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:  Why Not Both?

Craig Hickman’s Mind of a Manager, Soul of a Leader talks about how tapping the natural tension between managers and leaders allows an organization to achieve its best.  It covers dozens of topical areas and for each compares how a prototypical manager handles the area (practical, reasonable, decisive) vs. how a prototypical leader handles it (visionary, empathetic, and flexible).  Of course, the book describes the ideal organization as “balanced an integrated” between the two extremes.

My take for startups, a topic not addressed in the book, is that the job of the entrepreneur CEO is to be both manager and leader, and try to do both roles effectively without driving the team nuts.  The book says that “managers wield authority, leaders apply influence.”  Entrepreneurs have to be comfortable with both styles.  Thanks to my colleague Stephanie Miller for giving me a copy of this one.

Book Short:  A Must Read

Every once in a while, I read a book and think, “This is an important book.”  Microtrends, by Mark Penn, was just that kind of read.  Penn is the CEO of one of our largest clients in the market research business as well as CEO of Burson Marstellar and, more notably, the Clintons’ pollster and strategy director for much of the last 16 years.  He’s a smart guy, and more important than that, he’s awash in primary research data.

The premise of Microtrends is that America is no longer a melting pot, where lots of different people come together to try to be the same, but rather that it’s a big tent, where lots of small groups are now large enough to express their individuality powerfully.  The book is also perfect for the ADD-afflicted among us, with 75 chapters each of about 4 pages in length describing one new “microtrend” or small faction of American identity.  Penn not only describes the trend in a data-rich way but then goes on to postulate about the impact that trend will have on society at large and/or on the business opportunities that could come from serving those in the trend.

Just to give you a sample of the trends he covers:  Sex-ratio singles (explaining why there really are more single women than men), Extreme commuters (we certainly have a couple of those at Return Path),
Pro-Semites vs. Christian Zionists (they sound the same but are completely different), Newly-released Ex-cons (hint – there are a ton of them), and the rise of Chinese artists.

Whether you’re interested in marketing, entrepreneurship (you’ll get loads of ideas here), investing (more loads of ideas), or just trends in American and global society, Microtrends is a must must must read.  All 75 chapters were interesting to me, but even if you don’t love some…they’re only 4 pages each!

Book Short:  Go Where They Ain’t

Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant, by W. Chan Kim and Renée Mauborgne isn’t bad, but it could literally be summed up by the title of this post.  I think it’s probably a better book for people who aren’t already entrepreneurs.

That said, there are two chapters that I found pretty valuable.  One is called “Reconstruct Market Boundaries,” which is a great way of thinking about either starting a new business or innovating an existing one.  It’s a strategy that we’ve employed a few times over the years at both Return Path and Authentic Response.  It’s hard to do, but it expands the available territory you have to cover.  The classic Jack Welch/GE “we don’t just sell jet engines, we sell AND SERVICE jet engines” which expanded their addressable market 9x.

The other useful chapter was “Get the Strategic Sequence Right.”  The sequence of questions to answer, according to the authors, is:

• Will buyers get enough utility out of it?
• What’s the right price?
• Can you cost it low enough to make good margin?
• Are you dealing with adoption hurdles?

The reason I found this sequence so interesting is that I think many entrepreneurs mix the order up once they get past the first one.  It’s easy to start with market need and then quickly jump to adoption hurdles, cost things out, and go with a cost-plus pricing strategy.  The book documents nicely why this order is more productive.  In particular, pricing first, then costing second, is both more market-focused (what will people pay?) and more innovative (how can I think creatively to work within the constraint of that price point?).

The common theme that’s most interesting out of the book is that new frameworks for thought produce killer innovation.  That’s clearly something most entrepreneurs and innovators can hang their hat on.

Book Short:  A SPIN Selling Companion

At Return Path, we’re big believers in the SPIN Selling methodology popularized by Neil Rackham. It just makes sense. Spend more time listening than talking on a sales call, uncover your prospect’s true needs and get him or her to articulate the need for YOUR product. Though it doesn’t reference SPIN Selling, Why People Don’t Buy Things, by Kim Wallace and Harry Washburn is a nice companion read.

Rooted in psychology and cognitive science, Why People Don’t Buy Things presents a very practical sales methodology called Buying Path Selling. Understand how your prospect is making his or her buying decision and what kind of buyer he or she is, be more successful at uncovering needs and winning the business.

The book has two equally interesting themes, rich with examples, but the one I found to be easiest to remember was to vary your language (both body and verbal) with the buyer type. And the book illustrates three archetypes: The Commander, The Thinker, and The Visualizer. There are some incredibly insightful and powerful ways to recognize the buyer type you’re dealing with in the book.

But most of the cues the authors rely on are physical, and lots of sales are done via telephone. So I emailed the author to ask for his perspective on this wrinkle.  Kim wrote back the following (abridged):

Over the phone it is fairly easy to determine a prospect’s modality. I’ve developed a fun, conversational question which can be asked up front, “As you recall some of your most meaningful experiences at XYZ, what words, thoughts, feelings or visuals come to mind? Anything else?”

If you’re interested in letting your blog readers test their modalities, the link below will activate a quick 10 question quiz from our website that generates ones modality scores along how they compare with others. (It’s like Myers-Briggs applied to decision making.) http://www.wallacewashburn.com/quiz.shtml

In any case, if you are a sales, marketing, or client services professional (or even if you just play one on TV), Why People Don’t Buy Things is a quick, insightful read.  Thanks for the quick response, Kim!

Book Short: The Most Rapacious Guys in the Room

I just finished The Smartest Guys in the Room, by journalists Bethany McLean and Peter Elkind. This is the story of Enron, and what a tale it is! The book is a good quick business novel read. It reminded me a lot of Barbarians at the Gate, except that it made me far angrier. I’m not sure if that’s because I’m at a different place in my career now than I was 10 years ago and therefore have a different appreciation for what goes on in companies, or if the Enron guys were just far worse than anyone surrounding RJR Nabisco. But in any case, as my Grandpa Bill would have said, this one certainly raised my hackles.

Anyway, I can’t even get into the details without working myself into a frenzy about these crooks, but suffice to say there are lots of “what not to do” lessons in this book, starting with CEO Ken Lay’s wuss-like, disconnected approach to leading the company and ending with CFO Andy Fastow’s insane rationalizations for using the company as his own piggy bank. Anyway, I thought it would just be easier to just list out a few simple things to look for in your own company if you’re concerned you might be having some financial scandals within.  You know you have a problem if…

– Your company has 3,000 off-balance sheet special purpose entities, including 800 in the Caymans

– Your CEO has waived your company code of ethics twice so that the CFO could negotiate deals for his own profit against the company

– Your President combatively calls an analyst an asshole on an earnings call when asked why the company couldn’t produce a balance sheet and cash flow statement with its income statement and earnings release

– Your staffers meet someone from your auditor and say “oh, you’re the guy that won’t let us do something”

– Your accounting department becomes viewed as a major profit center because of its treatment of revenue

It’s truly astonishing what these bozos thought they could get away with. Thank God they’re going to jail. Thanks to my colleague Patty Mah (a friend of the author) for this book.

9/11’s 10th

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

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

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

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

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

The Tension That Will Come With the Future of Work

A lot has been written about the Work From Anywhere life that knowledge workers are leading right now due to the pandemic, and what will come next.  Fred has a great post on it, and I’m curious to see how his and Joanne’s “Home Office Away From Home” space called FrameWork does when it opens.  In that post, he references a few other posts and articles worth reading:

• Imagine Your Flexible Office Work Future – Anne Helen Petersen
• We’re Never Going Back – Packy McCormick
• The Future of Offices When Workers Have Choice – Dror Poleg

Instead of entering the debate about what the future will look like, which no one really knows other than to say “not like the past,” I want to focus on a tension I’ve been mulling over lately, and that is the tension between a company’s leaders and its employees.  You could also call it a tension between extroverts and introverts.  And in this regard, Packy McCormick is both right and wrong about the debate:  right in the sense that employees will make the decision, not companies; wrong in the sense that the best employees “are not going to work for companies that make them shave, get dressed, hop into a car or a crowded subway, and sit at a desk in an office five days a week with their headphones on trying to avoid distractions and get work done.”  That’s a blanket statement that, as with most blanket statements, misses an incredibly important point.

That some people like, want to, need to, or benefit from working in offices more often than not.

That those people are some of the most talented, creative, and high potential people in an organization.

And that those people are frequently the ones with the least “voice” in an organization — new employees, younger workers, introverts, and people from underrepresented groups.

It will be really easy for senior people who, in many cases, have longer commutes and kids they are now accustomed to seeing a lot more, not to mention really nice and private home offices, to default to working from home.  In many cases, they’ve already done more of that than most employees, well, because they can.  But the problem is that those people are perfectly fine working from home.  Work and decisions come to them.  Their career trajectories are pretty set.  They will seek out anyone in the organization to ask them any question, any time.

But think about the topic from the perspective of an entry level account coordinator, an associate product manager, a graphic designer in marketing, a financial analyst in the FP&A group, or an AR specialist in accounting. .  Less exposure to decision makers can’t possibly help this.  If you’re one of those people, here are the things you miss out on when there’s no office:

• You don’t get to participate in or overhear interesting conversations in the break/lunch room or at the water cooler about something going on in the company that you’re not working on.  This reduces your ability to learn in unstructured ways at work or get thoroughly onboarded into a new company
• You don’t get to see who comes and goes from the office or different meeting rooms.  This may sound silly, but watching a business in, seeing who is in a glass-walled conference room or what slides are up on the wall, helps employees stimulate good ideas about their day to day work.  This limits your ability to connect the dots and better understand the big picture at work 
• You don’t get to have a casual conversation with your department head or CEO in the elevator or hallway or a conference room between meetings.  That “skip level” leader is much less likely to know who you are or what you do.  This can make it harder for you, the next time you have an idea you want to share or feedback you want to give, to approach a leader.  It also makes it a little tougher for you the next time you’re in line for some kind of promotion or development opportunity

Of course all employees CAN in theory make themselves known, can learn, can seek out others in the organization, and can try to re-create hallway serendipity from the comfort of their own Zoom screens.  It just doesn’t come naturally to most; practically speaking for many, it’s impossible; and it’s particularly hard for younger or quieter team members.  There’s a ton of research about how women in particular aren’t as comfortable advocating for themselves when it comes time to ask for a raise or a promotion.  If you’re the CEO of a 100 person organization, you might be inclined to chat with the new entry level AR person at the coffee machine for a few minutes; you’re unlikely to be excited about a 30-minute Zoom with her.  

(By the way, this whole construct may be different for engineering, where engineers are likely more comfortable with remote work AND aren’t held back in their career development as a result.)

I’ll close this post with an anecdote.  As part of our work at Bolster, I was doing something called an Executive Team Scalability Assessment with the CEO of a $75mm SaaS company a month or so ago.  When we were doing a review of how strongly each of his leaders role modeled company values, he paused when he got to one leader and said, “I honestly don’t know.  That person has only been here 10 months, but don’t worry, that’s just because of the pandemic.  I haven’t seen them in action.”  10 months!  People will discover at some point that it was much easier to “lift and shift” an existing organization to the cloud in year 1 of the pandemic than it will be to sustain or build a culture with a lot of new employees in year 2 or 3 of remote-first work.

CEOs who care about their culture, their people, inclusion and belonging, and their people’s professional development will have to really re-think how things work if they are going to steer their companies towards remote-only policies, or even remote-first employees, and still be inclusive workplaces.  That doesn’t mean it can’t be done.  But gravitating to a remote-only way of life, even if it’s personally enticing or if some talented and vocal employees demand it, may not be in the best interest of their overall company and employee population.

Understanding the Drivers of Success

Although generally business is great at Return Path  and by almost any standard in the world has been consistently strong over the years, as everyone internally knows, the second part of 2012 and most of 2013 were not our finest years/quarters.  We had a number of challenges scaling our business, many of which have since been addressed and improved significantly.

When I step back and reflect on “what went wrong” in the quarters where we came up short of our own expectations, I can come up with lots of specific answers around finer points of execution, and even a few abstracted ones around our industry, solutions, team, and processes.  But one interesting answer I came up with recently was that the reason we faltered a bit was that we didn’t clearly understand the drivers of success in our business in the 1-2 years prior to things getting tough.  And when I reflect back on our entire 14+ year history, I think that pattern has repeated itself a few times, so I’m going to conclude there’s something to it.

What does that mean?  Well, a rising tide — success in your company — papers over a lot of challenges in the business, things that probably aren’t working well that you ignore because the general trend, numbers, and success are there.  Similarly, a falling tide — when the going gets a little tough for you — quickly reveals the cracks in the foundation.

In our case, I think that while some of our success in 2010 and 2011 was due to our product, service, team, etc. — there were two other key drivers.  One was the massive growth in social media and daily deal sites (huge users of email), which led to more rapid customer acquisition and more rapid customer expansion coupled with less customer churn.  The second was the fact that the email filtering environment was undergoing a change, especially at Gmail and Yahoo, which caused more problems and disruption for our clients’ email programs than usual — the sweet spot of our solution.

While of course you always want to make hay while the sun shines, in both of these cases, a more careful analysis, even WHILE WE WERE MAKING HAY, would have led us to the conclusion that both of those trends were not only potentially short-term, but that the end of the trend could be a double negative — both the end of a specific positive (lots of new customers, lots more market need), and the beginning of a BROADER negative (more customer churn, reduced market need).

What are we going to do about this?  I am going to more consistently apply one of our learning principles, the Post-Mortem  –THE ART OF THE POST-MORTEM, to more general business performance issues instead of specific activities or incidents.  But more important, I am going to make sure we do that when things are going well…not just when the going gets tough.

What are the drivers of success in your business?  What would happen if they shifted tomorrow?

Do Business Books Suck for Entrepreneurs?

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

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

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

Even bad ideas can spur good thinking.

I wrote part I of this post in 2011, and I feel even more strongly about it today. I generally keep this blog away from politics (don’t we have enough of that running around?), but periodically, I find some common sense, centrist piece of information worth sharing. In this case, I just read a great and very short book, Six Amendments: How and Why We Should Change the Constitution, by former Supreme Court Justice John Paul Stevens, that, if you care about the polarization and fractiousness going on in our country now, you’d appreciate.

If nothing else, the shattered norms and customs of the last several years should point people to the fact that our Constitution needs some revision. Not a massive structural overhaul, but some changes on the margin to keep it fresh, as we approach its 250th anniversary in the next couple decades.