A Lighter, Yet Darker, Note

I’ve been meaning to post about this for some time now since my colleague Tami Forman introduced me to this company.  It’s a riot.

You know all those well-intentioned, but slightly cheesy motivational posters you see in places like dentists’ offices?  The kind that talk about “Perseverence” and “Commitment” and “Dare to Dream” and have some beautiful or unique, usually nature-centric image to go with them and their tag line?

For the sarcastic among us, you must visit Despair, Inc.’s web site, in particular any of the “Individual Designs” sections featured on the left side navigation.  The posters are brilliant spoofs on the above, with such gems as “Agony” and “Strife” and “Despair” (whose tag line is “It’s always darkest just before it goes pitch black”).  E.L. Kersten is one funny, albeit strange dude.

Worth a look, and everything is for sale there, too, in case you need to have these posted in a back room somewhere.

I love me a good framework. And Geoffrey Moore is the kind of good product/marketing frameworks for technology companies. Moore’s Zone to Win: Organizing to Compete in an Age of Disruption is a must-read for anyone managing a larger technology organization (start reading it when you get to 200-250 people – it’s never too early to worry about disruption). More important, it’s really a companion book or coda to Escape Velocity: Free Your Company’s Future from the Pull of the Past, so if you haven’t read that one, start there and read both sequentially. Zone to Win is quite short and punchy, and it doesn’t disappoint.

I can’t believe is that I never blogged about Escape Velocity before since it was a very influential book in how we managed a bunch of things at Return Path in the later years when we got larger and were more in “disrupt or be disrupted” mode. I’ll start with the essence of that book before I move onto Zone to Win. Escape Velocity‘s principal framework is to divide the different product lines/lines of business you have into three planning horizons:

• Horizon 1 (H1): Current businesses that should be profitable and sustainable
• Horizon 3 (H3): Nascent R&D efforts with the potential to be disruptors or game changers
• Horizon 2 (H2): The bridge between H1 and H3 where an R&D effort that is taking off is scaled and hopefully achieves the eponymous Escape Velocity

The essence of the book is to talk about how larger companies become completely slavish to H1 businesses, their cash cows, and struggle to escape from their pull, whether that’s internal resource allocation or customer-driven demands. Failure to innovate properly beyond H1 businesses is why companies die. But the rest of the book is a lot less memorable, and it doesn’t quite prompt you into action.

That’s where Zone to Win comes in, and it helps me understand where we really got a couple things really wrong at Return Path (as an aside, Moore once met my Return Path cofounder George at a conference, and when George described our business to him, he said “Ah, a blue collar business. Those can work, too.” I think I understand what he meant by that, although it doesn’t sound like a compliment!)

In Zone to Win, Moore shows you how to put the three Horizons into action by creating an overlay framework to managing your company to help optimize all three zones simultaneously. The four zones are:

The key takeaways for me from this framework as well as the notes of where we got things wrong at Return Path, even while acknowledging that we had to play across H1, H2, and H3 simultaneously, were:

• Performance Zone: Managing your main H1 business in a way that drives growth and customer success for the long haul
• Productivity Zone: Managing your main H1 business for optimal profitability and scalability
• Incubation Zone: Starting new H3 businesses and hoping they work
• Transformation Zone: Getting your H3 business through H2 and into H1 to the point where it’s at least 10% of your overall revenue

What we got right at Return Path was first recognizing that we needed to incubate new businesses as the growth in our core business started to slow down, as well as recognizing that we needed to step up our game in managing the core business for performance. So, Moore would say something like “congratulations, you drew up the correct strategy.” But we fell down on implementation for reasons in three of the four zones. Our problem with the Performance Zone is that we discovered the three horizon model too late — there were several years where we were running R&D experiments in the middle of the core business, which created chaos. By the time we got religion around it, we were constantly playing catch up redesigning our management processes — like the teenager still wearing his kid clothes looking awkward and misfit. In the Productivity Zone, we did invest in productivity, but we weren’t aggressive enough about insisting on End of Life for some programs or products, and and we were bogged down by a convoluted legacy implementation of our CRM system that we never wholesale fixed. But the biggest problem we ran into was in the Transformation Zone, where we tried to jam two new businesses through that zone at the same time instead of focusing all our energies on one. I bet we could have pulled off even more of a transformational success with our security business (the one further along) if we hadn’t also been trying to get our consumer insights business through H2 at the same time. At least Moore notes that’s the hardest zone to get right, so I don’t feel quite so dumb.

There were probably other exogenous factors that caused us to fall down on implementation, too, but I think this had a lot to do with it. And don’t get me wrong, Return Path was a success in the end. It just could have been more successful if we had caught this book and adhered rigorously sooner. It was even published in time — somehow we just missed it. We were lured by customer traction and market pull into thinking we could do both. And it’s certainly possible that we were advised against this by one or more of our board members and plowed ahead anyway.

Moore is a masterful writer. If you haven’t read Crossing the Chasm or Inside the Tornado, for example, if you’re a GenZ founder and you think “wow those books came out before I was born, they can’t be relevant,” you should start by reading them. They’re still 100% applicable today, and Moore’s subsequent editions have updated some of the case studies, even if not totally contemporary — and these are worth reading even as a raw startup (in fact, especially as a raw startup). But once you finish those and your business gets larger, go straight into Escape Velocity and be sure to add on Zone to Win.

Book Short:  Triumph over Adversity

In truth, Malcolm Gladwell’s most recent book, David and Goliath: Underdogs, Misfits, and the Art of Battling Giants, was a bit of a disappointment.  I thought his first three books, Tipping Point, Blink, and Outliers, were fantastic, and I routinely refer to them in business.  David and Goliath isn’t bad, it’s just a little light and hangs together a lot less than Gladwell’s other books.

I just read a scathing review of it in The New Republic, which I won’t bother linking to, mostly because the reviewer was on a total rant about Gladwell in general and was particularly insulting to people who read Gladwell (an interesting approach to a book review), essentially calling us self-help seekers who aren’t interested in reality or wisdom.  Nice.

Two seminal quotes from the book that get at its essence are:

To play by David’s rules you have to be desperate. You have to be so bad that you have no choice.

and

He was an underdog and a misfit, and that gave him the freedom to try things no one else ever dreamt of.

Those things are probably generally true in life, but also applicable to business.  A business book I read years ago called The Underdog Advantage: Using the Power of Insurgent Strategy to Put Your Business on Top, by David Morey and Scott Miller, brings this principle to life for work.

I also liked the concept Gladwell talked about a few times in the book about being a big fish in a small pond, and how that can sometimes be a better place to be than a small fish in a big pond in terms of building self-confidence.  That’s certainly been true for me in my life.

If you go back the premise of Gladwell’s books in general, as I heard him say on The Daily Show the other night — “to get people to look at the world a little differently” — then David and Goliath does that on some level.  And for that alone, it’s probably worth a quick read.

Book Short:  Blogging Alone?

I usually only blog about business books, but since I read Bowling Alone: The Collapse and Revival of American Community, by Robert Putnam, because of its connection to the topic of Internet community and social media, I’ll record some thoughts about and from it here.

It’s an interesting read, although a little long.  Putnam’s basic thesis is that America’s social capital — the things that have brought us physically and emotionally together as a country throughout much of the 20th century such as church, voting, and participation in civic organizations like the PTA or the Elks Club — are all severely on the decline.  The reasons in Putnam’s view are television (you knew all those re-runs of The Brady Bunch would eventually catch up to you), suburban sprawl, two-career families, and “generational values,” which is Putnam’s way of saying things like people in their 60s all read newspapers more than people in their 50s, who all read newspapers more than people in their 40s, etc.  He believes the decline is leading to things like worse schools, less safe neighborhoods, and poorer health.

The book does a good job laying out the decline in social capital with some really interesting and somewhat stunning numbers, but the book’s biggest shortcoming is that Putnam doesn’t do the work to determine causation.  I buy that there’s a correlation between less voting and less safe neighborhoods, for example, but the book doesn’t convince me that A caused B as opposed to B causing A, or C causing both A and B.  What I really wanted at the end of the book was for Putnam to go mano-a-mano with the Freakonomics guy for a couple hours.  Preferably in those big fake sumo suits.

The book was published in 2000, so probably written from 1997-1999, and therefore its treatment of the Internet was a little dated — so I found myself wanting more on that topic since so much of the social media revolution on the Internet is post-2004.  His basic view of the Internet is that it is in fact a bright spot in the decline of community, but that it’s changing the nature of communities.  Now instead of chatting with whoever is bowling in the next lane over at the Tuesday night bowling league on Main Street, we are in an online discussion group with other people who own 1973 BMW 2002 series cars, preferably the turbo-charged ones.  So the micro-communities of the Internet circa 2000 are more egalitarian (“on the Internet, no one knows you’re a dog”), but more narrow as well around interests and values.

What has social media done to Putnam’s theories in the last seven or eight years?  How have things like blogging, MySpace, LinkedIn, YouTube, and Photobucket changed our concept of community in America or in the world at large?  I welcome your comments on this and will write more about it in the future.

Book Short:  Scrum ptious 

I just finished reading Scrum: The Art of Doing Twice the Work in Half the Time, by Jeff Sutherland and JJ Sutherland. This reading was in anticipation of an Agile Facilitation training my executive team and I are going through next week, as part of Return Path’s  Agile Everywhere initiative. But it’s a book I should’ve read along time ago, and a book that I enjoyed.

Sutherland gets credit for creating the agile framework and bringing the concept scrum to software development over 20 years ago. The book very clearly lays out not just the color behind the creation of the framework, and the central tenets of practice again, but also clear and simple illustrations of its value and benefits.  And any book that employs the Fibonacci series and includes Theodore Roosevelt’s “Man in the Arena” quote — my all-time favorite — is off to a good start by me.

I’ve always appreciated a lot of the underlying philosophy of Agile, such as regularly checking on projects, course correcting in response to feedback from customers or other stakeholders, and working hard to remove any impediments to progress in real time.

One of the author’s most poignant points is that “multitasking makes you stupid.”  I hadn’t focused in the past how agile allows you to clear away context shifts to focus on one task at a time, but that’s another great take away from the book.

Our Agile Everywhere initiative, which is designed to improve productivity across the organization, as well as increase accountability through transparency, is even more critical in my view after having read this book.

The thing that I am left struggling with, which is still very much a work in progress for us, and hopefully something that we will address more head on in our training next week, is the application of the agile framework to teams that are not involved in the production of a tangible work product, such as executive or other leadership teams.  That is something that our Agile Everywhere deployment team has developed a theory about, but it still hasn’t entirely sunk in for me.

I can’t wait for next week’s training session!  If you have any experience applying the agile framework to different types of teams in your company I’d love to hear more about it in the Comments.

Book Short:  Internet Fiction, part II

I hate to write a lame post, but here’s what I wrote earlier in the year about Eliot Peper’s first Internet thriller, Uncommon Stock:

Eliot Pepper’s brand new startup thriller, Uncommon Stock, was a breezy and quick read that I enjoyed tremendously. It’s got just the right mix of reality and fantasy in it. For anyone in the tech startup world, it’s a must read. But it would be equally fun and enjoyable for anyone who likes a good juicy thriller.

Like my memory of Hackoff, the book has all kinds of startup details in it, like co-founder struggles and a great presentation of the angel investor vs. VC dilemma. But it also has a great crime/murder intrigue that is interrupted with the book’s untimely ending.  I eagerly await the second installment, promised for early 2015.

Having just finished that second installment, called Uncommon Stock: Power Play, basically I want to say “ditto.”  Power Play was just as good as the first book, and now I can’t wait for the third. Where the first installment’s startup focus was around funding and founder dynamics, this one’s startup focus was around shipping product and customers. The thriller part was just as juicy.

It’s also kind of fun reading about the Boulder startup scene, especially from a writer who doesn’t and who has never spent a ton of time there. He gets some things remarkably accurate with crisp descriptions. I was kind of hoping for a cameo by Brad, at least in the form of a throw-away comment about the “long haired homeless-looking investor in the corner of Frasca.”

Book Short:  Worth Buying Free

The cynic in me wanted to start this book review of  Free: The Future of a Radical Price, by Chris Anderson, by complaining that I had to pay for the book.  But it ended up being good enough that I won’t do that (plus, the author said there are free digital versions available — though the Kindle edition still costs money).  At any rate, a bunch of reviews I read about the book panned it when compared to Anderson’s prior book, The Long Tail (post, link to book).

I won’t get into the details of the book, though you’ll get an idea from the paragraph below, but Anderson has a few gems worth quoting:

• Any topic that can divide critics into two opposite camps — “totally wrong” and “so obvious” — has got to be a good one
• Free makes Paid more profitable
• Younger players have more time than money…older players have more money than time
• Doing things we like without pay often makes us happier than the work we do for a salary
• It’s true that each generation takes for granted some things their parents valued, but that doesn’t mean that generation values everything less
  

While Free is s probably not quite as good as The Long Tail, it does a good job of organizing and classifying and explaining the power of different economic models that involve a free component, and I found it very thought provoking about our own business at Return Path.

We already do a couple forms of Free — we practice the “third party” model, by giving things away to ISPs but selling them to mailers; and we practice Freemium by providing Senderscore.org and Feedback Loops for free in order to attract paying customers to our testing and monitoring application and whitelist.  But could we do others?  Maybe.  They may not be revolutionary, but they’re smart marketing.

As some of the reviewers write, the book isn’t the be-all-end-all of marketing, it overreaches at times, and it is more applicable to some businesses than others, but Free was definitely worth paying for.

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.

Book Short:  Two New Ones from Veteran Writers

I’m feeling very New York this week.  I just read both Outliers: The Story of Success, by Malcolm Gladwell, and Hot, Flat, and Crowded: Why We Need a Green Revolution – and How It Can Renew America, by Tom Friedman.  Both are great, and if you like the respective authors’ prior works, are must reads.

In Outliers, Gladwell’s simple premise is that talents are both carefully cultivated and subject to accidents of fate as much as they are genetic.  I guess that’s not such a brilliant premise when you look at it like that.  But as with his other two books, The Tipping Point (about how trends and social movements start and spread) and Blink (about how the mind makes judgments), his examples are fascinating, well researched, and very well written.  Here are a couple quick nuggets, noting that I don’t have the book in front of me, so my numbers might be slightly off:

• Of the 200 wealthiest people in human history, 9 were Americans born within 5 years of each other in the 1830s – far from a normal distribution for wealth holders/creators
• Most Silicon Valley titans were both within 2 years of each other in 1954-1955
• 40% of great hockey players are born in Q1; 30% in Q2; 20% in Q3; and 10% in Q4, as the “cutoff date” for most youth leagues is January 1, so the biggest/oldest kids end up performing the best, getting the best coaches and most attention that propels them throughout their careers

Also, as with his other books, it’s hard to necessarily draw great and sweeping conclusions or create lots of social policy, both of which are quite tempting, as a result of the data.  Scholarly, comprehensive research it might not be, but boy does he make you think twice about, well, lots of things.

In Hot, Flat, and Crowded, Tom Friedman makes a convincing case that two wrongs can make a right, or more to the point, that fixing two wrongs at the same time is a good way of fixing each one more than otherwise would be possible.  What I like best about this book is that it’s not just another liberal journalist trashing America — Friedman’s whole premise here (not to mention language) is fiercely optimistic and patriotic, that if we as a country take a sweeping global leadership role in containing CO2 emissions, we will both save the planet and revive our economy, sustaining our global economic leadership position into the next century at a time when others are decrying the end of the American empire.

His examples are real and vivid.  Like Gladwell, one never knows how unbiased or comprehensive Friedman is, but he covers some of these topics very poignantly:

• The very strong negative correlation between control of oil supply and democracy/freedom
• A comprehensive vision for the energy world of the future that’s very cool, apparently has already been piloted somewhere, and feels like it’s actually doable
• The startling numbers, even if you sort of know them already, about the sheer number of people who will be sharing our planet and consuming more and more resources in the coming decades
• How too many years of being a privileged nation has led to politics he brilliantly calls “dumb as we wanna be”

Friedman calls his mood sober optimism — that’s a good description.  It’s a very timely book as many Americans hold out hope for the new administration’s ability to lead the country in a positive direction and also restore American’s damaged image in the world come January 20. I have to confess that I still haven’t read Friedman’s The Earth Is Flat, although I read him in the New York Times enough and have seen enough excerpts (and lived in business enough the last 5 years!) to get the point.  And actually, Hot, Flat, and Crowded has enough of the “Flat” part in it that even if you haven’t read The Earth is Flat, you’ll get more than just the gist of it.

It feels like it may be a bit premature to write a post with this title here in the summer of 2021. Even as vaccines are rolling out fairly quickly, the combination of the Delta mutation of the COVID-19 virus and a bizarrely large anti-vaccine movement in the US, plus slower vaccine roll-outs in other parts of the world, are causing yet another spike in infections. 

However, I read Michael Lewis’s The Premonition last week, a bit of a “mid-mortem” on the Pandemic, and it got me thinking about what lessons we as a society have learned in these past 18 months, and how they can be applied to entrepreneurs and startups. I am particularly drawing on the few weeks I was deeply engaged with the State of Colorado’s COVID response effort, which I blogged about here (this is the 7th post in the series, but it has links to all the prior posts in order).

Here are a few top of mind thoughts. 

First, entrepreneurial skills can be applied to a wide range of society’s challenges.  The core skills of founders and entrepreneurs are vision, leadership/inspiration/mobilization of teams, and a fearlessness about trying things and then seizing on the ones that work and rapidly discarding the ones that don’t, quickly absorbing learnings along the way. If you look broadly at the world’s response to the Pandemic, and at Colorado’s response as a microcosm, you can see that the jurisdictions and organizations that employed those types of skills were the ones that did the best job with their response. The ones that flailed around — unclear vision, lurching from plan to plan and message to message, pandering to people instead of following the science, sticking with things that didn’t make sense — those folks got it wrong and saw more infections, hospitalizations, and deaths. 

Second, parachuting in and out of leadership roles really works but is a little bit unsatisfying. I think that, even in a short period of time, I got a lot of good work done helping organize and stand up the IRT in Colorado. It was very much an “interim CEO” job, not unlike a lot of the roles we place at Bolster. Without a ton of context around the organization I was joining, I still had an impact. The unsatisfying part is more about me as the exec than it is about the organization, though. I’m so used to being around for the long haul to see the impact of my work that I found myself pinging Sarah, who took over the leadership of the group after I left, Brad, and Kacey and Kyle on the teamfor a few weeks just to find out what was going on and what had become of Plan X or Idea Y. 

Third, I came to appreciate something that I used to rail against in the business world, or at least came to appreciate an alternative to it. I frequently will say something like “don’t solve the same problem four different ways,” almost always in response to people facing a big hole in the organization and trying to hire four different people to fill the hole, when likely one hire will do (or at least one for starters). But what Michael Lewis calls the “Swiss cheese defense” or Targeted Layered Containment (TLC) that worked pretty well as defense and mitigation against the virus while there was no vaccine totally worked. He calls it the Swiss cheese defense because, like a slice of Swiss cheese, each layer of defense has holes in it, but if you line up several slices of Swiss cheese just right, you can’t see any of the holes. Some masking here, some quarantining there, couple closures over there, a lot of rapid testing, some working from home where possible, some therapeutics – and voila – you can blunt the impact of a pandemic without a vaccine. The same must be true for complex problems in business. I am going to amend my approach to consider that alternative next time I have a relevant situation. 

Fourth, blunt instruments and one size fits all solutions to complex problems (especially in this situation, with multiple population types in multiple geographies) — even those with good intentions — can’t work, drive all sorts of unintended consequences, with a lack of feedback loops can make situations worse or at least frustrating. Nationwide or even statewide rules, quite frankly even county-wide rules, don’t necessarily make sense in a world of hot spots and cool spots. Statewide regulations for schools when districts are hyper local and funded and physically structured completely differently, don’t always make sense. There are definitely some comparables in the business world here – you’d never want, for example, to compensate people across all geographies globally on the identical scale, since different markets have different standards, norms, and costs of living. 

Finally, I am left with the difficult question of why all the preparation and forethought put into pandemic response seemed to fail so miserably in the US, when several nations who were far worse equipped to handle it in theory did so much better in reality. I am struggling to come up with an answer other than the combination of the general American theme of personal choice and liberty meeting the insanely toxic and polarizing swirl of politics and media that has made everything in our country go haywire lately. Big government incompetence in general, and failures of national leadership on this issue, also factor in heavily.  I also gather from Michael Lewis that the transition from one administration to another frequently involves a massive loss of institutional knowledge which can’t help. Of all these, failure of strong leadership stands out in my mind. 

The lesson for startups from this last point is important. Leadership matters. Eisenhower once said something to the effect that “plans are nothing but planning is everything.”  The thoughtfulness, thorough planning, communication and inspiration, and institutional knowledge that come from effective leadership matter a lot in executing and growing a startup, because you literally never know what COVID-analog crisis is lurking quietly around the corner waiting to pounce on your startup and threaten its very existence.

I haven’t done short book summaries in a LONG time, but I’ll try to start adding that back into the mix as I read interesting and relevant books. Here’s one to add to your list: One Life to Lead, by Russell Benaroya. I was recently connected to Russell by a mutual friend, TA McCann at Pioneer Square Labs. TA had a sense Russell and I would hit it off, and we did. Russell is a multi-time founder/CEO, a Coach, and an author, so we have a lot in common.

One Life to Lead is an excellent book. First, it is short and easy to get through. Unlike a lot of business books, it doesn’t go on too long or contain anything extraneous. It’s to the point!

Second, the book is a business book that’s not really about business. It’s about life and what Russell calls Life Design, which is a great framing of how to be intentional about leading your life. While I have become less and less of a life planner as I’ve gotten older under the headline of “man plans, God laughs,” I am a huge believer in being intentional about everything, which I talk about in Startup CEO quite a bit in the nuts and bolts context of building your business.

Finally, Russell’s framework is easy to understand and full of concrete exercises you can to. Here are his five steps, but you’ll have to read the book to get the details:

• Ground stories with facts. This reminds me a lot of the principles we have taught team members over the years in our Action/Design (and related) trainings. First, start with absolute concrete facts that everyone will agree are facts.
• Establish your principles. This is brilliant. Your company has documented values or operating principles. Why don’t you?
• Harness energy from the environment. Figuring out what makes you tick, and what drains your energy, is so important.
• Get in and stay in your genius zone. Shouldn’t we all focus our time on the things we do best and love the most?
• Take action. How to put it together and make it all happen.

If you don’t get out in front of life, it will happen to you, and Russell’s framework is about how to make sure you are in the driver’s seat of your own life. Here’s to that.