Email Articles This Week

I know, not a real inspired headline.  There are two interesting articles floating around about email marketing this week.  I have a few thoughts on both.

First, David Daniels from Jupiter writes in ClickZ about Assigning a Value to Email Addresses.  David’s numbers show that 71% of marketers don’t put a value on their email addresses.  I think that may be an understatement, but it’s a telling figure nonetheless.  David’s article is right on and gives marketers some good direction on how to think about valuing email addresses.  The one thing he doesn’t address explicitly, though, is how to think about the value of an email address in the context of a multi-channel customer relationship.  Customer Lifetime Value is all good and well, but the more sophisticated marketers take the next step and try to understand by customer (or segment) how valuable email is relative to other channels.

Second, David Baker writes in Mediapost’s Email Insider about Finding New Customers Via Email.  The column is a nice discussion of how important email is to retaining customers.  We at Return Path completely agree.  However, the question Baker posed at the beginning is not well addressed — “Should I use email to find new customers?”

My company works with hundreds of smart marketers every week who say, “Yes!  Because it’s effective, cost efficient and is the only way to combine the relevancy of search with the power of online advertising.”

I applaud Baker’s note of caution to marketers planning to acquire customers via email.  It’s always a good idea to plan the campaign with the same diligence you plan any marketing outreach — making sure the targeting, message, design and offer are all optimized for the prospect interest and the medium.

However, I take great issue with his conclusion that email acquisition marketing “does more harm than good.”  Our clients disprove this claim every day.  Email prospecting done well includes a synergy of organic, viral and paid techniques.  Consumers and business professionals still want to receive relevant and informative offers via email.  More than 50,000 of them sign up every DAY for email offers from Return Path alone.

Poeple who have failed list rental tests (and there are lots of them) need to ask some hard questions of their campaign strategy, their creative, their list rental partner, and their agency.  Did you try to send the same message and design to a list of prospects as you do to your house file?  No wonder no one got the message, they don’t even know you.  Was your list double opt-in?   Did you segment the list by interest category or demographics?  Perhaps your message was mis-targeted.  Did your landing page make it easy to take advantage of the offer?  Did you test on a small portion of the list before blasting the entire file?  Did you optimize your subject line to ensure higher open rates?  Did you try to do too much?  The golden rule of email list rental is “one email, one message.”

The success of many marketers using list rental today can not be ignored.  Done well, email acquisition is extremely powerful.  And, the addition of new lead generation, co-registration and offer aggregation opportunities create even more custom and targeted opportunities to connect with prospects.

It’s too easy to dismiss something that didn’t work two years ago by blaming the medium.  Instead, recognize that old experience for what it was.  A well-intentioned effort to test out a new medium, that didn’t work because many tried to apply practices from other media to it.  Times have changed, and email acquisition has proven its value.

Stick with Daniels’ article, figure out how valuable an email address can be for you, then go out and collect as many of them as you can from customers and prospects who will be all-too-willing to give them to you in exchange for content, offers, and other points of value.

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.

Why I Love My Board, Part III

My prophesy is starting to come true.  In Part I of this series four years ago, I asserted that

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.

Now, Brad Feld is no shrinking violet.  As far as I’m concerned, he made his film debut in the memorable “Munch on Your Bones” video (short, worth a watch if you’re a Feld groupie) something like 6 or 7 years ago for an all-hands meeting I ran.  But his newest short feature film, “I’m a VC,” made with his three partners, Jason, Ryan, and Seth, is a must-see for anyone in the entrepreneur-VC set and puts him up there with Fred in the pantheon of “this dorky, this publicly.”

Why I Love My Board, Part II

I’ve written a few things about my Board of Directors over the years, some of which I note below.  Part I of this series isn’t particularly useful, though there’s an entertaining link in it to a video of Fred that’s worth looking at if you know or follow him.

Today, we are happy to announce that we are adding a new independent director, Scott Petry, the founder of Postini and now a senior email product leader at Google (read the official press release [here]).  Scott’s a fantastic addition to our already strong Board, and the process of recruiting and adding him has made me reflect a bit on my Board and its strengths and weaknesses, so I thought I’d share a couple of those thoughts here.

I think Return Path has cultivated a very high functioning Board over the years, and I feel very fortunate to have the group that we have.  Here are the top five things I think make our Board special, in no particular order.

1. We have great individuals on the Board.  Each of our individual Board members — Fred Wilson, Greg Sands, Scott Weiss, Scott Petry, and Brad Feld (now officially an observer), (in addition to me) — could anchor a super strong Board in his own right and have all served on multiple Boards of related companies.  And not only do these guys know their stuff…they do their homework.  They all come to every meeting very well prepared.
2. The individual Board members are different but have different experiences and personalities that complement each other nicely.  Among the three VCs on the Board, two have operating experience, one as a founder and one in product management.  Among the two industry CEOs, one has more of a business development focus, and the other has deep technical expertise.  Some directors are excitable and a bit knee-jerk, others are more reflective; some are aggressive and others are more conservative; some have extremely colorful metaphors, others are a bit more steeped in traditional pattern recognition.
3. We have built a great team dynamic that encourages productive conflict.  I assume a lot of rooms full of great directors of different types are so ego-laden that people just talk over each other.  Our group, for whatever reason, doesn’t function that way.  We are engaged and in each others’ faces during meetings, no one is afraid to voice an opinion, and we listen to each other.  Some of this may be the way we spend time together outside of Board rooms, which I wrote about in The Social Aspects of Running a Board. Some is about just making sure to have fun, which I wrote about in The Good, The Board, and The Ugly (Part I, Part II, Part III), I talk about other aspects of running a good Board, including making sure to have fun – that post includes an entertaining picture of now-Twitter CEO Dick Costolo and a few of his friends from his FeedBurner days.
4. We are deliberate about connecting the Board and the Executive team, and the rest of the company.  We encourage every director to have a direct relationship with every one of my direct reports.  They connect both during and outside of meetings, and they have gotten to know each other well over the years.  This is much more helpful to us than a more traditional “hourglass” structure where all connections go through the CEO.
5. We run great meetings.  We send out a single, well-organized document several days before the meeting.  Board members do their homework.  We focus on current and future issues more than reporting on historical numbers, and we no longer do any presentations — it’s all discussion (I also wrote about a lot of this here in PowerPointLess).

Welcome to the Return Path family, Scott P – we are delighted to have you on board our Board!

New Media Deal, Part II – the We Media Deal

My original New Medial Deal posting from August, 2004, is my favorite posting of all 220 or so that I’ve done to date. It has the most clicks of any posting I’ve done. People mention it to me all the time. I even used it as the foundation for the preface to our book at Return Path, Sign Me Up!

The general thesis (although the original posting is short and worth reading) is simple. Old Media was one-way communication – they produce it, you consume it, and Old Media had a deal with us: they give us free or cheap content, we tolerate their advertising. Think about your favorite radio station or an episode of The Office on TV. The New Media deal is an Internet derivative of that, that is founded on some degree of two-way communication: they give us free services and more targeted advertising in exchange for some of our personal data — just like the Old Media deal, we are willing make a small sacrifice, in this case, some pieces of our anonymity, in a heartbeat if the value exchange is there. This is true of everything from personalized stock quotes on My Yahoo! to the New York Times on the Web. The New Media Deal doesn’t replace the Old Media Deal, it just adapts it to the new environment.

But what about the new generation of services that have popped up on the web around peer production?  The ones that aren’t one-way communication or two-way communication, but community-oriented communciation.  (Note I am resisting hard calling them Web 2.0, but you know it’s there somewhere.)  Does the New Media Deal still apply, or are we on to something else?  I think the rules are morphing once again, and now there’s a new deal — let’s call it the We Media Deal — that builds on the “data as part of the value exchange” moniker of the New Media Deal. Like its predecessor deals, the We Media Deal doesn’t replace the New Media Deal or the Old Media Deal, it just adapts it for new types of services.

The We Media Deal has two components to it:  (1) the value of the service to you increases in lock-step as you contribute more data to it, and (2) the more transparent the value exchange, the more willing you are to share your data.

Ok – that sounds very academic – what do I mean in plain English? Let’s break it down.

1. The value to you increases in lock-step as you contribute more data.  This is something that probably wasn’t obvious with the original New Media Deal, since it wasn’t clear that if you gave My Yahoo! incrementally more data (one more stock quote, for example), you’d get more relevant ads or services.  It’s a pretty static value exchange.  But think about the new generation of web services around peer production.

– The more you use Delicious to bookmark web pages, the more relevant it becomes to you, and the more dependent you become on it as your own “Internet within an Internet.”

– The more you wite a blog or post photos to Flickr, the more engrained the act of blogging becomes in your daily existence — you start looking at the world, ever so slightly, through the lens of “that would make an interesting posting” (trust me).

– The more you use Wikipedia (or wikis in general), the more committed you become to Wikipedia as your first go-to source for information, and the more you get infected with the desire to contribute to it.

The bottom line with the first part of the We Media Deal is that the more you give to the system, the more you want and need out of the system.  A big part of peer production is that most people fundamentally, if quietly, want to belong to any bit of community they can find.  All these new web services of late have transformed the mass Internet from a read platform to a read/write platform, so now everyone can have a say in things.  The same reason eBay is cooler and bigger than the New York Times on the Web will drive this new generation of services, and new spins on old services, forward.

2. Next up — the more transparent the value exchange, the more willing you are to share your data.  Transparecy rules.  When you contribute to the web, you’re exposed, so why is trasparency a help and not a hindrance?  Let’s look at the same 3 examples.

– Delicious let’s you delete your account and all your personal data.  They’re blatant about it during the sign-up process.  The result?  It increases your trust in the network since you can easily exit at any time.

– Blogging and Flickr couldn’t be more transparent.  They’re personal printing presses.  If you’re good at it, you really have to think before you write. It’s you – you’re really hanging out there transparent for all the world to see – therefore you’re even more invested in what you write and derive even more value from the activity.

– Similarly, Wikipedia tracks who changes what, and if you make an error, the community will correct it in an astonishingly short time frame, keeping you honest.

The good news is that, while the We Media Deal is coming of age, our New Media Deal is alive and well and growing stronger as the web evolves as well.  Free services and more targeted advertising in exchange for some of your personal data makes a ton of sense when the right balance of service and data is there.  Transparency and control make the We Media Deal an even stronger stronger bond between company and individual, mostly because the bond is between company and community — the deal gets more solid the more we as individuals invest in it.

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.

More Good Inc.

Last year I was pleased and proud to write about our debut on the Inc. 500 list of America’s fastest growing companies.  At that time I wrote that “Now our challenge, of course, is STAYING on the list, and hopefully upping our ranking next year!”  Well, I am again please and proud to announce that we, in fact, stayed on the list.  (You can read all the Inc. coverage here and see our press release about the ranking here.)

Unfortunately, we didn’t make the second part of our goal to up our rank.  But, we did up our growth – our three-year revenue growth rate was 18% higher than last year.  This is a testament to the hard work of our team (now 150 strong!) and wouldn’t be possible without the support of our many great clients (now 1,500 strong!).  Most importantly, we see no end in sight.  In fact, 2008 promises to be an even bigger year for us as we poise for continued growth.  By the way, would you like to be part of a team that has now ranked as one of America’s fastest growing companies two years in a row?  Check out our Careers page and join the team that is advancing email marketing, one company at a time.

My name is Matt Blumberg. I am a technology entrepreneur and business builder based in New York City. I am CEO of Markup AI, the leading provider of Content Guardian Agents to companies of all sizes looking to scale their use of AI to generate content smartly and safely. We are defining a new category in the Generative AI space and crushing it.

Before that, I started a company called Bolster, which was an on-demand executive talent marketplace.  We created a new way to scale executive teams and boards aimed at early and mid-stage tech companies. The business sort of worked and sort of didn’t work. We wound it down in 2025 and decided to focus on helping the portfolio companies we invested in via Bolster Ventures and help our friends with talent referrals on a more informal basis.

My longest career stint was Return Path, a company I started in 1999, which we sold in 2019.   We created a business that was the global market leader in email intelligence, analyzing more data about email than anyone else in the world and producing applications that solve real business problems for end users, commercial senders, and mailbox providers.  In the end, we served over 4,000 clients with about 450 employees and 12 offices in 7 countries.  We also built a wonderful company with a signature People First Culture that won a number of awards over the years, including Fortune Magazine’s #2 best mid-sized place to work in 2012.

Early in my career, I ran marketing and online services for MovieFone/777-FILM (www.moviefone.com), now a division of AOL. Before that — I was in venture capital at General Atlantic Partners (www.gapartners.com), and before that, a consultant at Mercer Management Consulting (www.mercermc.com). And I went to Princeton before that.

Based on this blog, I wrote a book called Startup CEO:  A Field Guide to Scaling Up Your Business, which was published by Wiley in 2013 and updated in 2020. I followed that by co-authoring a book with a number of my fellow executives from Retutrn Path and Bolster called Startup CXO: A Field Guide to Scaling Up Your Company’s Critical Functions and Teams; as well as the second edition of Startup Boards: A Field Guide to Building and Leading an Effective Board of Directors along with Brad Feld and Mahendra Ramsinghani. I hosted a podcast called The Daily Bolster, with over 200 micro-episodes (mostly 5-6 minutes long) where I interview other CEOs to share their stories and hacks.

I have been married for over 25 years to Mariquita, who is, as I tell her all the time, one of the all-time great wives. We have three great kids now in their late teens, Casey, Wilson, and Elyse.

I have lots of other hobbies and interests, like coaching my kids’ baseball and softball teams; traveling and seeing different corners of the world; reading all sorts of books, particularly about business, American Presidential history, art & architecture, natural sciences (for laymen!), and anything funny; cooking and wishing I lived in a place where I could grill and eat outdoors year-round; playing golf; lumbering my way through the very occasional marathon, eating cheap Mexican food; introducing my kids to classic movies; and playing around with new technology. I hosted a limited edition podcast series called Country Over Self which explored the topic of virtue in the Oval Office along with a dozen prominent presidential historians.

IF YOU WANT TO UNDERSTAND WHAT THIS BLOG IS ALL ABOUT, read my first two postings: You’re Only a First Time CEO Once, and Oh, and About That Picture, as well as my updated post when I relaunched the blog with its new name, StartupCEO.com.

Welcome to the new StartupCEO.com!

I started writing this blog in May of 2004 with an objective of writing about the experience of being a first-time entrepreneur — a startup CEO — inspired by a blog post written by my friend, long-time Board member and mentor Fred Wilson entitled “You’re only a first time CEO once.”  The blog and the receptivity I got along the way from fellow startup CEOs encouraged me to write a book called Startup CEO:  A Field Guide to Scaling Up Your Business, which was originally published in 2013 and then again as a second edition last year in 2020.

Today I am relaunching the blog as StartupCEO.com both to reflect that relevance of that brand as the book continues to get good traction in the startup ecosystem, and to reflect the fact that I’m now on my second startup as CEO, so “Only Once” doesn’t seem so fitting any more.

The web site has a very minimalist design – and I realize many of you read posts on either RSS or email — those will still operate the same as they have been (no new RSS feed).

As I approach the first anniversary of starting our new company, Bolster, where we help startup CEOs scale their teams, themselves, and their boards, I am recommitting to this blog and will try to post at least once a week.  Because there is a lot of overlap between this blog and Bolster’s blog (which I’d encourage you to subscribe to here either by email or RSS), posts will occasionally show up on both blogs, or I’ll put digests of Bolster blog posts here.  

But the Bolster blog will be broader and will also have many additional authors besides me, while this blog will remain distinct about some of the experiences I’m having as a startup CEO.

The Value of Constraints

The beauty of Twitter is that a tweet can only be 140 characters long.  With that as a constraint, you end up seeing some amazingly creative messages on Twitter that manage to convey both a specific tone and a lot of content — in close quarters!

The same logic can apply to business more generally.

• If you give your team two hours to solve a complex problem, you’ll be amazed at how far they can get with it, even if they don’t have enough time to do thorough research
• If you have to balance your budget every year, you’ll be amazed at the clarity of decision-making you find yourself with (Wonder why Congress can’t figure out how to spend less money?  They don’t have to!)
• If you only have 5 minutes to make a presentation to your executive team on a complex topic, you’ll be amazed at how quickly you can figure our your main three points, and stick to them

It’s very simple – constraints force economy and clarify objectives.   If you MUST make hard choices, you do.  If you HAVE TO set priorities, you do.  If you have to streamline your thinking, you do.  Of course, you may not be able to convey the subtleties and richness of character of War and Peace in 140 characters, but that doesn’t mean there’s no value to constraints.  Try out one of the above exercises sometime and see what you get.