My latest book (I’m a co-author along with Brad Feld and Mahendra Ramsinghani), Startup Boards: A Field Guide to Building and Leading an Effective Board of Directors, is now live on Amazon – today is publication day! The book is a major refresh of the first edition, now eight years old. I was quoted in it extensively but not an official author – Brad and Mahendra were nice enough to share that with me this time. The book includes a lot of new material and new voices, including a great Foreword by Jocelyn Mangan from Him for Her and Illumyn. It’s aligned with Startup CEO and Startup CXO in look and in format and is designed to be an easy-to-read operator’s manual to private company boards of directors. Brad also blogged about it here.

We’ve done a lot of work around startup boards at Bolster the past couple of years, including working with over 30 CEOs to help them hire amazing new independent board members. Our landmark Board Benchmark study last year highlighted the problem with startup boards, but also the opportunity that lies within: not enough diversity on the boards, but also not nearly enough independent directors — and a lot of open seats for independent directors that could be filled. That conclusion led me to my Startup Board Mantra of 1-1-1: Independent directors from Day 1, 1 member of the management team, and 1 independent for every 1 investor.

As we posted on the Bolster blog last week, our quick refresh of the Board Benchmark study revealed some good news and some bad news about progress on diversity in the boardroom with startups. The good news is that the needle is starting to move very slowly, and that independent directors present the best opportunity to add diversity to boards. Our data shows that half of all new directors brought onto boards in the last year were independents, and of those, 57.9% were women and 31.6% were non-White board members. Those numbers are well above the prior study’s benchmarks of 36% and 23%, respectively (our experience running board searches skews even further to women and non-White directors being hired).

The bad news is how slowly the needle is moving — only 20% of open independent board seats were filled over the previous year, which is a lot of missed opportunity. The main takeaway is that while overall representation on boards is still skewed largely White and male, the demographic profile of new board appointments looks a lot different from the representation on boards today, indicating that CEOs are making intentional changes to their board composition.

Startup boards are a great way to drive grassroots change to the face of leadership in corporate America. More CEOs need to follow up by filling their open board seats and fulfilling their stated desires to improve diversity in the boardroom. This takes time and prioritization — these are the places where we see board searches either never get off the ground, or falling down once they do, for all the searches we either run or pitch at Bolster.

Hopefully Startup Boards will help the startup ecosystem get there.

Book Short: Sequel Not Worth It

Mastering the 7 Essentials of High Growth Companies, by David Thomson, was a poor sequel to the solid Blueprint to a Billion [review] [buy]– and not worth reading if you’ve read the original.  It was very short for its price and contained mildly interesting examples of “blueprint companies” that augmented the original book but didn’t uncover any new material or add any thinking to the mix.  Basically, it was like another couple chapters that should have been part of Blueprint.

It is not a bad buy in lieu of the original if you haven’t read either one yet, as Blueprint is a bit longer than necessary, but otherwise, you can skip this one.

On a side note – the author’s interactive scorecard is a decent diagnostic tool (though also, I am sure, a lead gen tool for his consulting business).

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.

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.

Another CEO with whom I trade notes on the craft of running a company asked me this question the other day, and I thought the answer would make a for a good blog post.  Any product team (or other kind of team) who has Agile practices, does some kind of a Daily Standup (DSU) meeting in which each team member reviews progress against goals for a given period and highlights issues where he or she is blocked and needs help.  I wrote about Return Path‘s journey to implement Agile across the whole company last year here.

My meeting routines have been shaped over the years but the current versions are largely influenced by Lencioni’s Death by Meeting, which is worth a read. My blog post isn’t all that helpful about this specific subject, but it’s here.  Anyway…here’s what I wrote to my friend:

I love our DSU. We do it at 11 eastern because we have people in Colorado and California on it. We just make the time. We block 15 minutes, but most people block the full :30 and sometimes a small sub group will need to stay late to cover something in more depth (we call that the after-party or the 16th minute). If I had everyone in the same time zone, I would do it at 8:30 or 9:00. 

We usually just “run the calendar” at the DSU. What’s everyone doing today, anything notable from yesterday, anything people need broader quick hit updates on, especially things that are cross-team. It’s great daily connectivity. We have tried to run the exec team like a true agile team in the past with cards and demos, etc., but that didn’t really work other than the occasional time when all of us were working on something together (e.g. Annual budgeting and planning), since a lot of our work as leaders is down, not across. 

We do the meeting Tuesday through Friday. We probably cancel 1 a week on average if too many people have to miss it. People know it’s a priority and not to schedule over it unless unavoidable, but sometimes travel, client conflicts, etc. invade. 

Mondays we still do our Weekly Tactical for an hour. I have a whole standing agenda format for that (as well as our Monthly Strategies for 2-3 hours and Quarterly Offsites for a couple days). I find that the Weekly Tactical actually goes much better with the four DSUs because we don’t have to spend time checking in on the basics…so we are much more effective in using that time on bigger items like sales forecast and recruiting review, progress against major initiatives and OKRs, having other people come in and present things to us, etc. 

I enjoy reading books written by people I know. I can always picture the person narrating the book, or hear their voice saying the words, I can periodically see their personality showing through the words on the page, and books bring out so much more detail than I’d ever get from a conversation. Loved: How to Rethink Marketing for Tech Products, by Martina Lauchengco, is one of those books. Martina is an operating partner at Costanoa Venture Capital, an investor in both Return Path and Bolster, and I’d known Martina for several years before she joined Costanoa through Greg Sands. She’s the best product marketer on the planet. She’s the also one of the nicest people around.

Product Marketing is a tricky discipline. A brand marketer on my leadership team years ago referred to it somewhat derisively as a “tweener” function, one of those things that’s not quite marketing and not quite product. We didn’t get the function right for many years at Return Path because we treated it that way, thinking “well, it’s neither fish nor fowl, so we’re not quite sure what to do with it.” Then we hired Scott Roth, who has gone on to have a storied career as a multi-time CEO. Scott’s background was in product marketing. He said to me in his interview process, “Product Marketing isn’t a tweener function with no home. It’s a glue function. It holds product and marketing together.” It’s amazing how that simple change in framing, combined with great leadership, led us to completely rethink the function and make it one of the most important functions in the company.

Martina brings that to live with Loved. Simply put, Loved is a handbook or a field guide to running the Product Marketing function. I can imagine it being a section of Startup CXO in that way — it’s incredibly practical, hands-on, how-to, and rich with examples from Martina’s amazing career at Microsoft, Netscape, Silicon Valley Product Group, and Costanoa. And she believes in Agile Marketing, which is always a plus in my book (and I find rare in marketers).

Martina has lots of great frameworks and stories in the book – key responsibilities of product marketing, key metrics, the release scale, the connection to Geoffrey Moore’s TALC, strategies for messaging, pricing and packaging, and more. I won’t spoil more than one here, but I will paraphrase one that I found particularly impactful, a bit of a checklist on the essence of great product marketing:

• Share data around shifting trends in buyer behavior
• Connect your product’s purpose with broader trends
• Rebrand to make your product seem bigger than it is (and save room for expansion down the road)
• Make it free, especially if you’re defining a new category
• Share the “why” and advance access with influencers

If the measure of a book’s impact is how many pages you dog ear or highlight, this says it all about Loved.

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?

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.

Wither the News? (Plus a Bonus Book Short)

It’s unusual that I blog about a book before I’ve actually finished it, but this one is too timely to pass up given today’s news about newspapers.  The Cult of the Amateur: How Today’s Internet is Killing Our Culture, by Andrew Keen, at least the first 1/2 of it, is a pretty intense rant about how the Internet’s trend towards democratizing media and content production has a double dirty underbelly:

poor quality — “an endless digital forest of mediocrity,”

no checks and balances — “mainstream journalists and newspapers have the organization, financial muscle, and and credibility to gain access to sources and report the truth…professional journalists can go to jail for telling the truth” (or, I’d add, for libel)

So what’s today’s news about newspapers?  Another massive circulation drop — 3.6% in the last six months.  Newspaper readership across the country is at its lowest level since 1946, when the population was only 141 million, or less than half what it is today.  The digital revolution is well underway.  Print newspapers are declining asymptotically to zero.

Don’t get me wrong.  I’m an Internet guy, and I love the democratization of media for many reasons.  I also think it will ultimately force old media companies to be more efficient as individual institutions and as an industry in order to survive (not to mention more environmentally friendly).  But Keen has good thoughts about quality and quantity that are interesting counterpoints to the revolution.  I hope at least some newspapers survive, change their models and their cost structures, and start competing on content quality.  The thought that everyone in the world will get their news ONLY from citizen journalists is scary.

I’m curious to see how the rest of the book turns out.  I’ll reblog if it’s radically different from the themes expressed here.

Update (having finished the book now): Keen puts the mud in curmudgeon. He doesn’t appear to have a good word to say about the Internet, and he allows his very good points about journalistic integrity and content quality and our ability to discern the truth to get washed up in a rant against online gambling, porn, and piracy. Even some of his rant points are valid, but saying, for example, that Craigslist is problematic to society because it only employs 22 people and is hugely profitable while destroying jobs and revenue at newspapers just comes across as missing some critical thinking and basically just pissing in the wind. His final section on Solutions is less blustry and has a couple good examples and points to offer, but it’s a case of too little, too late for my liking.

Book Short:  More on Email Marketing

My friend Bill Nussey’s The Quiet Revolution in Email Marketing is a good read for those in the industry.  It’s a little different in focus than our recently published book, Sign Me Up!, and in many ways is a good complement.

Bill develops a good framework for Customer Communication Management (CCM) based on his experience as CEO of SilverPop, one of the leading email marketing companies.  He builds on Seth Godin’s permission framework and applies it directly to email marketing, point by point.  He addresses head on every email marketer’s nightmare, when you tell someone what you do for a living, and the person replies “oh, you’re a spammer.”

The book also has a wonderful quote from Bill’s SilverPop colleague Elaine O’Gorman:  “Locking down email policies and enforcement too tightly i like cooking a potato in the microwave.  If you don’t poke some holes in the potato before turning on the microwave, you’ll be doing a lot of clearning up afterwards.”

Book Short:  Shamu-rific

I re-read an old favorite last night in preparation for a management training course I’m co-teaching today at Return Path:  Ken Blanchard’s Whale Done! The Power of Positive Relationships.  I was reminded why it’s an old favorite.  It has a single concept which is simple but powerful.  And yes, it’s based loosely on killer whale  training tactics.

Accentuate the positive.

The best example in the book is actually a personal one more than a professional one.  The main character of the book has a “problem” in that he chronically works late, then comes home and gets beat up by his wife about coming home so late.  The result?  No behavior change — and probably even a reinforcement of the behavior because, after all, who wants to come home and get beat up?  The change as a result of the new philosophy?  The wife thanks her husband when he does come home at a more reasonable hour, makes him a nice dinner, etc. which makes the husband WANT to come home earlier.

That’s probably a poor paraphrasing of the story, and as I’m typing the story out here, boy does it sound a bit 1950s in terms of its portrayal of gender role stereotypes.  Nonetheless, I think it makes the point well.

Try it out sometime at work (or at home).  Pick a behavior you want to see more of out of a direct report, especially one that’s linked to another behavior you don’t like.  Accentuate the positive.  Make the person WANT to do more of it.  And watch the results!