Apr 282011

First Rate Intelligence

First Rate Intelligence

One of my favorite quotes of all time comes from F. Scott Fitzgerald, as he wrote in 1936 in “The Crack Up” (which you can read here in Esquire):
The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.

Before seeing this article recently, though, I’m not sure I’d ever seen the sentence that follows:

One should, for example, be able to see that things are hopeless and yet be determined to make them otherwise.

I’ve talked about the Highs and Lows of being an entrepreneur a couple times in the past — here as it relates to the entrepreneur, and here as it relates to the entire organization.  Whether or not this ability is indicative of intelligence (let alone a first-rate one), I’m not sure.  But I do think it’s very high on the list of skills that a successful entrepreneur has to possess.

The flip side of Fitzgerald’s second sentence, of course, is an equally poignant example.  These words are my own, so I won’t italicize them:

One should also be able to look at things that seem perfect and find the faults, weak spots, and potential challenges to their perfection

The best entrepreneurs have to hit both sides of this equation, every day.

Apr 262011

Guest Post: Staying Innovative as Your Business Grows (Part Two)

As I mentioned in a previous post, I write a column for The Magill Report, the new venture by Ken Magill, previously of Direct magazine and even more previously DMNews. I share the column with my colleagues Jack Sinclair and George Bilbrey and we cover how to approach the business of email marketing, thoughts on the future of email and other digital technologies, and more general articles on company-building in the online industry – all from the perspective of an entrepreneur. I recently posted George’s column on Staying Innovative as Your Business Grows (Part One). Below is a re-post of George’s second part of that column from this week, which I think my OnlyOnce readers will enjoy.

Guest Post: Staying Innovative as Your Business Grows (Part Two)

By George Bilbrey
Last month, as part of the Online Entrepreneur column, I shared some of Return Path’s organizational techniques we use to stay innovative as we grow. In this article, I’ll talk about the process we’re using in our product management-and-development teams to stay innovative.

The Innovation Process at Return Path
As we grew bigger, we decided to formalize our process for bringing new products to market. In our early days we brought a lot of new products to market with less formal process but also with more limited resources. We did well innovating one product at a time without that kind of process largely because we had a group of experienced team members. As the team grew, we knew we had to be more systematic about how we innovated to get less experienced product managers and developers up to speed and having an impact quickly.

We had a few key objectives when designing the process:

We wanted to fail fast – We had a lot of new product ideas that seemed like good ones. We wanted a process that allowed us to quickly determine which ideas were actually good.

We wanted to get substantial customer feedback into the process early – We’d always involved clients in new product decisions, but generally only at the “concept” phase. So we’d ask something like “Would you like it if we could do this thing for you?” which often elicited a “Sure, sounds cool.” And then we’d go off and build it. We wanted a process that instead would let us get feedback on features, function, service levels and pricing as we were going so we could modify and adjust what we were building based on that iterative feedback.

We wanted to make sure we could sell what we could build before we spent a lot of time building it – We’d had a few “build it and they will come” projects in the past where the customers didn’t come. This is where the ongoing feedback was crucial.

The Process
We stole a lot of our process from some of the leading thinkers in the “Lean Startup” space – particularly Gary Blanks’ Four Steps to the Epiphany and Randy Komisar’s Getting to Plan B. The still-evolving process we developed has four stages:

Stage 1: Confirm Need

Key Elements

• Understand economic value and size of problem through intense client Interaction
• Briefly define the size of opportunity and rough feasibility estimate – maybe with basic mockups
• Key Question: Is the need valid? If yes, go on. If no, abandon project or re-work the value proposition.

Stage 2: Develop Concept

Key Elements

• Create a high fidelity prototype of product and have clients review both concept and pricing model
• Where applicable, use data analysis to test feasibility of product concept
• Draft a more detailed estimate of effort and attractiveness, basically a business model
• Key Question: Is the concept Valid? If yes, go on. If no, abandon project.

Stage 3: Pilot

Key Elements

• Build “minimum viable product” and sell (or free beta test with agreed to post beta price) with intense client interaction and feedback
• Develop a marketing and sales approach
• Develop a support approach
• Update the business model with incremental investment requirements
• Preparation of data for case studies
• Key Question: Is project feasible? If yes, go on. If no, abandon project or go back to an earlier stage and re-work the concept.

Stage 4: Full Development and Launch

Key Elements

• Take client feedback from Pilot and apply to General Availability product
• Create support tools required
• Create sales collateral, white papers, lead generation programs, case studies and PR plan.
• Train internal teams to sell and service.
• Update business model with incremental investment required
• Go forth and prosper

There are a several things to note about this process that we’ve found to be particularly useful:

A high fidelity prototype is the key to getting great customer feedback – You get more quality feedback when you show them something that looks like the envisioned end product than talking to them about the concept. Our prototypes are not functional (they don’t pull from the databases that sit behind them) but are very realistic HTML mockups of most products.

Selling the minimum viable product (MVP) is where the rubber meets the road – We have learned the most about salability and support requirements of new products by building an MVP product and trying to sell it.

Test “What must be true?” during the “Develop Concept” and “Pilot Phases” – When you start developing a new product, you need to know the high risk things that must be true (e.g., if you’re planning to sell through a channel, the channel must be willing and able to sell). We make a list of those things that must be true and track those in weekly team meetings.

This is a very cross functional process and should have a dedicated team – This kind of work cannot be done off the side of your desk. The team needs to be focused just on the new product.

While not without bumps, our team has found this process very successful in allowing us to stay nimble even as we become a much larger organization. As I mentioned in Part 1, our goal is really to leverage the strengths of a big company while not losing the many advantages of smaller, more flexible organizations.

Apr 212011



I came to an interesting conclusion about Return Path recently.  We’re building our business backwards, at least according to what I have observed over time as the natural course of events for a startup.  Here are a few examples of what I mean by that.

Most companies build organically for years…then start acquiring others.  We’ve done it backwards.  In the first 9 years of our company’s life, we acquired 8 other businesses (SmartBounce, Veripost, Re-Route, NetCreations, Assurance Systems, GasPedal Consulting, Bonded Sender, Habeas).  Since then, we’ve acquired none.  There are a bunch of reasons why we front loaded M&A:  we were working hard to morph our business model to achieve maximum success during the first internet downturn, we knew how to do it, there was a lot of availability on the sell side at good prices.  And the main reason we’re not doing a lot of it now is that there’s not much else to consolidate in our space, though we’re always on the lookout for interesting adjacencies.

Most companies tighten up their HR policies over time as they get larger.  We’ve gotten looser.  For example, about a year and a half ago, we abolished our vacation policy and now have an “open” system where people are encouraged to take as much as they can take while still getting their jobs done.  Or another example is an internal award system we have that I wrote about years ago here.  When we launched this system, it had all kinds of rules associated with it — who could give to whom, and how often.  Now those rules have faded to black.  I’d guess that most of this “loosening up” over time is a vote of confidence and trust in our team after years of demonstrated success.

Most companies start by investing heavily in product, then focus on investing in sales and marketing.  Here we haven’t exactly gotten it backwards, but we’re not far off.  Two years ago, one of our major company-wide initiatives/priorities was “Product First.”  This year, we decided that the top priority would be “Product Still First.”  The larger we’ve gotten, the more emphasis we’ve placed on product development in terms of resource allocation and visibility.  That doesn’t mean we’re not investing in marketing or the growth our sales team — we are — but our mentality has definitely shifted to make sure we continue to innovate our product set at a rapid clip while still making sure existing products and systems are not only stable but also improving incrementally quickly enough.

I don’t know if there’s a single generalizable root cause as to why we’ve built the company backwards, or if that’s even a fair statement overall.  It might be a sign that my leadership team is maturing, or more likely that we didn’t know what we were doing 11-12 years ago when we got started — but it’s an interesting observation.  I’m not even sure whether to say it’s been good or bad for us, though we’re certainly happy with where we are as a company and what our prospects look like for the foreseeable future.

But it does lead me to wonder what else we should have done years ago that we’re about to get around to!

Apr 142011

BookShort: Vive La Difference

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.

Apr 072011

The Fear/Greed Continuum

The Fear/Greed Continuum

My old boss from a prior job used to say that every buyer (perhaps every human in general) could be placed at any point in time somewhere on the “fear/greed continuum” of motivation, meaning that you could win him or her over by appealing to the appropriate mix of those two driving forces if you could only figure out where the person sat on the spectrum.  I’ve found this to be true in life, more in selling situations than anything else, but probably in any negotiation.

Think about some examples:

  • Is your product an ROI sale (you’re appealing to greed), or do all your prospect’s larger competitors use you (fear they’ll get fired if they don’t adopt)?
  • Does the prospective employee really need the new job (e.g., she is motivated by fear), or is she happy where she is but able to be lured away (more motivated by greed) and therefore likely to be swayed by a comp package?
  • You’re selling your company – is the buyer excited about accretive financial synergies (greed) or is he motivated because he has a hole in his product line (fear)?

As I read over this post, I guess this is another way of saying “offense vs. defense,” (related to another post I wrote last year) but somehow I find this language more concrete in selling situations.  I don’t think it’s ever the case that any point on the spectrum is more lucrative than any other point (though I suppose extreme fear OR extreme greed might be more lucrative than equal doses of the two) – the point is to use questions and conversation to discover where your target or prospect sits on the spectrum, then tailor your approach accordingly.