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.

Just Ask a 5-Year Old

I heard this short but potent story recently. I can’t for the life of me remember who told it to me, so please forgive me if I’m not attributing this properly to you!

So there you go. What makes us get de-skilled or dumber as we get older? Nothing at all! It’s just our expectations of ourselves that grow. The bar goes up for what it takes to count yourself as knowing how to do something with every passing year. Why is that? When we were 5 years old, all of us were about the same in terms of our capabilities. Singing, painting, dancing, tying shoes. But as we age, we find ourselves with peers who are world class specialists in different areas, and all of a sudden, our perception of self changes. Sing? Me? Are you kidding? Who do I look like, Sting?

I see this same phenomenon in business all of the time. The better people get at one thing, the worse they think they are at other things. It’s the rare person who wants to excel at multiple disciplines, and more important, isn’t afraid to try them. But we’ve seen lots of success over the years at this at Return Path. The account manager who becomes a product manager. The tech support guy who becomes a software developer. The sales rep who becomes an account manager.

I love these stories! My anecdotal evidence suggests that people who do take this kind of plunge end up just as successful in their new discipline, if not more so, because they have a wider range of skills, knowledge, and perspectives on their job. Or it could just be that the kind of people who WANT to do multiple types of jobs are inherently stronger employees. Not sure which is the cause and which is the effect.

It’s even more rare that managers allow their people the freedom to try to be great at new things. It’s all too easy for managers to pigeonhole people into the thing they know how to do, the thing they’re doing now, the thing they first did when they started at the company. “Person X doesn’t have the skills to do that job,” we hear from time to time.

I don’t buy that. Sure, people need to be developed. They need to interview well to transition into a completely new role. But having the belief that the talent you have in one area of the company can be transferable to other areas, as long as it comes with the right desire and attitude, is a key success factor in running a business in today’s world. The opposite is an environment where you’re unable to change or challenge the organization, where you lose great people who want to do new things or feel like they are being held back, and where you feel compelled to hire in from the outside to “shore up weaknesses.” That works sometimes, but it’s basically saying you’d rather take an unknown person and try him or her out at a role than a known strong performer from another part of the organization.

And who really wants to send that message?

I Wonder if I Could Ever Work for a Big Company

And I mean a REALLY BIG one.  At my high school reunion last weekend, my friend Jason, who I hadn’t seen in 10 years (and only once in the last 20), heard what I’m doing with my life, and said to me “I’m so glad for you.  I couldn’t figure out if you were going to do big company or something entrepreneurial.  I’m sure you would have done well either way, but isn’t what you’re doing more fun?”

I think he’s right.  It is more fun.  Every time I have a meaningful interaction with a friend or client inside a huge company, I come away shaking my head a bit.  The politics of huge organizations are a little mind-numbing.  People seem obsessed with it – who reports to whom, who is in and who is out, to the point where it must distract them from their actual work.  And as far as I can tell, most (though certainly not all) large companies do major reorganizations every 12 months that also stop business dead in its tracks.  It’s a wonder companies like that get anything done at all.

This notion was reinforced for me at a two-day training seminar I attended last week on Balanced Scorecard implementation, something we’re rolling out now at Return Path.  It was a good training course, but not geared to C-level execs at growth companies.  Most of the people in attendance were mid-level managers at big companies who were “project managing” Balanced Scorecards.  As a result, sections of the course were devoted to topics like “finding an executive sponsor” and “selling the idea up the management chain.”  Oy!

The kind of work I love doing is work that has a direct impact, a real connection to the company’s results.  Work that is, well, work, not time spent figuring out how to get work done.  Maybe this isn’t fair – I’m sure there are perfectly good BIG companies out there that don’t function this way – but they do seem to be few and far between.

I hope Jason is right – if I were to work in a big company, I’d do well – but boy does it sound like not fun.  Or at least it sounds like not productive work.

Desperately Seeking an Owner for “Other”

A couple weeks ago in Living with Less…For Good, I mentioned that we’re on a crusade against extraneous expenses at Return Path these days, as is pretty much the rest of the world.

After a close review of our most recent month’s financials, we have a new target:  “Other.”  A relatively inconspicuous line on the income statement, this line, which different companies call different things such as “Other G&A” and “General Office,” is inherently problematic NOT because it inherently encompasses a huge amount of expenses, although it might, but rather because it inherently doesn’t have an owner and rarely has a budget.

As we dug into the gory details of “Other” our accounting system (btw – we LOVE Intacct – great web-based application for better information flow and transparency), our Exec team came to this realization the other day.  It’s not that we buy too many pens, per se.  It’s that the absence of someone being in charge of that line item means that no one manages it to a budget – or even just manages it to some kind of reasonability test.  What we found in the details was that there are definitely more areas we can do better at managing expenses here.  No individual item is going to change our income statement profile, but little things do add up to big things in the end.

Whether it’s duplication of expenses, too much FedEx, forgotten recurring items, or the storage locker that we don’t even know what’s in any more, we’re spotting little ways to save money left and right.

For us going forward, we are going to put someone in charge of this line item, develop a budget, and without forcing big-company-like procurement policies on the rest of the organization, manage it down!

The Evils of Patent Litigation

There have been a lot of posts over the years on the blogs I read about patents and how they are problematic.  I know Brad has done a bunch, including this one. I wrote one once about a dumb patent issued in the email space, which is here. 

And of course no listing of great patent posts would be complete without a nod to my colleague Whitney McNamara, who I believe coined the term "ass patent" starting with this post.  In fact, Whit has a whole category of posts on his blog about ass patents.  

But one of the most thoughtful, accurate, and proscriptive ones I've read is what Fred wrote a couple days ago.

And I should know.  We are the company that he refers to who spent about half a million dollars successfully defending ourselves (for now – who knows what appeals might bring) against a baseless suit by a patent troll.  For the record, we did try to settle and were presented with a multi-million dollar option only.  I have been advised by our lawyer not to write about this case because there are elements of it that are still pending, but I don't care.  I'm irritated enough about it that I want to get this out there while it's still fresh in my mind.  And I'm not going to use names here or say anything I wouldn't say publicly in any other forum.

I've thought about this problem a lot for the last several years, as you might imagine.  Fred's two patent reforms — that plaintiffs who lose a suit have to pay defendant legal fees, and that patents should have a "use it or lose it" clause like trademarks — would totally do the job. 

I'm a fan of the "losing plaintiff pays" clause, but one challenge is that it would discourage a certain percentage of legitimate suits and claims, particularly from small inventors, out of fear that high-priced defense counsel will not only win on some technicality BUT will then cost a disproportionate amount of money since the risk is completely transferred to the other side.  This is probably a challenge that's worth living with, but it has the potential to be a "lesser of two evils" solution.

I love the "use it or lose it" one in particular, because it would not just force companies to use the invention, but it would also more clearly articulate what the patent is.  In many cases with business process patents, it's too unclear what the patent actually covers and whether or not other inventions are in conflict with it.  Too much is left up to wording interpretations.  That would not be the case if the invention was actually in use!

Here's another problem with the system that I think requires a third simple solution.  I'll call it The BigCo problem, and it happened to us in our case.  The BigCo problem is that the same troll who sued us also sued two other companies, one of them a Fortune 100 technology company, concurrently and similarly baselessly over the same patents.  But here was the problem:  the troll suing us wouldn't consider a modest settlement with us, even knowing that our resources were limited, because doing so would make it harder for them to pursue their case against BigCo and get a Big Settlement.

So here's my proposed third simple solution:  a defendant-initiated settlement should be confidential and not influence the outcome of related pending litigation.  Why should little guys have to suck up costs because BigCo has deep pockets?

I hope last year's ruling around business process patents (creating a more narrow definition of what is patentable) helps with patent trolls, one of the real scourges of the Internet — possibly even a new member of the Internet Axis of Evil — but it won't solve the problem the way Fred's two suggestions will.

UPDATE:  Great comment from Mike Masnick: 

another very very very useful solution to the problems you face would be (finally) allowing an "independent invention" defense to patents. The problem is that almost no patent infringement lawsuits are actually due to someone "copying" someone else's product or patent. The vast majority are due to "independent invention." I think two things should happen: 1. If sued, and you can show an independent invention defense the case is over. And… 2. If you can show that independent invention defense and it works, the patent itself should be invalidated. This is because patents are only supposed to be granted for inventions that are new and non-obvious to those skilled in the art. If those skilled in the art are coming up with the same concept independently, I'd say it fails the non-obvious to those skilled in the art scenario. Do that and much of the patent problem goes away, while still "protecting" the scenario where some company just flat out copies an invention.

Book Short: A Marketing-Led Turnaround

Generally, I love books by practitioners even more than those by academics.  That’s why Steve McKee’s first (I assume) book, When Growth Stalls:  How it Happens, Why You’re Stuck, and What to do About It (book, Kindle edition) appealed to me right out of the gate.  The author is CEO of a mid-size agency and a prior Inc. 500 winner who has experienced the problem firsthand – then went out, researched it, and wrote about it.  As a two-time Inc. 500 winner ourselves, Return Path has also struggled with keeping the growth flames burning over the years, so I was eager to dig into the research.  The title also grabbed my attention, as there are few if any business books really geared at growth stage companies.

I’d say the book was “solid” in the end, not spectacular.  Overall, it felt very consistent with a lot of other business books I’ve read over the years, from Trout & Reis to Lencioni to Collins, which is good. The first half of the book, describing the reasons why growth stalls, was quite good and very multi-faceted.  His labeling description of “market tectonics” is vivid and well done.  He gets into management and leadership failings around both focus and consensus, all true.  Perhaps his most poignant cause of stalls in growth is what he calls “loss of nerve,” which is a brilliant way of capturing the tendence of weak leadership when times get tough to play defense instead of offense.

The problem with the book in the end is that the second section, which is the “how to reverse the stall” section, is way too focused on marketing.  That can be the problem with a specialty practitioner writing a general business book.  What’s in the books makes a lot of sense about going back to ground zero on positioning, market and target customer definition and understanding, and the like.  But reversing the stall of company can and usually must involve lots of the other same facets that are documented in the first half of the book — and some other things as well, like aggressive change management and internal communication, systems and process changes, financial work, etc.

At any rate, if you are in a company where growth is stalling, it’s certainly a good read and worth your time, as what’s in it is good (it’s what’s missing that tempers my enthusiasm for it).  In this same category, I’d also strongly recommend Confidence:  How Winning Streaks and Losing Streaks Begin and End, by Rosabeth Moss Kanter, as well.

Maybe I Should Shave My Beard

I just couldn’t resist.  I’d apologize to Mel if he weren’t such a jackass.  Not that I don’t love the Lethal Weapons and other fine films, mind you.  But if anything in the last four years has nudged me towards shaving my beard, or at least keeping it neat and trim, it’s this stark comparison:

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Not Dead Yet

Ah Spring.  Flowers bloom.  Love is in the air.  And it’s time for the annual round of “email is dead” articles and blog posts.  With apologies to Monty Python, and on the heels of last week’s fracas about social networking having more users than email, once again I say, email is Not Dead Yet!

Three articles of late are pretty interesting and point out that the trends in online channel usage are far murkier than meets the eye.

First, Sherry Chiger’s story in Direct that One in Five Merchants Shuns Marketing Email has a poor headline for an interesting, data-rich article.  The article should be about how “Four in Five” adopt.  The article has links to a bunch of interesting in-depth reports you can download, but some of the eye-catching stats include the fact that more B2C companies use email than their own web site for marketing (96% vs. 90%); that the #1 use of “if I had more money in my marketing budget, it would go to” is “creating more sophisticated email”; and that email is the “most valuable online strategy,” beating out SEO and materially ahead of Social Media, SEM, sending offline traffic online, affiliate, display, and abandoned shopping cart marketing.

Sherry’s follow up article entitled E-mail and Social Media: The New Chocolate and Peanut Butter

 and Liana Evans’ article in ClickZ, Email Can Be Social Media’s Best Friend, both explain the interplay of email and social media nicely.  You can’t, or at least shouldn’t, have one without the other.  This matches our experience at Return Path, where a number of our largest clients are the biggest social networks.  We always say that “social networking runs on email.”  Look at your inbox sometime and see how many messages are from Facebook, LinkedIn, Twitter, etc., which prompt you to create page views for them, um, I mean, visit their sites.

And of course the recent Morgan Stanley data is somewhat problematic (chart published here among other places).  First, I’m not sure where their base data came from, but I’ve never seen an estimate of worldwide email users that’s only 850MM.  The Morgan Stanley report says there are 1.8B people online worldwide, and there are been stats consistently published over the years that between 80-95% of people online use email.  This report from Radicati has the number of email users worldwide growing from 1.4B last year to 1.9B over the next few years. That sounds more like it.  

There’s no question that people spend more time in social networks and will continue to. They’re more multi-faceted. But that “error” in reporting on number of email addresses pretty dramatically changes the two charts. Plus, don’t you have to have an email account to sign up for most social networks?  And as my colleague Ezra Fischer noted, how the counting works in these two charts is important. For example, I have 2-3 email accounts, but I have 10-12 social network accounts. Am I counted once in each category, or 2-3 in the first and 10-12 in the second? Or worse, once in the first and 10-12 times in the second?

Anyway, every time I write one of these “in defense of email” posts, I get criticized for having too vested an interest in the subject matter to be objective.  If that’s the case, so be it – but who else is going to highlight the positive counterpoints when the buzz is all pointed to the demise of email?

How to Crush Your Competition

My friend Karl used to call this the “embrace and extend” theory of competition, and when it works, it’s brilliant.  I just found a new example of it yesterday (thanks, Jack!) that’s very illustrative.

I have been a Firefox user for a couple years now and love the browser and its extensions.  I almost never use Internet Explorer any more — although sometimes I “have to,” because there are a couple of web applications I use that just don’t work well in Firefox, like Outlook Web and online banking.  Hopefully some of that will change over time as Firefox gets more mainstream, but in the meantime, there’s now a Firefox extension that allows you to open certain web pages in Internet Explorer — within Firefox.  I’m not sure how it works technically, and I’m not sure I care, but basically, the new tab that opens with the designated web sites has the little Microsoft “e” as the icon on the tab, and voila — the sites work perfectly using the Internet Explorer engine within Firefox.  So now I never have to open up Internet Explorer again.

Score one for Firefox on the competition front.  How can you apply this kind of competitive framework to your business?

Here’s the link to download the extension, then once it’s installed and you’ve restarted the browser, simply go to the Tools menu and then the IE Tab Options link to add the URLs you need to add.

• Seth’s Blog: Going to meetings
  A great posting about Vendor Love from Seth Godin!
  (tags: Entrepreneur)

One of the things I love about the business we’re building at Bolster is that we’re creating a whole new way for companies to access executive talent. It’s not just that we do full-time searches better, faster, and cheaper than traditional search firms. It’s that we approach the whole topic differently and with a more flexible mindset that matches the dynamic needs of our startup and growth stage clients.

As I wrote last week in You Don’t Need a CRO, CEOs often come to us thinking they need a full-time executive – usually a CRO or COO. And sometimes they do. If we were an executive search firm, we might agree and sell them the thing that we have to sell, which is full-time searches.

But a full-time senior executive is often the wrong answer to whatever problem the CEO is feeling at the moment. Sometimes it’s that they’re just overwhelmed and need help. Sometimes someone on their team isn’t scaling. There are a lot of other options out there for getting executive-level help, advice, and deliverables without making a full-time hire, for example:

• Fractional executives who can work as much as half time and as little as a day or two per month, giving you many of the benefits of an experienced executive without all of the cost and risk and equity commitment
• Project-based executives who can come in and help you with a specific thing you don’t know how to do or don’t have time to do yourself
• Functional mentors to help level up someone on your team with expertise you may not have yourself
• Independent directors to help add whatever voice is missing from your leadership team, whether it’s the voice of the customer or an experienced operator in a given function or domain

In the world of startups and growth companies, staffing at the most senior and expensive levels needs to be nuanced. That’s why I’m glad we have a lot of different options to help CEOs out. Because if all we were holding was a hammer, everything would look like a nail.