Please, Keep Not Calling (Thank You!)

It’s been three years since the federal government passed one of its better pieces of legislation in recent memory, creating the Do Not Call Registry which is a free way of dramatically reducing junk phone solicitations.  At the time, registrations were set to expire every three years.  When I signed up my phone number, I stuck a note in my calendar for today (three years later) to renew my registration.  I was planning on blogging about it to remind the rest of the world, too.

To my great surprise, when I went to the site today, I saw this note:

Your registration will not expire. Telephone numbers placed on the National Do Not Call Registry will remain on it permanently due to the Do-Not-Call Improvement Act of 2007, which became law in February 2008.

That’s two great pieces of legislation.  What will they think of next?

How Much Marketing Is Too Much Marketing?

It seems like a busy holiday season is already underway for marketers, and hopefully for the economy, shoppers as well.  Just for kicks, I thought I’d take a rough count of how many marketing messages I was exposed to in a given day.  Here’s what the day looked like:

5:30 a.m. – alarm clock goes off with 1010 WINS news radio in the middle of an ad cycle – 2 ads total.  Nice start to the day.

5:45-6:30 – in the gym, watching Today In New York News on NBC for 30 minutes, approximately 6 ad pods, 6 ads per pod – 36 ads total.  So we’re at 38, and it’s still dark out.

7:00 – walk to subway and take train to work, then walk to office from subway.  Probably see 6 outdoor ads of various kinds on either walk, then about 8 more on the subway within clear eyeshot – 20 ads total.

7:30 – quick scan of My Yahoo – 2 ads total.

7:32 – read Wall St. Journal online, 15 page views, 3 ads per page – 45 ads total.

7:40 – Catch up on RSS feeds and blogs, probably about 100 pages total, only 50% have ads – 50 ads total (plus another 25 during the rest of the day).

7:50 – Sift through email – even forgetting the spam and other crap I delete – 10 ads total (plus another 10 during the rest of the day).

8:00-noon – basically an ad free work zone, but some incidental online page views are generated in the course of work – 25 ads total, plus a ton of Google paid search ads along the way.

Noon-1 p.m. – walk out to get lunch and come back to office, so some outdoor ads along the path – 12 ads total.

1-7 p.m. – same work zone as before – 25 ads total, plus lots of Google.

7 p.m. – walk to Madison Square Garden to see the Knicks get clobbered by Milwaukee, see lots of outdoor ads along the way – 20 ads total.

7:30-9:30 – at the Garden for the Knicks game, bombarded by ads on the scoreboards, courtside, sponsorship announcements, etc.  Approximately 100 ads total (and that’s probably being exceptionally generous).

9:30 – subway ride and walk home – 14 ads total.

10:00 – blitz through episodes of The Daily Show and West Wing in TiVo.  8 minutes of :30 advertising per half hour, or 48 ads total, fortunately can skip most of them with TiVo.

11:00 – flip through issue of The New Yorker before bed – 50 ads total.

Total: 492 ads.

I’m sure I missed some along the way, and to be fair, I am counting the ads I skipped with TiVo — but hey, I’m also not counting all the ads I saw on Google, so those two should wash each other out.  On the other hand, if I drove to and from work in California, I’d have seen an extra 100 billboards, and if I read the New York Times print edition, I’d have seen an extra 100 print ads.

Approximate cost paid to reach me as a consumer today (assuming an average CPM of $10): just under $5.  Sanity check on that — $5/day*200 million Americans who are “ad seers”*365 days is a $365 billion advertising industry, which is probably in the right ballpark.

What are the two ads I consciously acted on?  An offer from LL Bean through email (I’m on their list) for a new fleece I’ve been meaning to get, and a click on one of the Google paid search results.  No doubt, I subconsciously logged some good feelings or future purchase intentions for any number of the other ads.  Or at least so hope all of the advertisers who tried to reach me.

What’s the message here?  A very Seth Godin-like one.  Nearly all of the marketing thrown at me during the day (Seth would call it interrupt marketing) — on the subway, at the Garden, on the sidebar of web pages — is just noise to me.  The ones I paid attention to were the ones I WANTED to see:  the email newsletter I signed up for from a merchant I know and love; and a relevant ad that came up when I did a search on Google.

Brand advertising certainly has a role in life, but permission and relevance rule the day for marketers.  Always.

Exciting News for Return Path

If you’ll indulge me in a quick moment of company self-promotion, we are so excited at Return Path to announce that we have been included in Fortune Magazine’s annual list of the Best Places to Work — we are ranked #11 in the Medium Size Company category!  Our official blog post/press release are here.

This is really exciting and a testament to all 360+ of our talented team members at the company.  When we talk about one of our core values as being Job 1 — a shared responsibility for championing and extending our unique culture as a competitive advantage — this is one of those examples of where the theory becomes reality!

Of the many things I may have had in mind for the Return Path of the future on December 6, 1999, winning what is probably the most prestigious “employer of choice” award in the world certainly wasn’t one of them, but it was wonderful to receive the acknowledgment.  Congratulations to the whole team here on this great achievement!

We were excited to close the sale of our Consumer Insights business last week to Edison, as I blogged about last week on the Return Path blog.  But it brought back to mind the great Yogi Berra quote that “it ain’t over ’til it’s over.”

We’ve done lots of deals over our 18 year existence.  Something like 12 or 13 acquisitions and 5 spin-offs or divestitures.  And a very large number of equity and debt financings.

We’ve also had four deals that didn’t get done.  One was an acquisition we were going to make that we pulled away from during due diligence because we found some things in due diligence that proved our acquisition thesis incorrect.  We pulled the plug on that one relatively early.  I’m sure it was painful for the target company, but the timing was mid-process, and that is what due diligence is for.  One was a financing that we had pretty much ready to go right around the time the markets melted down in late 2008.

But the other two were deals that fell apart when they were literally at the goal line – all legal work done, Boards either approved or lined up to approve, press releases written.  One was an acquisition we were planning to make, and the other was a divestiture.  Both were horrible experiences.  No one likes being left at the altar.  The feeling in the moment is terrible, but the clean-up afterwards is tough, too.  As one of my board members said at the time of one of these two incidents – “what do you do with all the guests and the food?”

What I learned from these two experiences, and they were very different from each other and also a while back now, is a few things:

• If you’re pulling out of a deal, give the bad news as early as possible, but absolutely give the news.  We actually had one of the “fall apart at the goal line” deals where the other party literally didn’t show up for the closing and never returned a phone call after that.  Amateur hour at its worst
• When you’re giving the bad news, do it as directly as possible – and offer as much constructive feedback as possible.  Life is long, and there’s no reason to completely burn a relationship if you don’t have to
• Use the due diligence and documentation period to regularly pull up and ask if things are still on track.  It’s easy in the heat and rapid pace of a deal to lose sight of the original thesis, economic justification, or some internal commitments.  The time to remember those is not at the finish line
• Sellers should consider asking for a breakup fee in some situations.  This is tough and of course cuts both ways – I wouldn’t want to agree to one as a buyer.  But if you get into a process that’s likely to cause damage to your company if it doesn’t go through by virtue of the process itself, it’s a reasonable ask

But mostly, my general rule now is to be skeptical right up until the very last minute.

Because deals are not done until they are done.

The Gift of Feedback, Part IV

I wrote a few weeks ago about my live 360 – the first time I’ve ever been in the room for my own review discussion.  I now have a development plan drafted coming out of the session, and having cycled it through the contributors to the review, I’m ready to go with it.  As I did in 2008, 2009, and 2011, I’m posting it here publicly.  This time around, there are three development items:

1. Continue to spend enough time in-market.  In particular, look for opportunities to spend more time with direct clients.  There was a lot of discussion about this at my review.  One director suggested I should spend at least 20% of my time in-market, thinking I was spending less than that.  We track my time to the minute each quarter, and I spend roughly 1/3 of my time in-market.  The problem is the definition of in-market.  We have a lot of large partners (ESPs, ISPs, etc.) with whom I spend a lot of time at senior levels.  Where I spend very little time is with direct clients, either as prospects or as existing clients.  Even though, given our ASP, there isn’t as much leverage in any individual client relationship, I will work harder to engage with both our sales team and a couple of larger accounts to more deeply understand our individual client experience.
2. Strengthen the Executive Committee as a team as well as using the EC as the primary platform for driving accountability throughout the organization.  On the surface, this sounds like “duh,” isn’t that the CEO’s job in the first place?  But there are some important tactical items underneath this, especially given that we’ve changed over half of our executive team in the last 12 months.  I need to keep my foot on the accelerator in a few specific ways:  using our new goals and metrics process and our system of record (7Geese) rigorously with each team member every week or two; being more authoritative about the goals that end up in the system in the first place to make sure my top priorities for the organization are being met; finishing our new team development plan, which will have an emphasis on organizational accountability; and finding the next opportiunity for our EC to go through a management training program as a team.
3. Help stakeholders connect with the inherent complexity of the business.  This is an interesting one.  It started out as “make the business less complex,” until I realized that much of the competitive advantage and inherent value from our business comes fom the fact that we’ve built a series of overlapping, complex, data machines that drive unique insights for clients.  So reducing complexity may not make sense.  But helping everyone in and around the business connect with, and understand the complexity, is key.  To execute this item, there are specifics for each major stakeholder.  For the Board, I am going to experiment with a radically simpler format of our Board Book.  For Investors, Customers, and Partners, we are hard at work revising our corporate positioning and messaging.  Internally, there are few things to work on — speaking at more team/department meetings, looking for other opportunities to streamline the organization, and contemplating a single theme or priority for 2015 instead of our usual 3-5 major priorities.

Again, I want to thank everyone who participated in my 360 this year – my board, my team, a few “lucky” skip-levels, and my coach Marc Maltz.  The feedback was rich, the experience of observing the conversation was very powerful, and I hope you like where the development plan came out!

The Gift of Feedback, Part III

I’ve written about our 360 Review process at Return Path a few times in the past:

• overall process
• process for my review in particular
• update on a process change and unintended consequences of that process change)
• learnings from this year’s process about my staff

And the last two times around, I’ve also posted the output of my own review publicly here in the form of my development plan:

• Here in 2008
• Here in 2009

So here we are again.  I have my new development plan all spruced up and ready to go.  Many thanks to my team and Board for this valuable input, and to Angela Baldonero (my fantastic SVP People and in-house coach), and Marc Maltz of Triad Consulting for helping me interpret the data and draft this plan.  Here at a high level is what I’m going to be working on for the next 1-2 years:

• Institutionalize impatience and lessen the dependency dynamic on me.  What does this mean?  Basically it means that I want to make others in the organization and on my team in particular as impatient as I am for progress, success, reinvention, streamlining and overcoming/minimizing operational realities.  I’ll talk more about something I’ve taken to calling “productive disruption” in a future blog post
• Focus on making every staff interaction at all levels a coaching session.  Despite some efforts over the years, I still feel like I talk too much when I interact with people in the organization on a 1:1 or small group basis.  I should be asking many more questions and teaching people to fish, not fishing for them
• Continue to foster deep and sustained engagement at all levels.  We’ve done a lot of this, really well, over the years.  But at nearly 250 people now and growing rapidly, it’s getting harder and harder.  I want to focus some real time and energy in the months to come on making sure we keep this critical element of our culture vibrant at our new size and stage
• I have some other more tactical goals as well like improving at public speaking and getting more involved with leadership recruiting and management training, but the above items are more or less the nub of it

One thing I know I’ll have to do with some of these items and some of the tactical ones in particular is engage in some form of deliberate practice, as defined by Geoffrey Colvin in his book Talent is Overrated (blog post on the book here).  That will be interesting to figure out.

But that’s the story.  Everyone at Return Path and on my Board – please help me meet these important goals for my development over the next couple of years!

Why I Love Our New Product

Return Path officially announced a new product today called Domain Assurance, which I blogged a little bit about here.  It’s a very exciting product that will help reduce and ultimately eliminate phishing emails – spam’s even more evil cousin that leads to identity theft, malware, further propagation of spam through botnets, and all sorts of other goodies.  The product is in beta now with a bunch of top ISPs and brands.

Those are a lot of reasons to love our new product.  But for me, there’s more.

For starters, this is the first new product (entirely new product, not just a feature or extension) that we’ve launched in years.  While we’ve made some acquisitions and done a ton of product development, they’ve always been right in our strike zone of deliverability.  This is a nice, deeply interrelated adjacency.  It’s fun to branch out a little bit and do something new.

Second, this product is a great example of operating leverage.  Many of the necessary ingredients for it were already in house – most notably customers and partners, but also a lot of data.  That’s what adjacencies should be about.  Building it, while a significant effort (and one that’s not completely done yet) was significantly easier than building, say, the original deliverability tool set or reputation database.  Let’s hear it for scale!

Finally, the product showcases Return Path’s commitment to open standards, which is fundamental to the Internet’s success.  We hope our new Domain Assurance product encourages more and more mailers to authenticate all of their outbound mail, and we hope the product also encourages the use of ADSP and ultimately some productive enhancements to both ADSP and DKIM.  Authentication does not equal reputation, but we’ve said for years it’s the fundamental underpinning of it.

Someone asked me the other day how things are going at Bolster, the new company I started along with a bunch of long-time colleagues from Return Path last year. My visceral answer was “I’m having a blast!”  I thought about it more after and came up with five reasons why. 

First, I am working with a hand-picked group of people. My co-founders, I’ve worked with for an average of 15 years – we know and trust each other tremendously. And for the most part, the same is true about our cap table. Almost everyone else at the company is also someone multiple of us have known or worked with for years. That may not last forever, but it makes things so much easier and almost friction-free out of the gate here. 

Second, this is the “second lap around the track” for a few of us on the founding team in terms of starting something from scratch, and even those at the company who haven’t done a raw startup before are super experienced professionals and many have worked in and around early stage businesses a lot. All this combines to cut down our error rate, reduce anxiety, and speed up the pace of work. More friction-free or at least low-friction work.

Third, after a 20-year run at Return Path, it’s great to start with a clean slate. No mountains of tech debt and legacy code bases. No installed base of customers with contracts or pricing we no longer like or offer. No institutional debt like a messy cap table, legacy people issues, leases for offices we don’t want or need any more.  This also points to low friction as part of what’s going on…and while that’s a theme, the next two areas are different. 

The fourth reason I’m having a blast at Bolster is that I love — and really live in — the problem space we are working in.  When we started Return Path, I was deeply familiar with email marketing and the challenges faced by our client set and had a good vision for the early product.  But as the years went on, the product got geekier and nicher — and even when it wasn’t, I was never a USER of the product since I’m not an email marketer.  In fact, at our peak of 500 people, the company employed one email marketer and therefore had one user of our own product.  At Bolster, we have three user personas — Member, Client, and Partner.  And I’m all three of them.  I’m constantly in the product, multiple times a day.  I’m deeply familiar with all angles of the executive search and board building process.  It’s MUCH better to be this close to the product, and the same is true for many of our team members.

Finally, the thing I was really worried about with starting another company from scratch — moving from a leadership role into an individual contributor role — has been nothing short of fantastic.  I love working with clients.  I love talking to members.  I love advising and coaching CEOs. I love being a pretend product manager.  I love writing marketing copy.  It’s just great to be on the front lines. (I still love working on strategy and leading the board and engaging with people internally — but those are things that never stopped being part of my day to day.)

I was trying to think if there’s some priority to this list. Almost all of these items are or can be made to be true in your second+ startup. But while four of the five can theoretically be true in your first startup as well, I don’t think it’s quite the same. So I’d have to weight “second lap around the track” a bit higher and also note that during your second lap around the track, hand-picking your team and cap table, appreciating a clean slate, and appreciating individual contributor work are that much easier and things you can appreciate a lot more as a repeat entrepreneur.

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.

Why We Love Email Authentication, But Why It Won’t Stop Spam

Microsoft made a big announcement today that they’re taking email authentication, in the form of Sender ID, very seriously.  They’re using a stick, not a carrot.  Emailers who do not publish a proper Sender ID record are now going to (a) find themselves in the bulk mail folder at Hotmail and MSN, and (b) have a big fat disclaimer thrown on top of their emails from Microsoft warning users that the email’s source can’t be authenticated.

At Return Path, we’re big fans of authentication, and we’re sponsoring the upcoming Email Authentication Summit in a couple of weeks in New York as one way of supporting the effort — encouraging our clients to get on the ball with authentication is another one.  Here’s what we think it will (and won’t) do:

– It WILL make a big dent in spoofing, phishing, and fraud, right away.  Why?  Because those particular elements of the Internet Axis of Evil are identity-based…therefore, identity authentication will either stop those things, make it easier for consumers to steer clear of them, or make it easier for law enforcement to go after them.

– It WILL NOT make a big dent in spam right away.  Why?  Because spam is much more nuanced than fraud.  If I’m Microsoft, and I know that you are the particular sender of an email into my network, that’s all good and well, but I might not have any idea if I want to accept that mail or not.  Another way of saying this is that spammers can publish Sender ID records, too.

– It WILL lay the foundation for longer-term spam solutions.  Why?  Because it’s important to understand exactly who is sending mail into a network in order to answer that next question of “do I want to accept your mail or not?”  We think the answers to that question lie with accreditation and reputation services.

Obviously, I have my biases.  Return Path owns Bonded Sender, the leading accreditation service, which answers that question by saying “yes – you want to accept this mail, because Return Path and TRUSTe have examined me thoroughly and are vouching for my integrity, they’re measuring how many people are complaining about my mail, and if I get too many complaints, they fine me and kick me out of the program.”

Look for another announcement from us soon about what we’re up to in the reputation space, which is a more complex cousin to accreditation in answering that same question.

Why I Love My Board

Fred may be the only one of my directors who has done something this dorky, this publicly, but quite frankly, I could see any of us in the same position.  Guys, next meeting, we’re having nerd olympics.