the meetings, we’re in good shape for the next year. But before the meetings have even started, we’ve gotten a huge percentage of the benefit out of the process. Pulling materials together is one thing, but figuring out how to craft the overall story (then each piece of it in 10-15 minutes or less) for a semi-external audience is something entirely different. That’s where the rubber meets the road and where good executives are able to step back; remember what the core drivers and critical success factors are; separate the laundry list of tactics from the kernel that includes strategy, development of competitive advantage, and value creation; and then articulate it quickly, crisply, and convincingly.
I’m incredibly proud of how both management teams drove the process this year – and I’m charged up for a great 2009 (economy be damned!).
Book short: Proto Gladwell
Book short: Proto Gladwell
I’m sure author Robert Cialdini would blanch if he read this comparison, but then again, I can’t be the first person to make it, either. His book, Influence: The Psychology of Persuasion, is an outstanding read for any marketing or sales professional, but boy does it remind me of Malcolm Gladwell’s The Tipping Point and Blink (book; blog post). Of course, Cialdini’s book came out a decade before Gladwell’s! Anyway, Influence is a great social science look at the psychology that makes sales and marketing work.
Cialdini talks about sales and marketing professionals as “compliance practitioners,” which is a great way to think about them, quite frankly. He boils down the things that make sales and marketing work to six core factors: consistency, reciprocation, social proof, authority, liking, and scarcity.
Reciprocation – we hate being in a state of being beholden so much that we might even be willing to do a larger favor than the one done for us in order to remove the state. Think about “free gifts” in merchandising as an example of this, or being in a negotiation where someone trying to make a cold sale on you offers a fallback, smaller sale. For example, you don’t want to buy anything from the boy scout, but after you say no to the $5 raffle ticket and he asks about the $1 candy bar, you feel more obligated to buy the $1 candy bar because the boy scout has “given” on his initial request.
Consistency – once we have made a choice, personal and interpersonal pressures force us to back it up and justify our earlier decision – even more so when in writing or when declared to others. This is why marketers love getting testimonials from customers; the testimonial locks the customer in emotionally, as well as encouraging others to buy the product.
Social proof – if others think it’s correct, it must be correct, especially if those other people are like us. There are some scary examples in the book here, such as Reverand Jim Jones and The People’s Temple mass suicides. Gripping, but creepy.
Liking – we listen to people we like, and we like people to whom we’re similar or who are physically attractive. This section was especially reminiscent of Blink, but with different and more marketer-focused examples.
Authority – we have an extreme willingness to listen to authority, even when the authority isn’t quite relevant. This is why celebrity endorsements work so well.
Scarcity – we have a extreme motivation of fear of loss, either or something, or of the opportunity to have something. Who doesn’t like to keep doors open as long as possible?
The one place the book falls down a little bit is in the sections at the end of each chapter talking about how to resist that particular technique through jujitsu – the art of “turning the enemy’s strength to your advantage.” While nice in theory, Cialdini’s examples aren’t super helpful beyond saying “when you think you’re getting suckered, stop — and then say no.”
Overally, though, the book is well written and choc full of examples. Thanks to marketer Mallory Kates for sending me this great book!
Book Short: The Little Engine that Could
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.