Book Short:  Internet True Crime

Fatal System Error: The Hunt for the New Crime Lords Who Are Bringing Down the Internet, by Joseph Menn (book, kindle) was a bit of a disappointment.  I was really hoping for more of an explanation of how the “business” of Internet crime works — what the economics are like, what the landscape/scope/sectors are like, who the players are.

What I got was a bit of a true crime novel, the story of Barrett Lyon and Andy Crocker, who are respectively a geek and a cop, and their very specific stories of tracking down a handful of internet criminals around a handful of technical tactics (DDOS attacks and botnets).  It wasn’t bad, the stories were ok and occasionally entertaining, but it was very narrow.

It felt to me like there is a much more interesting story to tell around criminals who USE the Internet to commit crimes as opposed to people attacking the infrastructure.  Has anyone ever run across a book like that?

I Don’t Want to Be Your Friend (Today)

The biggest problem with all the social networks, as far as I can tell, is that there’s no easy and obvious way for me to differentiate the people to whom I am connected either by type of person or by how closely connected we are.

I have about 400 on Facebook and 600 on LinkedIn.  And I’m still adding ones as new people get on the two networks for the first time.  While it seems to people in the industry here that “everyone is on Facebook,” it’s not true yet.  Facebook is making its way slowly (in Geoffrey Moore terms) through Main Street.  Main Street is a big place.

But not all friends are created equal.  There are some where I’m happy to read their status updates or get invited to their events.  There are some where I’m happy if they see pictures of me.  But there are others where neither of these is the case.  Why can’t I let only those friends who I tag as “summer camp” see pictures of me that are tagged as being from summer camp?  Why can’t I only get event invitations from “close friends”?  Wouldn’t LinkedIn be better if it only allowed second and third degree connections to come from “strong” connections instead of “weak” ones?

It’s also hard to not accept a connection from someone you know.  Here’s a great example.  A guy to whom I have a very tenuous business connection (but a real one) friends me on Facebook.  I ignore him.  He does it again.  I ignore him again.  And a third time.  Finally, he emails me with some quasi-legitimate business purpose and asks why I’m ignoring him — he sees that I’m active on Facebook, so I *must* be ignoring him.  Sigh.  I make up some feeble excuse and go accept his connection.  Next thing I know, I’m getting an invitation from this guy for “International Hug a Jew Day,” followed by an onslaught of messages from everyone else in his address book in some kind of reply-to-all functionality.  Now, I’m a Jew, and I don’t mind a hug now and then, but this crap, I could do without. 

I mentioned this problem to a friend the other day who told me the problem was me.  “You just have too many friends.  I reject everyone who connects to me unless they’re a really, super close friend.”  Ok, fine, I am a connector, but I don’t need a web site to help me stay connected to the 13 people I talk to on the phone or see in person.  The beauty of social networks is to enable some level of communication with a much broader universe — including on some occasions people I don’t know at all.  That communication, and the occasional serendipity that accompanies it, goes away if I keep my circle of friends narrow.  In fact, I do discriminate at some level in terms of who I accept connections from.  I don’t accept them from people I truly don’t know, which isn’t a small number.  It’s amazing how many people try to connect to me who I have never met or maybe who picked up my business card somewhere.

The tools to handle this today are crude and only around the edges.  I can ignore people or block them, but that means I never get to see what they’re up to (and vice versa).  That eliminates the serendipity factor as well.  Facebook has some functionality to let me “see more from some people and less from others” — but it’s hard to find, it’s unclear how it works, and it’s incredibly difficult to use.  Sure, I can “never accept event invitations from this person,” or hide someone’s updates on home page, but those tools are clunky and reactive.

When are the folks at LinkedIn and Facebook going to solve this?  Feels like tagging, basic behavioral analysis, and checkboxes at point of “friending” aren’t exactly bleeding edge technologies any more.

It’s Copyright Time

Brad must be off his game this year, so…time to update all those copyrights to say 2008.  Or as Brad gently suggested last year, make that field variable so you never have to worry about it again!  (Thanks to our CTO Andy Sautins for the reminder here.)

Startup CEO (OnlyOnce- the book!), Part IV – Book Launches Today!

My book is officially on sale on Amazon and iTunes today.  The full detailed outline is here if you’re interested, and the link to buy it is here.

This is very exciting.  I had been saying for a while that I had no idea whether 50 people would buy it or 5,000, but the publisher (Wiley) tells me we had over 2,000 pre-orders, so that’s a great start, at least.

So thanks to those 2,000 brave souls, and anyone else who buys it as well.  I hope you enjoy it and look forward to your feedback directly, via OnlyOnce, via the #StartupCEO hashtag, via a rating/review on Amazon, or via the Startup Revolution web site.

I hope to get back to more regular blogging soon.  As you hay have noted, I’ve been more quiet than usual the last six months while writing the book.  But I have lots of great posts stored up…

This was a catchy title I caught in our shared Kindle library at a moment when I wasn’t connected to wifi and had nothing to read. Thanks to Mariquita for buying it…it was a good read.

The book is funny, irreverent, and deep. It speaks a lot about pain and failure and how those can help create resilience. It is also chock full of great anecdotes including a particularly memorable one about Pete Best, the original drummer for the Beatles who got fired by the rest of the band on the eve of their becoming famous.

Here’s one particularly representative quote:

Pain is an inextricable thread in the fabric of life, and to tear it out is not only impossible, but destructive: attempting to tear it out unravels everything else with it. To try to avoid pain is to give too many fucks about pain. In contrast, if you’re able to not give a fuck about the pain, you become unstoppable.

Every founder would benefit from reading this book. It won’t stop you from giving a f*ck about everything (it can’t), but it might give you a couple tools for not giving a f*ck about some things, which would clear up some mental capacity for other more important things!

What Makes an Awesome Board Member

(This post was requested by my long-time Board member Brad Feld and is also running concurrently on his blog today)

I’ve written a bunch of posts over the years about how I manage my Board at Return Path.  And I think part of having awesome Board members is managing them well – giving transparent information, well organized, with enough lead time before a meeting; running great and engaging meetings; mixing social time with business time; and being a Board member yourself at some other organization so you see the other side of the equation.  All those topics are covered in more detail in the following posts:  Why I Love My Board, Part II, The Good, The Board, and The Ugly, and Powerpointless.

But by far the best way to make sure you have an awesome board is to start by having awesome Board members.  I’ve had about 15 Board members over the years, some far better than others.  Here are my top 5 things that make an awesome Board member, and my interview/vetting process for Board members.

Top 5 things that make an awesome Board member:

• They are prepared and keep commitments.  They show up to all meetings.  They show up on time and don’t leave early.  They do their homework.  The are fully present and don’t do email during meetings
• They speak their minds.  They have no fear of bringing up an uncomfortable topic during a meeting, even if it impacts someone in the room.  They do not come up to you after a meeting and tell you what they really think.  I had a Board member once tell my entire management team that he thought I needed to be better at firing executives more quickly!
• They build independent relationships.  They get to know each other and see each other outside of your meetings.  They get to know inviduals on your management team and talk to them on occasion as well.  None of this communication goes through you
• They are resource rich.  I’ve had some directors who are one-trick or two-trick ponies with their advice.  After their third or fourth meeting, they have nothing new to add.  Board members should be able to pull from years of experience and adapt that experience to your situations on a flexible and dynamic basis
• They are strategically engaged but operationally distant.   This may vary by stage of company and the needs of your own team, but I find that even Board members who are talented operators have a hard time parachuting into any given situation and being super useful.  Getting their operational help requires a lot of regular engagement on a specific issue or area.  But they must be strategically engaged and understand the fundamental dynamics and drivers of your business – economics, competition, ecosystem, and the like

My interview/vetting process for Board members:

• Take the process as seriously as you take building your executive team – both in terms of your time and in terms of how you think about the overall composition of the Board, not just a given Board member
• Source broadly, get a lot of referrals from disparate sources, reach high
• Interview many people, always face to face and usually multiple times for finalists.  Also for finalists, have a few other Board members conduct interviews as well
• Check references thoroughly and across a few different vectors
• Have a finalist or two attend a Board meeting so you and they can examine the fit firsthand.  Give the prospective Board member extra time to read materials and offer your time to answer questions before the meeting.  You’ll get a good first-hand sense of a lot of the above Top 5 items this way
• Have no fear of rejecting them.  Even if you like them.  Even if they are a stretch and someone you consider to be a business hero or mentor.  Even after you’ve already put them on the Board (and yes, even if they’re a VC).  This is your inner circle, and getting this group right is one of the most important things you can do for your company

I asked my exec team for their own take on what makes an awesome Board member.  Here are some quick snippets from them where they didn’t overlap with mine (with only two inside jokes that I couldn’t resist putting up for the Board):

• Ethical and high integrity in their own jobs and lives
• Comes with an opinion
• Thinking about what will happen next in the business and getting management to think ahead
• Call out your blind spots
• Remembering to thank you and calling out what’s right
• Role modeling for your expectations of your own management team – Do your prep, show up, be fully engaged, be brilliant/transparent/critical/constructive and creative.  Then get out of our way
• Offer tough love…Unfettered, constructive guidance – not just what we want to hear
• Pattern matching:  they have an ability to map a situation we have to a problem/solution at other companies that they’ve been involved in – we learn from their experience…but ability and willingness to do more than just pattern matching.  To really get into the essence of the issues and help give strategic guidance and suggestions
• Ability to down 2 Shake Shack milkshakes in one sitting
• Colorful and unique metaphors

Disclaimer – I run a private company.  While I’m sure a lot of these things are true for other types of organizations (public companies, non-profits, associations, etc.), the answers may vary.  And even within the realm of private companies, you need to have a Board that fits your style as a CEO and your company’s culture.  That said, the formula above has worked well for me, and if nothing else, is somewhat time tested at this point!

From Blog to Book – Beyond Bullets

Hats off to fellow blogger Cliff Atkinson, who has just published a book called Beyond Bullet Points.  Cliff and his company, Sociable Media, consult on PowerPoint and presentations and have a great theory about how to do great presentations.

They follow the “clear, simple, and please God not so boring” guidelines espoused by a number of us in the business world, including Brad and of course Seth.  (BTW, if you haven’t read Seth’s e-book/treatise on Really Bad PowerPoint, you should do that as well, although I can’t find a link to it at the moment.)

One of the coolest parts of the book is that it really started out as Cliff’s blog, Beyond Bullets, then got Microsoft’s attention, then became a book.  What a great demonstration of old and new media reinforcing each other!

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.

I was trading emails a few weeks ago Elliot Noss from Tucows about the current state of the economy after being on a panel together about it, and he wrote:

The market is fascinating right now. Heated competition AND layoffs and hiring freezes. It feel like an old European hotel where there are two faucets, one is too hot and the other too cold.

While a quick rant about European hotel bathrooms could be fun…we’ll just stick to the sink analogy. As anyone who has ever tried to use one of these sinks that Elliot describes knows, they’re hard to use and illogical. Sure, sometimes you want freezing water and sometimes you want scalding water (I guess), but often, you want something in between. And the only way to achieve that is to turn on both freezing and scalding at the same time? That’s weird.

Then I was on another email thread recently with a group of CEOs, when John Henry from Ride With Loop said this:

Whatever the climate, we all surely agree there is no bad time to build a good business.

How true that is!

But here’s the worrisome part. It’s impossible to predict what’s going to happen next. We are in uncharted territory here with a land war in Europe, a partial global oil embargo of a top tier oil producer, a pandemic, supply chain problems, etc. etc. There are days and circumstances where everything feels normal. Plenty of businesses, especially in the tech sector, are kicking ass. And yet there are days and circumstances that feel like 2001 or 2009. It’s tough to navigate as a startup CEO. Yes, it’s obvious you should try to have a couple years of cash on hand, and that you should be smart about investments and not get too far ahead of revenue if you’re in certain sectors (presumably if you’re in an R&D intensive field and weren’t planning to have revenue for years on end, life isn’t all that different?). But beyond that, there’s no clear playbook.

And that’s where the worrisome line comes in. I saw Larry Summers on Meet the Press last weekend, who predicted that

a recession would come in late 2023.

Wait, what? Aren’t things messed up now? Yes, inflation is high, the stock market is down, and interest rates are creeping up. But the economy is still GROWING. Unemployment is still LOW. Summers’ point is a reminder that contraction is likely, but it may still be a ways off, it depends how the Fed handles interest rate hikes (and about a zillion other things), and it’s impossible to predict. That was more worrisome to me. If we’re navigating choppy waters now, it may not just be for a couple of quarters. It may be that 4-6 quarters from now, we are in for 2-3 quarters of contraction. That is a more than most companies are able to plan for from a cash perspective.

Frothy macro environments lead to bad businesses getting created, too many lookalike businesses popping up, or weak teams getting funded. When the tide goes out, as they say, you can see who is swimming naked. But if you’re building a good business, one that has staying power and a clear value proposition, with real people or clients paying real money for a real product or service, and if you’re serious about building a good company, keep on keeping on. Be smart about key decisions, especially investment decisions, but don’t despair or give up.

We’ll all get through this.

Fred, Brad, and Jerry have done a bunch of postings recently, and threaten to do more, sharing the VC perspective on many aspects of startups and entrepreneurship. I thought it might be interesting to share the entrepreneur’s perspective on the same subjects. I’ll try to cross-post and keep pace, but I’m already a couple behind, and I can’t crank out postings as fast as these guys can! (For reference, Fred and Brad are on my board, and Jerry as Fred’s partner is an advisor to my company, Return Path.)

Topic 1: Boards of Directors. All three have many good points. Brad says that boards come in three flavors (working, reporting, and lame duck), and that small companies need working boards which include other entrepreneurs in the industry as well as management and investors. He also advises to take good care of directors and not let them get bored. Fred calls the good ones engaged boards (interactive, candid, engaged, passionate, and involved) and says that while you can have a good company without an engaged board and even with a bored bored on occasion, to have a great business you need an engaged board. Finally, Jerry says that you should pick your board carefully and build it with some diversity like you would a management team and to avoid people who will yes you.

I basically agree with all of these points, and would add the following four thoughts for entrepreneurs:

1. Building a board can be one of a CEO’s greatest trump cards. Without being even a little bit disingenuous, you can use the “I’m the CEO and would like to talk to you about a potential board seat with my company” as an entree to meet face to face with some of the most interesting, senior, brand-name people in your industry (turns out, flattery will occasionally get you somewhere). Use this card wisely and sparingly, and always be prepared to follow up on your meetings, but take full advantage of it as a way to network. You never know what opportunities you’ll uncover along the way.

2. Don’t think of managing your Board as a burden. Communicate early and often to your Board members and make sure all big conversations and debates are pre-wired in one-to-one conversations before Board meetings, and that debates are framed and researched properly in advance of meetings. Nail the basics (reporting, financial reviews, well-crafted and easy-to-read materials sent out several days before the meeting), so you can focus the valuable meeting time on strategy, not on the minutiae.

3. Figure out how to work differently with investor directors and outside directors. VCs who sit on your board have very different interests, time availability, and things to contribute than outside directors, especially non-retired industry executives. Not all directors are created equally, and you don’t have to behave as if they are.

4. Sit on a board yourself. There’s nothing like a real-live counterpoint to make you take a step back and think about how to build and run an effective board. Find something — another startup, a nonprofit, your high school or college alumni association — to join as a board member. Watch and learn.

All that said, the most important thing I’ve found in running a board is following Brad, Jerry, and Fred’s collective wisdom about fostering an engaged/working board. Definitely don’t let them get bored on you!

(This is the sixth post in a series documenting the work I did in Colorado on the Governor’s COVID-19 Innovation Response Team – IRT.  Other posts in order are 1, 2, 3, 4, and 5.)

As these posts have been running, a few people have asked me to quickly compare this experience to the experience of being a Startup CEO.  And that’s an interesting way to think about it. In a lot of ways, the couple of weeks of getting the IRT up and running felt like starting up a new business, only a lot more intense.  Following the outline of sections in Startup CEO:  a field guide to scaling up your business…

Part One: Storytelling.  The whole timeframe was super compressed.  It took us 2 days to be able to spend 4 hours writing our initial pitch deck defining scope, structure, and staffing request – and that was while we were working hard on our first two workstreams.  In a startup environment, that process would have taken much longer, involved more customer discovery and product/market fit research and spending 100% of our time on that. But then we got our “approval and funding” in about 45 minutes – that would have taken weeks and involved dozens of pitch meetings.  In terms of creating the organization’s Mission, Vision, and Values, we didn’t even bother, although I think it helped that the three of us were generally on the same page with how to work and that urgency was the essence of our job. The larger emergency operations team that we were more or less embedded in also had a very clear set of values and operating principles on display…although we didn’t actually go read them, I think they were in sync with our view of our team’s mission and principles.  In terms of “bringing our story to life,” that was wholly unnecessary!

Part Two: Building The Company’s Human Capital.  Like a startup, getting it right with the first handful of employees means everything.  In this case, the first two deputies on the team, handpicked by the Governor’s staff, were awesome and critical.  Bringing someone in from the private sector to run a public sector team only works when the rest of the team is incredibly knowledgeable about how the machinery of state government works.  And in the end, I think Sarah will be a better leader for the team than I was because she had a combination of private and public sector experience (and within her public sector experience, she had a lot of emergency response experience).  In general, the recruiting process was soooo different than private sector and public sector normally are. The first two team members handpicked the best people they knew in other relevant parts of the government. People were brought onto the team after one short phone call.  Other state departments heads loaned their people willingly. No such thing as a comp negotiation or a reference check. There were a bunch of other things under the “Human Capital” heading that are interesting notes/comparables as well. First, feedback in a compressed-timeframe emergency is something that you absolutely can’t skip – and you can’t wait for a formal process either.  Our team was pretty good about giving feedback at least daily in a semi-structured way as well as in the moment. We didn’t really have time to get into things like career pathing and compensation and firing. We did, after about 6 days at the suggestion of Kacey, our Chief of Staff, move the team to almost entirely remote (other than leadership and occasional critical meetings). This worked surprisingly well for a workforce probably unaccustomed to remote work.  The rest of the world is also learning how to do a lot of that now, too.

Part Three: Execution.  This whole experience was 97% execution.  In fact, we had a hard time finding time for things like strategy and planning because there was a crushing amount of work to do (welcome to emergency response), and a small team to do it.  We didn’t have to worry about raising money, budgeting, forecasting, reporting, and some of the other major execution steps in the private sector. We did do a good job of creating goals and milestones for our workstreams, but even that took a couple of weeks, and in retrospect, I wish we’d been able to do some of those sooner.  In terms of how our work got done, we were very conscious of creating daily meeting routines to structure our day and work – but there was no such thing as even a weekly meeting (let alone monthly strategics or quarterly offsites!), only daily meetings, multiple times per day. One thing that was interesting – I talk in the book about being deliberate and consistent with your platforms, especially around communication.  Channel proliferation is a real issue today (much more so than when I wrote the book), but we had an interesting mismatch at the beginning. The public sector team was used to email, text, and Google hangouts for comms. Nothing else. The private sector team used those things but was a lot more comfortable with Trello, Zoom, and Slack. Thank goodness both teams used G-Suite and not a mix of that and LiveOffice. But getting everyone on the team to converge on a couple systems is a work in progress and was messy, as evidenced in this great moment where Kacey was holding a laptop up to an actual whiteboard to show one of our private sector teams how she was thinking about something. 

Part Four: Building and Leading a Board of Directors.  This is kind of N/A, although the proxy for it in our case on the IRT was the leadership structure of the Emergency Operations Center and then the Governor and the part of his cabinet that was keyed into the emergency response.  In this regard, the main differences between the private sector and public sector were speed/formality (no room for formality when you’re meeting daily or at a moment’s notice!), and, interesting, the need for integration. A company reports to its board on how it’s doing.  This team had to use its “board” to make sure it was integrating with other state agencies and initiatives. In this way, the team functioned more like a business unit within a company than an actual company.

Part Five: Managing Yourself So You can Manage Others.  This was obviously critical…and obviously quite difficult.  And within the overall Emergency Operations Center (outside of our team, the real emergency professionals), there were people, including leaders, who were working 7 days/week for multiple weeks on end, and long days, too.  At one point, the EOC leader posted this note on the wall, and he frequently took time in daily briefings to encourage everyone to take a day or two off and take care of themselves physically.  He role-modeled that behavior as well. You can only run a sprint for so long. Once it becomes clear it’s a marathon, well, you know.

Stay tuned for the final post in the series tomorrow…