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.

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!

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)

(This is the first in a series of three posts on this topic.)

Harry Potter was lucky.  He had, in Albus Dumbledore, the ultimate wise elder, in his corner.  Someone who could teach him how to be a better human being (er, wizard), how to be more proficient with his wand and spells, how to think strategically and defeat the bad guys.

All of us would benefit from having an Albus Dumbledore in our lives.  But most of us don’t — and most of the people we’d call on to be that wise elder in our corner aren’t capable of the full range of advice and counsel that Dumbledore is. 

Why work with a Coach or a Mentor?  I’ll start this post with a quick argument in favor of CEO Coaches and Mentors (sometimes called Advisors).  Even as a 20-something first-time CEO years ago, I was deeply skeptical of the value of a Coach, but that was in 1999 or 2000 when coaches weren’t so commonplace.  Now that their value seems much more obvious, and there are so many amazing Mentors and Coaches available, I’m surprised by how many CEOs I speak to still seem skeptical about their value.  Just think — the world’s greatest athletes, the ones who get paid zillions of dollars because they are the best in the world at something, use MULTIPLE coaches DAILY to perfect their craft and keep them focused.  Why should Rafael Nadal or Serena Williams have a trainer and a coach, but not you?

I’ve benefited over the years from the advice of more people than I can ever count or thank.  But when it comes to being a CEO, I have leveraged the counsel of a CEO Coach or Mentor principally in three different areas:

1. Functional topics on the craft of being a CEO from the lofty “how to run a board meeting” to the nitty gritty details of “how to do a layoff”
2. Developmental/behavioral topics like “how I show up as a leader in the organization,” or “how to be a better listener”
3. Team Effectiveness topics like “how do I get the most out of my leadership team,” or “why doesn’t Person X trust Person Y and how does that impact team performance?”

In some unusual circumstances, you can find a person who does all three of these things for you and can scale as you and your company grow.  But for the most part, getting all three of these things requires engaging two different people, and maybe even more mentors.  

What’s the difference between a CEO Mentor and a CEO Coach?  Counsel on Item 1 above — what I would call CEO Mentorship — almost certainly requires someone to have been a CEO — preferably multiple times, or for a long period of time, or through multiple stages of company growth, or two or three of those qualifiers.  This is the kind of person who can literally teach you how to do CEO things.  These people are super busy, they won’t have open ended amounts of time for you, but you should expect sage wisdom and answers when you need them.  And you can have more than one of them at a time, or change them out as your company evolves and your needs change.

Counsel on items 2 and 3 — what I would call CEO Coaching — frequently come together in a professional who is and has been for a while, a coach.  The person might have had a significant career in business before becoming a coach but wasn’t necessarily a CEO.  The person probably has some kind of academic grounding, like a Master’s degree in Organizational Development or Industrial Psychology, or a Certificate in Coaching.  This is the kind of person who can do things for you and your team like facilitate meetings, run assessments like Myers-Briggs or DISC, and coach other leaders on your team.  This person is dedicated to helping you be the best leader, professional, and CEO that you can be and must be both empathetic and comfortable pushing you hard.  

Sometimes you get mentorship and coaching in the same person, but almost only with CEO Coaches who are also CEO Mentors by my definition above.

Five signs you need a CEO Mentor and/or Coach:

• You are playing ‘whack-a-mole’ — running from crisis to crisis in your organization and are not able to make time to think, be current with email, or make time for important things like hiring senior executives
• Your board is getting frustrated with you, your team and/or the lack of progress in the business
• The company isn’t scaling as fast as it should
• Your leadership team is not a cohesive team and you are in the middle of all decisions
• The company has high employee turnover and/or poor reviews on Glassdoor 

Do yourself and your company a favor and invest in a CEO Coach and Mentor(s). It’s an investment in accelerating your own and your company’s success. In later posts, I’ll talk about how to hire and best leverage both Coaches and Mentors. 

Next post in the series coming:  How to Select a CEO Mentor or CEO Coach

(This is the second post in a series documenting the work I did in Colorado on the Governor’s COVID-19 Innovation Response Team – IRT.  Introductory post is here.)

Tuesday, March 17, Day 1

• Extended stay hotel does not have a gym.  Hopefully there is one at work
• Walking into office for the first time.  We are in a government building in a random town just south of Denver that houses the State Emergency Operations Center (SEOC) and the Department of Homeland Security and Emergency Management.  These are the teams who are on point for emergency response in Colorado when there is any kind of fire, flood, cyberattack, or other emergency
• 
• 
• MAJOR Imposter Syndrome – I don’t know anything about anything
• 7:45 meeting with Stan
• 8:15 department briefing
• Met two deputies – Kacey Wulff and Kyle Brown.  Both seem awesome. On loan from governor’s health care office and insurance department
• Team “get to know you” was 4 minutes long.  So different than calm normal 
• Emergency Operations Center in Department of Public Health
• Small open room with over 100 people in it and everyone freaking out about not following best practices – no social distancing
• 
• Leader giving remote guidelines
• Lots of “Sorry, who are you and why are you here?”
• Local ops leader Mike Willis excellent – calm, inspirational, critical messages around teamwork, self-management, check ego at the door (turns out he is a retired Brigadier General)
• HHS call – maxxed at 300 participants, people not getting through, leader had to ask people to volunteer to get off the line (oops)
• Lunch and snacks in mass quantities here – it’s not quite Google, but this part does feel very startup.  I wonder if the Emergency Ops Center does this all the time or just in a crisis. Guessing crisis only but still super nice.  Also guessing I will gain weight this week between this and all gyms in the state being closed down
• Lots of new people and acronyms
• Multiple agencies at multiple layers of government require a lot of coordination and leadership that’s not always there, but everyone was incredibly clear, effective, low ego.  A lot of overlap
• Got my official badge – fancy
• Jared calls – just spoke to Pence, his guy is going to call you – tell him what we need…”uh, ok, now all I have to do is figure out what we need!”
• Fog of War – this room is healthy and bustling and a little disconnected from what’s going on, no freak out
• Kacey and call from Lisa about Seattle being on “Critical Care” because they don’t have enough supplies, meaning they are prepared to let the sickest people die – oh shit, we can’t let that happen here (or is it too late?)
• Got oriented, sort of
• Slight orientation to broader command structure and team
• My charter and structure are a little fuzzy, guess that’s why I’m here to figure that out
• Late night working back at hotel.  Thinking I will become a power user of UberEats this week

Wednesday, March 18, Day 2

• Gym at work is closed along with all gyms everywhere.  Looks like a lot of hotel floor exercises are in order
• Ideas and efforts and volunteers coming in like mad and random from the private sector – no one to corral, some are good, some are duplicative, all are well intentioned.  Lots of “solve the problem 5 ways”
• Shelter in place?  Every day saves thousands of lives in the model – credibility with governor
• State-level work is so inefficient for global and national problems, but Trump said “every man for himself” basically when it comes to states
• Not feeling productive
• Productivity is in the eye of the beholder.  Kacey totally calmed me down. Said I am adding value in ways I don’t think about (not sure if she was just being nice!):
  • Connection to Governor really useful for crisis team
  • Basic management and leadership stuff good
  • Asking dumb questions
  • Out of the box thinking
  • Liaison to industry and understanding that ecosystem
  • Arms and legs
  • People used to working in teams on things – different expectations in general
• Ok, so maybe I am helping
• Colleague tells me about Drizly, the UberEats equivalent for alcohol delivery. Good discovery.

Thursday, March 19, Day 3

• Weird – my back feels better than it has in months.  Maybe it’s the pilates, but still, seems weird.  I wonder if the higher altitude helps. If so, we will be moving to Nepal. Have to remember to mention that to family later
• Governor Policy meeting 9 am – “Cuomo is killing it” – words matter – “shelter in place” and “extreme social distancing” debate
• “The models are wrong – so let’s average them”
• We need 10,000 ventilators. We have 700.  Uh oh.
• Raised issues around test types and team capacity…Gov expanded scope to include app and still pushing hard on test scaling.  Gov asked for proposal for expanded scope and staff by 4:30. Guess that’s the day today!
• Recruited Brad to lead Private Sector side of the IRT’s work. Important to have a great counterpart on that side. Glad he agreed to do it, even though he’s already vice chair of another state task force on Economic Recovery
• Senior Ops leader interrupts someone during daily briefing – quietly says to the whole room “not vetted, not integrated, not helpful” – incredible.  In the moment, in public which normally you don’t want to do but had no choice in this circumstance – 6 words gave actionable and gentle feedback. Great example of quiet leadership
• Private sector inbound – well intentioned and innovative but overwhelming and hard to figure out how to fit in with public sector (e.g., financing to spin up distributed manufacturing)
• Team huddled and created proposal for new name, structure, staffing, charter, rationale, etc.
• Present to senior EOC staff for vetting, feedback
• Feels like I’m adding value finally – plan creation and “bring stakeholders along for the ride” presentation/vetting AND getting the team to stop being hair on fire and focus on thinking and planning and staffing
• Present to Gov – “brilliant” – then after, Kyle says “I’ve worked for multiple governors and senators, and this is the first time I’ve heard something called brilliant” (not sure it was brilliant)
• Now to operationalize it, stand up a team, replace myself so I can get home once this is marching in the right direction at the right speed
• Transferable skills (leadership, comms, strategy, planning) – not just missing context here but missing triple context – healthcare, public sector, CO
• Day 3.  Feels like longer
• Still, feels like adding value now.  Whew.  
• Dinner with a Return Path friend who came down to my hotel’s breakfast room, picked up takeout on the way, and sat 6 feet apart. 

Stay tuned for more tomorrow…

My friend George, one of our co-founders at Return Path (according to him, the best looking of the three), has a wonderful and simple framing question for thinking about product strategy:  what job is your customer hiring you to do?  No matter what I’m working on, I am finding George’s wisdom as relevant as ever, maybe even more so since I am still learning the new context.

Why is this a useful question to ask?  It seems really simple – maybe even too simple to drive strategy, doesn’t it?

It’s very easy in technology and content businesses (maybe other spaces too) to get caught up in a landslide of features and topics. In a dynamic world of competition and feature parity, product roadmaps can easily get cluttered. They can also get cluttered by product teams who have their own view of what should be the next feature, module, or content widget. Sometimes looking at product usage data is helpful, but sometimes it produces more noise than signal because it can easily miss the “why” or change day to day.

And once a product is mature, it can be very difficult to understand which of its many elements — even if they are all used — are the ones truly driving the most value for customers. It’s easy to assume it’s the newest, the slickest, the ones that are generating the most buzz. It’s even easier to assume that when it comes to content. But sometimes it’s now. Sometimes it’s the legacy part of the product. Sometimes it’s a small side feature you don’t focus on. Sometimes it’s something you used to do but don’t really do any more!

By asking customers the simple question — what are you hiring us to do for you? — you can start to get to the heart of the matter, the heart of what your strategy should be.  Peeling the onion once you understand that and getting into the specifics of the different tasks or jobs your customer does that derive from your main point of value, as George would say, “jobs to be done,” is much more straightforward. When defining a Job to Be Done:

• Focus on a functional job (not an emotional one, e.g, “I need to look smart to the boss”)
• Try to ensure that you are looking at the whole job, not just a piece of the job. It’s easy to get too narrow in your definition
• Make sure it is the customer’s definition of the job, not yours

There’s always a role and a need for innovative product owners to help define a space, define value, demonstrate it for customers.  This framework is meant to be additive to a high functioning product owner’s job, it can never replace it.

(As a small post-script, Friday December 6 marks 20 years since we started Return Path…a fitting day to post a bit of a tribute to George!)

Transparency Rules

I think each and every one of our 13 core values at Return Path is important to our culture and to our success.  And I generally don’t rank them.  But if I did, People First is a leading contender to be at the top of the list. The other leading contender would be this last one in the series:

We believe in being transparent and direct

The big Inc. Magazine story about us last year talked a lot about our commitment to transparency and some of the challenges that come with being transparent and direct with people. I’d like to highlight here some of the benefits of being transparent, and the benefits of being direct (sometimes those two things are the same, sometimes they are different).

Transparency’s benefits are so numerous that it’s hard to pick just one or two themes to write about, but my favorite benefit is empowerment.  Especially in a world where information is increasingly available and free, hoarding it comes at a high cost.

• If everyone in the company knows that you’re short of plan and disappointed about that, the majority of people will exercise hawkish judgment about expenses.  The opposite is true as well.  If people know you’re running ahead of plan, they will be more willing to take risks and make investments. Without transparency of financials, people are just more in the dark and looking for all answers and judgment to come from above
• If everyone on your staff understands the process you went through to make a tough call about an element of your strategy, they are not only more likely to understand and support the decision, but they learn from you how to make decisions in the first place
• If your Board knows you’re having a tough quarter from the get go, they’re not surprised at the quarterly meeting and don’t force you to spend painful and precious minutes in the meeting On the firing line reporting on the details. Instead, they can spend time leading up to the meeting thinking about the details of the problems and how they can help or what insights they can bring to bear

Transparency does have some limits, even today.  There are three main limits we run into. One is compensation — still too touchy and wrapped up in people’s self esteem to post on the wall (though I have heard about a couple companies that do that, believe it or not). Another is terminations. Although you might want to tell the company that you fired Sally because she wasn’t carrying her weight, the long term value you derive from dignity and kindness trump any short term value you might derive from such a statement (plus, people know when Sally isn’t carrying her weight, anyway). The third limit to transparency is around half-baked ideas. Although you might sometimes want to try ideas on for size publicly, you have to be careful not to send people scurrying off in the wrong direction just because you blurted something out in a meeting.

The second half of this value statement is about being direct.  Being direct mostly has benefits in terms of efficiency. You can be direct and still be polite and kind.  But being direct means not beating around the bush, being political, or being conflict avoidant.  It means nipping problems in the bud and saving yourself time or money in the long run.

• If you are direct with an employee who is not performing well with data to back it up, the employee has a much better shot at improving than if you delegate the feedback to HR, wait for the next annual performance review, or go passive and skip the feedback entirely
• If you are direct with a boss who you think is treating you unfairly, your odds of fixing the situation go way up
• If there’s bad news to deliver, be direct about it — look the other person in the eye, deliver the news crisply and succinctly, and as quickly as you can after finding it out or deciding on it yourself

Avoid euphemisms at all cost. Telling someone you “might have to rethink things” is not the same as saying “I will have to fire you if xyz don’t happen in the next 30 days.” Saying “xyz would be good for you to do” is not the same as saying “the way for you to get promoted is to consistently do xyz.”

Being transparent and direct are increasingly table stakes for successful companies full of knowledge workers who want to be empowered and clear on where they stand.

I’ve really enjoyed writing all of these values out in living color. I will do a wrap up post shortly.

Protecting the Inbox

We only have one out of our 13 core values at Return Path that’s closely related to the content of our business. But as with the other values, it says a lot about who we are and how we approach the work that we do. That value is:

We believe inboxes should only contain messages that are relevant, trusted, and safe

We occupy a pretty unique space in the email universe – we serve senders and receiving networks, but aren’t directly in the mail stream and therefore don’t directly touch end users.  So much of our business, from our Certification or whitelisting business, to our new Domain Assurance anti-spoofing/anti-phishing business, revolves around building trust in our company that this core value is critical to our survival. If we ran afoul of this core value — and it comes up all the time — we’d be dead in the water.

Here’s how it comes up:  because our Certification program is the closest thing on the Internet to guaranteed universal email delivery, every spammer and grey mailer in the world wants to be on it. We don’t just SELL access to our whitelist. Even once a prospect has been converted to an under-contract client, they have to APPLY for Certification.

It’s not easy to GET Certified. You have to be a really, really good mailer. Not just a real entity. Not just a big spender. You have to send mail that is safe and secure and wanted by end users. We have a variety of qualitative and quantitative methods we can use to determine this, and the requirements for Certified status and therefore Inbox placement are carefully negotiated and regularly reviewed with our ISP partners. Once a client is Certified, it’s not easy to STAY Certified because we are monitoring all of those same standards in real time, 24×7. Clients who go out of bounds get immediately suspended from the program until they are back in bounds. Clients who go out of bounds enough, we just terminate from the program for good.

By the way, just because we won’t certify a particular client isn’t an indictment that they are a spammer. It just means that their email programs still need to be subject to all the state of the art filtering and security measures that our ISPs have in their arsenal.  And most of the time, it doesn’t mean that we won’t work with them to improve the quality of their mail programs so their messages are relevant, trusted, and safe.

But at the end of the day, we’d rather not take money from questionable clients than compromise the quality of our Certification program. That’s a hard decision to make sometimes.  I’ve had to call large clients who are poor mailers and fire them more than once, and I’ve had to take angry phone calls and threatened legal action from clients or prospects many times over the years.  But for us, respect for end users and inbox security are deeply baked into the culture.  It’s why we developed the Domain Assurance product and launched it earlier this year.  And that’s why it’s one of our core values.

More Than 1/3 of Your Life

When I was a kid, so my parents tell me, I used to watch a lot of TV. For some reason, all those episodes of Gilligan’s Island and Dallas still have a place in my brain, right next to lyrics from 70s and 80s songs and movies. I also tend to remember TV commercials, which are even more useless (not that JR Ewing or Ferris Beuller had all that many valuable life lessons to impart).  Anyway, I remember some commercial for some local mattress company which started out with the booming voiceover, “You spend 1/3 of your life in bed — why not enjoy that time and be as comfortable as you can be?”

Well, we humans frequently spend MORE than 1/3 of our lives at work. Why shouldn’t we have that same philosophy about that time as the mattress salesman from 1970s professed for sleep?  Another one in my series of posts about Return Path’s 13 core values is this one:

We realize that people work to live, not live to work

There are probably a few other of our core values that I could write about with this same setup, but this one is probably the mother of them all.  I even wrote about it several years ago here.  Work is for most people the thing that finances the rest of their life — their hopes and dreams, their families’ well-being, their daily lives, and ultimately, their retirement. I think many people wouldn’t work, at least in most for-profit jobs as we know them, if they didn’t have to. And that’s where this value comes from.

How does this value play out?

First, we are respectful of people’s time in the daily thick of things.  We know that society has changed and that work and personal time bleed into each other much more regularly now than they used to.  As I’ve written about before in this series of posts, we have an “open” vacation policy that allows employees to take as much time off a they can, as long as they get their jobs done well. One of the real benefits of this, besides allowing for more or longer vacations, is that employees can take slices of time off, or can work from home, as life demands things of them like dentist appointments and parent-teacher conferences, without having to count the hours or minutes.

Second, an important part of our management training is to make sure that managers get to know their people as people.  This doesn’t mean being buddies or pals, though that happens from time to time and is fine. Understanding everything that makes a person tick, from their hobbies, to their kids, to their pets or pet causes, really helps a manager more effectively manage an employee as well as develop them. And as Steven Covey says, it’s important to “sharpen the saw,” which a good manager can help an employee do ONLY if they are in tune to some extent at a personal or non-work level.

Finally, our sabbatical policy — beyond our fairly generous and flexible vacation policy — ensures that every handful of years, employees really can go off and enjoy life. We’ve had employees buy around-the-world plane tickets and show up at JFK with a backpack. We’ve had people take their families off for a month in an exotic tropical destination. We even had one employee spend a sabbatical in a coffee shop learning how to write code (names masked to protect the innocent).

The challenge with this value is that not everyone treats the flexibility and freedom with the same level of respect, and occasionally we do have to remind someone that flexibility and freedom don’t mean that work can be left undone or delayed.  We believe that by providing the flexibility, people will work even harder, and certainly more efficiently, to still go above and beyond in terms of high performance execution.

In my CEO fantasty world, I’d like to think that given the choice, most of our employees would still come to work at Return Path if they didn’t have to for financial reasons, but I’m not that naive. Hopefully by setting the tone that we understand people work to live and not vice versa, we are allowing people to enjoy life as much as possible, even in the 1/3+ of it that’s spent working.

I help mentor CEOs on executive hiring all the time. One common refrain I hear when we’re talking about requirements for the job is about something I like to call The Mythical Playbook. If I only had the exec with the right playbook, thinks the hiring CEO, all my problems in that executive’s area would be magically solved.

I once hired a senior executive with that same mentality. They had the pedigree. They had taken a similar SaaS company in an adjacent space from $50mm to $250mm in revenue in a sub-group within their functional area. They had killer references who said they were ready to graduate to the C-level job. They had The Playbook! 

Suffice to say, things did not go as planned. I ignored an early sign of trouble, at my own peril. The exec came to me with a new org chart for the department, one with 45 people on it instead of the 20-25 who were currently there. I believed the department was understaffed but was surprised to see the magnitude of the ask. When I pushed back in general, the response I got was “I plan to overspend and overdeliver.” Hmm, ok. I don’t mind that, although a more detailed plan might be useful.  

Then I pushed back on a specific hire, pointing to a box in the org chart with a title that didn’t make sense to me. The response I got was “Yeah, I’m not entirely sure what that person does either, but I know I need that, trust me.” Yikes. 

There are two reasons why The Playbook is mythical. 

The first reason there’s no such thing as a Playbook for executives is that every situation is different. No two companies are identical in terms of offering or culture or structure. Even within the same industry, no two competitive landscapes are the same at different points in time. If life as a senior executive were as simple as following a Playbook, people would make a zillion dollars off publishing Playbooks, and senior executive jobs would be easier to do, and no one would get fired from them.

Now, I’m not saying there isn’t value in analogous experience. There is! But when hiring an executive, you’re not solely looking for someone who claims to know all the answers based on previous experience. That is a recipe for blindly following a pattern that might or might not exist. The value in the analogous experience is in knowing what things worked, sure, but more importantly in knowing when they worked, why they worked, under what conditions they worked, what alternatives were considered, and what things fell apart on the road to success. A Playbook is only useful if it can be applied thoughtfully and flexibly to new situations.

The second reason there’s no such thing as a Playbook when it comes to hiring executives is that the person who might have written the Playbook is actually not available for your job. Most CEOs start a search by saying, “I want to hire the person who took XYZ Famous Company from where I am today to 10x where I am today.” The problem with that is simple. That person is no longer available to you. They have made a ton of money, and they have moved beyond your job in their career progression. What you want is the person who worked for that person, or even one more layer down…or the person who that person WAS before they took the job at XYZ Famous Company. Those people are much harder to find. And when you find them, they don’t have the Playbook. They may have seen a couple chapters of it, but that’s about all.

In the end, the department I referenced above was more successful, but not because of adherence to the new exec’s entire Playbook. The Playbook got the department out over its skis – we overspent, but we did not overdeliver. The new exec ended up leaving the company before they could implement a lot, and that person’s successor ended up refocusing and rightsizing the department. That said, the best thing the department got out of the exec with the Playbook was their successor, which was huge — one element of a strong exec’s Playbook is how to build a machine as opposed to just playing whack-a-mole and solving problems haphazardly.

(Note – I am using the singular they in this and in other posts now, as Brad. Mahendra, and I chose to do in Startup Boards. I don’t love it, but it seems to be becoming the standard for gender neutral writing, plus it helps mask identities as well when I write posts like this.)

I wrote a little bit about the experience of being a multi-time founder in this post where I talked about the value of things like a hand-picked team, hand-picked cap table, experience that drives efficient execution, and starting with a clean slate. The second lap around the track (and third, and fourth) is really different from the first lap.

Based on what we do at Bolster, and my role currently, I spend a lot of time meeting with CEOs of all sizes and stages and sectors of company, as they’re all clients or prospects or people I’m coaching. Lately, I’ve noticed a distinct set of work and behaviors and desires among CEOs who are multi-time founders and operators that is different from those same things in first-time founders. Not every single multi-time founder has every single one of these traits, but they all have a majority of them and form a pretty common pattern. I’ve noticed this with non-profit founders as well as for-profit ones.

• They have an Easier Time Recruiting team members and investors. That may sound obvious, but there are significant benefits to it. They also tend to have Much Cleaner Cap Tables, because they lived the horrors of a messy cap table when they exited their last company without thinking about that topic ahead of time!
  
• They have a Big Vision. Once you’ve had an exit, whether successful or not or somewhere in between, you don’t want to focus on something niche. You want to go all-in on a big problem.
  
• They are interested in creating Portfolio Effect. A number of repeat founders want to start multiple business at the same time, are actually doing it, or are creating some kind of studio model that creates multiple businesses. Once you have a big team, a track record with investors, and a field of deep expertise, it’s interesting to think about creating multiple related paths (and hedges) to success.
  
• They are driving to be Efficient in Execution and Find Leverage wherever they can. One multi-time founder I talked to a few weeks ago was bragging to me about how few people he has in his finance team. At Bolster, our objective is to build a big business on a small team, looking for opportunities to use our own network of fractional and project-based team members wherever possible.
  
• They are Impatient for Progress. While being mindful that good software takes time to build no matter how many engineers you hire, repeat founders tend to have fleshed out their vision a couple layers deep and are always eager to be 6 months ahead of where they are in terms of execution, which leads me to the next point, that…
  
• They are equally Impatient for Success (or Failure). More than just wanting to be 6 months ahead of where they are in seeing their vision come to life, they want to get to “an answer” as soon as possible. No one likes wasting time, but when you’re on your second or third company, you value your time differently. As a friend of mine says in a sales context, “The best answer you can get from a prospect is ‘yes’ – the second best answer you can get is a fast ‘no’.” The same logic applies to success in your nth startup. Succeed or Fail – you want to find out fast.
  
• They are Calm and Comfortable in Their Own Skin. At this stage in the game, repeat founders are more relaxed. They know their strengths and weaknesses and have no problem bringing in people to shore those things up. They know that if things don’t work out with this one, there’s more to life.
  
• They are stronger at Self Management. They are more efficient. They exercise more. They sleep more. They spend more time with family and friends. They work fewer hours.

Anyone else ever notice these traits, or others, in repeat founders?