Half as Long, One Third as Hard

(Post written on Saturday, August 23.) I ran the Mesa Falls Marathon & Half Marathon near our house in Teton Valley, Idaho today.  I ran the 1/2 and Brad ran the full marathon as part of his quest to run 50 marathons, one in each state, by the time he turns 50.  Return Path is a proud sponsor of Brad’s running, donating $1,000 for each race he completes to the Accelerated Cure project for Multiple Sclerosis.

Brad chronicled the race here.

The run was set up well for us.  I wasn’t up for training for a full marathon, and this race had a half marathon that started at the halfway point of the full race, 2 hours after the start of the race.  So I waited a few minutes with Amy at that point until Brad came cruising by us, and then he and I ran it in together.  I was in charge of keeping him fresh and focused during a big hill and when he hit the proverbial wall.

As usual, the 26.2 mile run is an awe-inspiring distance.  Even more so running the second half of it with Brad today when I had fresh legs at the beginning and he had already done 13.1 miles.  My conclusion, based on my training, my strength at the finish, and the way my legs feel at the moment (pre-Advil and pre-cocktail), is that a half marathon is a nice accomplishment, but it’s not 1/2 as hard as a full marathon.  It’s probably about 1/3 as hard.  I’m sure there’s some great CEO metaphor about doing something halfway with a third of the effort, but I can’t conjure it up at the moment. 

So hats off to Brad on completing #12 in his amazing series. I was delighted to have my favorite people in the world meet me at the finish line, shown here  with Amy taking our picture.  (Yes, for those who are wondering, we are expecting #3 in January.) 

Also, Happy Birthday to my colleague Brian Westnedge, who was born in Ashton, Idaho (right near Mesa Falls) a bunch of years ago on the race day of all days.

Academic Inspiration

I just read in my alumni magazine that at Opening Exercises for incoming freshmen this year, Princeton President Shirley Tilghman closed her remarks with the following:

For the next four years, you will be encouraged – and indeed sometimes even exhorted – to develop the qualities of mind that allowed Katherine Newman, Simon Morrison, and Alan Krueger to change what we know about the world.  Those qualities are the willingness to ask an unorthodox question and pursue its solution relentlessly; to cultivate the suppleness of mind to see what lies between black and white; to reject knee-jerk reactions to ideas and ideologies; to recognize nuance and complexity in an argument; to differentiate between knowledge and belief; to be prepared to be surprised; and to appreciate that changing your mind is not a sign of weakness but of strength.  We ask you to be open to new ideas, however surprising; to shun the superficial trends of popular culture in favor of careful analysis; and to recognize propaganda, ignorance, and baseless revisionism when you see it.  That is the essence of a Princeton education.

While some of these comments are more appropriate for an academic setting, how many of us who run businesses want to encourage the same behavior and thoughtfulness of our employees?  Here are a few examples taken from the above.

To change what we know about the world — a hallmark of a successful startup is to invent new products and services, to change the way the world works in some small way.  In our case, to fix some of the most critical problems with email marketing.

The willingness to ask an unorthodox question and pursue its solution relentlessly — reinventing some part of the world only comes by challenging the status quo.  Return Path was started by asking an unorthodox question:  why isn’t there an easy way for people to change their email address online?

To cultivate the suppleness of mind to see what lies between black and white; to recognize nuance and complexity in an argument — the longer I run a company, the less black and white I see.  When I do seev it, I think of it as a gift.  The rest of the day is spent trying to figure out the zone in between.  Making 51/49 decisions all day long is difficult, but it’s easier when the rest of the organization is capable of doing the same thing.

To appreciate that changing your mind is not a sign of weakness but of strength; to be open to new ideas, however surprising — perseverance in business is critical; stubbornness is deadly.  How does the old saying go?  The definition of Insanity is doing the same thing over and over again but expecting different results.  If the only thing we were still doing at Return Path is ECOA, we’d be long gone by now, or at least MUCH smaller than we are today.

I don’t know too many entrepreneurs that don’t espouse most of the above principles.  The trick is to build an entire company of people that do.

Book Shorts:  Sales, Sales, Sales, Sales, Sales

Jeffrey Gitomer’s Little Red Book of Selling and Little Red Book of Sales Answers were great refreshers in sales basics for you as CEO (and head of sales, and sales manager, and sales rep).  The books were a bit “self-help” flavor for my taste as a reader, but they were excellent on content, and I have two long pages of notes of “back to basics” items I need to remind myself and my team about.

Anyone at Return Path in sales/account-project management/marketing — your copy is on the way, hopefully by way of a barter I proposed with the author (sorry, Stephanie and Tami…), but in any case, we’ll buy them.  Anyone else who is interested at RP, let me know, and the copy is on me.

Some of the most critical reminders — although you have to read the books to get to get the color:

– Ask questions, don’t talk talk talk at prospects (just like the SPIN Selling methodology we always train with at Return Path)

– Never say “tell me a little bit about your business” — do the research first

– Importance of testimonials in selling

– Never blame others or blame circumstances when things go wrong.  Take control and solve the problem (good for sales and for everyone!)

Less is More

I have a challenge for the email marketing community in 2009. Let’s make this the Year of “Less is More.”

Marketers are turning to email more and more in this down economy. There’s no question about that. My great fear is that just means they’re sending more and more and more emails out without being smart about their programs. That will have positive short term effects and drive revenues, but long term it will have a negative long term impact on inboxes everywhere. And these same marketers will find their short term positive results turning into poor deliverability faster than you can say “complaint rate spike.”

I heard a wonderful case study this week from Chip House at ExactTarget at the EEC Conference. One of his clients, a non-profit, took the bold and yet painful step of permissioning an opt-out list. Yikes. That word sends shivers down the spine of marketers everywhere. What are you saying? You want me to reduce the size of my prime asset? The results of a campaign done before and after the permission pass are very telling and should be a lesson to all of us. The list shrank from 34,000 to 4,500. Bounce rate decreased from 9% to under 1%. Spam complaints went from 27 to 0 (ZERO). Open rate spiked from 25% to 53%. Click-through from 7% to 22%. And clicks? 509 before the permissioning, 510 after. This client generated the same results, with better metrics along the way, by sending out 87% LESS EMAIL. Why? Because they only sent it to people who cared to receive it.

This is a great time for email. But marketers will kill the channel by just dumping more and more and more volume into it. Let’s all make Less Is More our mantra for the year together. Is everyone in? Repeat after me…Less Is More! Less Is More!

I’ve written a lot over the years about Return Path’s Core Values (summary post with lots of links to other posts here).  And I’ve also written and believe strongly that there’s a big difference between values, which are pretty unchanging, and culture, which can evolve a lot over time.  But I had a couple conversations recently that led me to think more philosophically about a company’s values.

The first conversation was at a recent dinner for a group of us working on fundraising for my upcoming 25th reunion from Princeton.  Our guest speaker was a fellow alumnus who I’ve gotten to know and respect tremendously over the years as one of the school’s most senior and influential volunteer leaders.  He was speaking about the touchstones in his life and in all people’s lives — things like their families, their faith, the causes they’re passionate about, and the institutions they’ve been a part of.  I remember this speaker giving a similar set of remarks right after the financial crisis hit in early 2009.  And it got me thinking about the origins of Return Path’s values, which I didn’t create on my own, but which I obviously had a tremendous amount of influence over as founder.  Where did they come from?  Certainly, some came from my parents and grandparents.  Some came from my primary and secondary education and teachers.  Some came from other influences like coaches, mentors, and favorite books.  Although I’m not overly observant, some certainly came from Hebrew school and even more so from a deep reading of the Bible that I undertook about 15 years ago for fun (it was much more fun than I expected!).  Some came from other professional experiences before I started Return Path.  But many of them either came from, or were strongly reinforced by my experience at Princeton.  Of the 15 values we currently articulate, I can directly tie at least seven to Princeton:  helpful, thankful, data-driven, collaborative, results-oriented, people first, and equal in opportunity.  I can also tie some other principles that aren’t stated values at Return Path, but which are clearly part of our culture, such as intellectually curious, appreciative of other people’s points of view, and valuing an interdisciplinary approach to work.

As part of my professional Reboot project, this was a good reminder of some of the values I know I’ve gotten from my college experience as a student and as an alumni, which was helpful both to reinforce their importance in my mind but also to remember some of the specifics around their origins – when and why they became important to me.  I could make a similar list and trade and antecedents of all or at least most of our Company’s values back to one of those primary influences in my life.  Part of Reboot will be thinking through all of these and renewing and refreshing their importance to me.

The second conversation was with a former employee who has gone on to lead another organization.  It led me to the observation I’ve never really thought through before, that as a company, we ourselves have become one of those institutions that imprints its values into the minds of at least some of its employees…and that those values will continue to be perpetuated, incorporated, and improved upon over time in any organization that our employees go on to join, manage part of, or lead.

That’s a powerful construct to keep in mind if you’re a new CEO working on designing and articulating your company’s values for the first time.  You’re not just creating a framework to guide your own organization.  You’re creating the beginning of a legacy that could potentially influence hundreds or thousands of other organizations in the future.

Learn Word of Mouth Marketing

Our friend, former RP colleague, and WOM guru Andy Sernovitz is hosting a small-group word of mouth marketing seminar. Usually he only does private training for companies at a very large price, so this is a rare chance for 50 people to get the best introduction to word of mouth that there is.  I blogged about his book a while back here.

We’ve arranged for a $250 discount for our clients. Use code “welovereturnpath” when you register (kind of catchy code, isn’t it?).

This is a very practical, hands-on course. In one intense day, you will:

• Master the five steps of word      of mouth marketing
• Construct an action plan that      your company can start using the very next day
• Get the same training that      big corporations (Microsoft, TiVo, eBay) have received — for a fraction      of what they paid
• Know how to translate word of      mouth marketing into real ROI
• Participate in an active,      intense day of practical brainstorming (not boring theory)
• Learn from Andy Sernovitz,      the guy who literally wrote the book on word of mouth marketing

Andy promises you will learn a repeatable, proven marketing framework that is easy to execute, affordable, and provides measurable results within 60 days.

More information: http://events.gaspedal.com

Chicago: July 30 and September 4

Pass it on: http://events.gaspedal.com/banners

Book Short:  Vive La Difference

Brain Sex, by Anne Moir and David Jessell, was a fascinating read that I finished recently.  I will caveat this post up front that the book was published in 1989, so one thing I’m not sure of is whether there’s been more recent research that contradicts any of the book’s conclusions.  I will also caveat that this is a complex topic with many different schools of thought based on varying research, and this book short should serve as a starting point for a dialog, not an end point.

That said, the book was a very interesting read about how our brains develop (a lot happens in utero), and about how men’s and women’s brains are hard wired differently as a result.  Here are a few excerpts from the book that pretty much sum it up (more on the applied side than the theoretical):

• Men tend to be preoccupied with things, theories, and power…women tend to be more concerned with people, morality, and relationships
• Women continue to perceive the world in interpersonal terms and personalize the objective world in a way men do not.  Notwithstanding occupational achievements, they tend to esteem themselves only insofar as they are esteemed by those they love and respect.  By contrast, the bias of the adult male brain expresses itself in high motivation, competition, single-mindedness, risk-taking, aggression, preoccupation with dominance, hierarchy, and the politics of power, the constant measurement and competition of success itself, the paramountcy of winning
• Women will be more sensitive than men to sound, smell, taste, and touch.  Women pick up nuances of voice and music more readily, and girls acquire the skills of language, fluency, and memory earlier than boys.  Females are more sensitive to the social and personal context, are more adept at tuning to peripheral information contained in expression and gesture, and process sensory and verbal information faster.  They are less rule-bound than men
• Men are better at the kills that require spatial ability.  They are more aggressive, competitive, and self-assertive.  They need the hierarchy and the rules, for without them they would be unable to tell if they were top or not – and that is of vital importance to most men

As I said up front, this book, and by extension this post, runs the risk of overgeneralizing a complex question.  There are clearly many women who are more competitive than men and outpace them at jobs requiring spatial skills, and men who are language rock stars and quite perceptive.

But what I found most interesting as a conclusion from the book is the notion that there are elements of our brains are hard wired differently, usually along gender lines as a result of hormones developed and present when we are in utero.  The authors’ conclusion — and one that I share as it’s applied to life in general and the workplace in particular — is that people should “celebrate the difference” and learn how to harness its power rather than ignore or fight it.

Thanks to David Sieh, our VP Engineering, for giving me this book.

Why Publishing Will Never Be the Same, Part II

In Part I of this series, I talked about our experience at Return Path publishing a book back in January through a new type of print-on-demand, or self-publishing house called iUniverse and why I thought the publishing industry was in for a long, slow decline unless it changes its ways.

We had another interesting experience with iUniverse more recently that reinforces this point.  It turns out, although iUniverse is mainly a “self publisher,” they also have a traditional publishing model called their Star Program, which includes an editorial review process.  The good news for us is that they contacted us and said they liked our book so much, and sales are strong enough, that they’ve given it an Editors’ Choice and Readers’ Choice notation and they want to put it in the Star Program.  That was very exciting!  I mean, who doesn’t want to be a star?  The bad news is that the traditional model isn’t particularly compelling.  This is the deal they’ve offered:

– A 3-year exclusive for them (our current contract is non-exclusive)

– Diminished control over the IP

– Diminished royalties

– iUniverse would re-publish the book, which means (a) it would become unavailable for 6 months before the re-launch, (b) they would give it a new cover and re-edit the book, (c) we could revise the content if we want, and (d) they’d have control over all final decisions around the editorial and cover

– iUniverse would do more active marketing of the book

Ok, so this could be a compelling deal, if the “more active marketing” was really going to move the needle for us.  So we asked more about what that gets us.  The answer:

– Sending the book out for reviews (we did this within our industry but certainly not by broader business press, although we probably could do so on our own)

– Setting up book signing events (hard to imagine this is interesting for a business how-to book like this)

– Setting up interview or radio appearances (again, we did this in-industry but not broader)

– Introducing us to the buyer from Barnes & Noble retail stores (success rate unknown – too early to tell in the program’s life)

The folks at iUniverse had no idea what we could even project in terms of increased sales from these activities.  When we pushed on this a little bit more on the tangible benefits of marketing, their end comment was “the most successful books are the ones where the authors are out actively promoting them.”

We haven’t made a decision on this one yet.  Their support is probably valuable on balance, the change in royalty structure isn’t material, and assuming we could carve out the IP issues to our satisfaction, it could be a good way to issue a second edition with less cost.  The in-store presence is really the wild card that could really tip the scales.

But the lure of legitimacy (e.g., someone else published it with an editorial review process, we didn’t just pay to play) is the biggest thing in iUniverse’s favor on this one, and that’s what I have to imagine will decrease over time for the publishing industry as it becomes easier and easier for individuals to publish content, market it, and establish credibility by having other individuals rate and review it.

Thanks to my colleague Tami Forman for her assistance on these postings (and for managing the book project!).  Tami is too modest to tell anyone, but she is a wonderful writer and has a blog that she updates not nearly often enough on food — she used to be the food editor for iVillage.

My long-time friend and former Board member Brad Feld has become a prolific writer on the startup world over the years and is the person (other than me) most responsible for me getting into that scene as well. Startup CEO is part of his Startup Revolution series, which followed me writing an essay for Do More Faster, and then writing a series of sidebars call “The Entrepreneur’s Perspective” in Venture Deals.

All Brad’s books are listed here. If you’re in the startup universe, I’d encourage you to read all of them. I’m excited to dive into his newest book, The Startup Community Way, which comes out this week from our same publisher, John Wiley & Sons. I’ve gotten part of the way through an early copy, and I love it already.

The approach Brad and his co-author Ian Hathaway take is to evolve their Boulder Thesis from the original Startup Communities book. They dive into the topic and examine it from the perspective of a complex system, which of course anything as fragmented as an ecosystem of public, private, and academic organizations is.

The book — and the whole topic, quite frankly — remind me of a great management book I read several years ago by General Stanley McChrystal called Team of Teams. Organizations have gotten more complex and have had to adapt their structures, and the most successful ones are the ones that have shifted from hierarchical structures to node-based structures, or teams of teams, where individual, agile teams operate with loose points of connection to other teams that focus on dependencies and outcomes.

In the same way, startup communities and the broader ecosystems that touch them have changed and adapted, and the successful ones have learned how to stay loosely connected to other startup communities, prioritize collaboration, and remain focused on inclusion and entrepreneurial leadership.

Why Publishing Will Never Be the Same, Part I

As you may know, we published a book earlier this year at Return Path called Sign Me Up! Sales are going quite well, in case you’re wondering, and we also launched the book’s official web site, where you can subscribe to our “email best practices” newsletter.

The process of publishing the book was fascinating and convinced me that publishing will never be the same.  Even in two parts, this will be a long post, so apologies in advance. Front to back, the process went something like this:

– We wrote the content and selected and prepared the graphics

– We hired iUniverse to publish the book for a rough total cost of $1,500

– iUniverse provided copy editing, layout, and cover design services

– Within 8 weeks, iUniverse put the book on Amazon.com and BN.com for us (in addition to their site) and properly indexed it for search, and poof — we were in business

– Any time someone places an order on any of those three sites, iUniverse prints a copy on demand, binds it, and ships it off. No fuss, no muss, no inventory, but a slightly higher unit cost than you’d get from a traditional publisher who mass prints. We receive approximately 20% of the revenue from the book sale, and iUniverse receives 80%.  I’m not sure what cut they give Amazon, but it’s hard to imagine it’s more than 10-20% of the gross

Other than the writing part (not to be minimized), how easy is that?  So of course, that made me think about the poor, poor publishing industry. It seems to me that, like many other industries, technology is revolutionizing publishing.  Here’s how:

– Publishers handle printing and inventory.  iUniverse and its competitors can do it for you in a significantly more economic way.  Print on Demand will soon be de rigeur.

– Publishers handle marketing and distribution.  iUniverse gets you on Amazon.com and BN.com for free.  Amazon.com and BN.com now represent something like 12% of all book sales (cobbled together stats from iMedia Connection saying the annual online book sale run rate is now about $3 billion and the Association of American Publishers saying that the total size of the industry is $24 billion).  Google and Overture take credit cards and about 5 minutes to drive people to buy your book online.  Buzz and viral and email marketing techniques are easy and cheap.

– Publishers pay you.  Ok, this is compelling, but they only pay you (especially advances) if you’re really, really good, or a recognized author or expert. iUniverse pays as well, just in a pay-for-performance model.  Bonus points for setting yourself up as an affiliate on Amazon and BN to make even more money on the sale.  iUniverse actually pays a higher royalty (20% vs. 7.5-15% in the traditional model), so you’re probably always a fixed amount “behind” in the self-publish model, but you don’t have an agent to pay.

Unless you are dying to be accepted into literary or academic circles that require Someone & Sons to annoint you…why bother with a traditional publisher? As long as you have the up-front money and the belief that you’ll sell enough books to cover your expenses and then some, do it yourself.

In Part II, I will talk about how iUniverse pitches a “traditional publishing model” and why it only reinforces the point that the traditional model doesn’t make a lot of sense any more in many cases.

How to Get Laid Off – an Employee’s Perspective

One of my colleagues at Return Path  saw my post about How to Quit Your Job about 5 years ago and was inspired to share this story with me.  Don’t read anything into this post, team!  There is no other meaning behind my posting it at this time, or any time, other than thinking it’s a very good way of approaching a very difficult situation, especially coming from an employee.

In 2009 I was working at a software security start up in the Silicon Valley.  Times were exceedingly tough, there were several rounds of layoffs that year, and in May I was finally on the list. I was informed on a Tuesday that my last day was that Friday.  It was a horrible time to be without a job (and benefits), there was almost no hiring at all that year, one of the worst economic down turns on record.  While it was a hard message,  I knew that it was not personal, I was just caught up on a bad math problem.

After calling home to share the bad news, I went back to my desk and kept working. I had never been laid off and was not sure what to do, but I was pretty sure I would have plenty of free time in the short term, so I set about figuring out  how to wrap things up there.  Later that day the founder of the company came by, asked why I had not gone home, and I replied that I would be fine with working till the end of the week if he was okay with it.  He thanked me.

Later that week, in a meeting where we reviewed and prioritized the projects I was working on, we discussed who would take on the top three that were quite important to the future of the company.  A few names were mentioned of who could keep them alive, but they were people who I knew would not focus on them at all.  So I suggested they have me continue to work on them, that got an funny look but when he thought about it , it made sense, they could 1099 me one day a week.  The next day we set it up.  I made more money than I could of on unemployment, but even better I kept my laptop and work email, so I looked employed which paid off later. 

That one day later became two days and then three, however, I eventually found other full time work in 2010.  Layoffs are hard,  but it is not a time to burn bridges.   In fact  one of the execs of that company is a reference and has offered me other opportunities for employment.