Only Once

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Blogiversary, Part VII

Blogiversary, Part VII

Today marks the seventh anniversary of OnlyOnce.  I haven’t marked the date with a post in three years, but here was my last such post (with links to prior posts in it).  In sum up until now, my reasons for blogging have been written up as:

• “Thinking” (writing short posts helps me crystallize my thinking)
• “Employees” (one of our senior people once called reading OnlyOnce “getting a peek inside Matt’s head)
• My book reviews help me crystallize my takeaways from books and serve as a bit of a personal reference library
• I like writing and don’t get to do it often

After seven years, though, I’m going to add another important point of value for me for writing OnlyOnce:  now, at 672 posts (including 27 that are scheduled but not yet posted – easy a record for me), this blog now serves as a repository for me of my own lessons learned, best practices, anecdotes, and aphorisms.  Thanks to Lijit, it’s easy for me and others to search.  Thanks to the new WordPress format and design by my friends at Slice of Lime, the categories and tagging make it much easier to navigate.

I probably get one question a week from a fellow CEO or prospective entrepreneur or employee that, instead of typing out an answer or setting up a meeting, I can actually just send a link as a starting point.  Sometimes there are follow-up questions, sometimes there aren’t.  But the blog is proving to be a very efficient form of documentation.

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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.

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Backwards

Backwards

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!

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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.

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

As I mentioned in a previous post, I’ve recently started writing 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. Below is a re-post of George’s column from this week, which I think my OnlyOnce readers will enjoy.

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

By George Bilbrey

As part of The Magill Report’s Online Entrepreneur column, I’d like to share some of Return Path’s learning about how to stay innovative as you grow. In Part One, I’m going to cover some of the organizational techniques we’ve been employing to stay innovative. In Part Two, I’ll talk about some of the practices we’re using in our product management and development teams.

When we were starting our deliverability business at Return Path, staying innovative was relatively easy. With a total of four people (two employees, two consultants) involved in selling, servicing, building and maintaining product, the environment was very conducive to innovation:

• Every employee had good conversations with customers every day—We could see the shortcoming of our tools and got great, direct feedback from our clients.

• Every employee was involved in every other function in a very detailed way—This gave everyone a strong intuition as to what was feasible. We all knew if the feature or function that the client was asking for was within the realm of the possible.

• We were very, very focused on creating customers and revenue—We were a startup. If we drove revenue above costs, we got to take home a salary. Every conversation and decision we made came down to finding out what would make the service (more) saleable. It was stressful, but productively stressful and fun.

We were lucky enough to come up with good concept and the deliverability services market was born. Our business grew rapidly from those two full-time employees to where we are today with about 250 employees in eight countries supporting more than 2,000 customers.
Growing our business has been one of the most challenging and fun things I’ve ever had the chance to take part in. However, growth does have some negative impacts on innovation if you don’t manage it right:

• Supporting the “core” comes at the expense of the new—As you grow, you’ll find that more and more of your time is spent on taking care of the core business. Keeping the servers running, training new employees, recruiting and other internal activities start to take up more and more of your time as the business grows. Clients ask for features that are simple linear extensions of your current capabilities. You don’t have time to focus on the new stuff.

• Staying focused gets harder as the business get more intricate—As your business grows, it will become more complex. You’ll build custom code for certain clients. You’ll need to support your stuff in multiple languages. You find that you have to support channel partners as well as direct customers (or vice versa). All this takes away from the time you spend on “the new” as well.

• Creating “productive stress” becomes difficult—At the point our business became profitable, life became a lot better. There was less worry and we could invest in cool new innovative things. However, it’s hard to drive the same urgency that we had when we were a start-up.

Of course, a bigger profitable company has advantages, too. For one, there are the profits. They come in awfully handy in funding new initiatives. And while they can remove the “productive” stress that comes from needing revenue to keep a venture going, they can also remove the distracting stress of needing revenue to keep a venture going. Second is the ability to capitalize on a well-known brand—the result of many years of marketing, PR, and thought leadership within the industry. Third, we have access to a much broader array of clients now, which I’ll explain the importance of in a minute. Finally, back-end support and process—an accounting team that gets the invoices out, an HR team that helps make strategic hires—makes the folks engaged in product development more productive.

So what have we done to leverage these strengths while also combating the forces of inertia? We’ve done a lot of different things, but the major focus has been, well, focus. For the two to three key initiatives that we think are fundamental to growing our business, we’ve built a “company inside the company” to focus on the project at hand. A good example of this is our recent Domain Assurance product, our first product to address phishing and spoofing. Initially, we tried to run the project by assigning a few developers and part of a product manager’s time with some part-time support from a sales person. It didn’t work. We weren’t able to move forward quickly enough and some of our folks were getting fried.

Our answer was to create a dedicated team inside our business that focused entirely on the phishing/spoofing product space. The key components of the “company inside the company” were:

• Fully dedicated, cross-functional resources—Our team represented very much the kinds of folks you’d find in an early stage company: development, system administration, sales and marketing. This team worked as a team, not as individuals. Many of these resources were fully dedicated to this new initiative.
• Deadline-driven productive stress—When we launch new products, they go through four discrete stages (I’ll explain this in more detail in my next column). We set some pretty tight deadlines on the later stages.

• Customer involvement, early and often—The team involved customers in building our new product from the very beginning. From continuously reviewing early wireframes, prototypes and then beta versions of the product, we got a lot of client and prospective client feedback throughout the process.

We’re still working on the exact right formula for our “company inside a company” approach, but our experience to date has shown us that the investment is worth it.

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The iPad’s Limitations as a Business Device

The iPad’s Limitations as a Business Device

I love my iPad.  Let me just start with that.  I’ve found lots of use cases for it, and it’s very useful here and there for work.  But I’ve seen a bunch of people trying to use it as a primary business device, which I can’t quite figure out.  Here are the things that prevent me from making it my main business device:

• lack of keyboard (can mitigate with the keyboard dock, which I have)
• lack of mouse (not a killer limitation, just takes some getting used to, also the arrows on the keyboard dock help)
• lack of connection to files and true Office compatibility (this can largely be mitigated through a combination of the Dropbox or Box.net app and the QuickOffice app)
• lack of multitasking (this is the main killer)

Much of the time, I need to be rapidly switching between and simultaneously using email, the web, and multiple Office documents.  Having to basically shut down each one and then fire up another instead of having them all up at once on multiple monitors or at least easily accessible via alt-tab is a big pain, especially when trying to cut and paste things from one to another.   The iPad is awesome for many many things, and for limited work usage (other than complex spreadsheets), it works “well enough.”  But I would find it difficult to make it my primary business machine other than for a fairly short (1 day) business trip.

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Why CEOs Shouldn’t Mess with Engineers

Why CEOs Shouldn’t Mess with Engineers

I went to the Vasa Royal Warship Museum in Stockholm the other day, which was amazing – it had a breathtakingly massive 17^th century wooden warship, which had been submerged for over 300 years, nearly intact as its centerpiece.  It’s worth a visit if you’re ever there.

The sad story of its sinking seems to have several potential causes, but one is noteworthy both in terms of engineering and leadership.  The ship set sail in 1628 as the pride of the Swedish navy during a war with Poland.  It was the pride of King Gustavus Adolphus II, who took a keen personal interest in it.  But the ship sank literally minutes after setting sail.

How could that be?  While the king was quick to blame the architect and shipbuilder, later forensics proved both to be mostly blameless.

Likely cause #1:  after the ship was designed and construction was under way, the King overruled the engineers and added much heavier cannons on the upper armament deck.  The ship became top-heavy and much less stable as a result, and while the engineers tried to compensate with more ballast below, it wasn’t enough.

Likely cause #2:  the King cut short the captain’s usual stability testing routines because he wanted to get the ship sailing towards the enemy sooner.

Let’s translate these two causes of failure into Internet-speak.  #1:  In the middle of product development, CEO rewrites the specs (no doubt verbally), overruling the product managers and the engineers, and forces mid-stream changes in code architecture.  #2:  In order to get to market sooner, the CEO orders short-cuts on QA.  I’m sure you’ll agree the results here aren’t likely to be pretty.

So product-oriented leaders everywhere…remember the tale of Gustavus Adolphus and the Vasa Royal Warship and mind the meddling with the engineers!

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Feature Request, Part II

Feature Request, Part II

In Part I, I asked for time zone alerts on cell phones for off-hours and a mechanism for alerting people when they’re replying-to-all when they were bcc’d.

Today, I ask for an iPhone (and I suppose Android) app:  turn a photo of a whiteboard into a Word or PPT document!

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Investment in the Email Ecosystem

Investment in the Email Ecosystem

Last week, my colleague George Bilbrey posted about how (turns out – shocking!) email still isn’t dead yet.

Not only is he right, but the whole premise of defending email from the attackers who call it “legacy” or “uninteresting” is backwards.  The inbox is getting more and more interesting these days, not less.  At Return Path, we’ve seen a tremendous amount of startup activitiy and investment (these two things can go together but don’t have to) in in front end of email in the past couple years.  I’d point to three sub-trends of this theme of “the inbox getting more interesting.”

First, major ISPs and mailbox operators are starting to experiment with more interesting applications inside their inboxes.  As the postmaster of one of the major ISPs said to me recently, “we’ve spent years stripping functionality out of email in the name of security – now that we have security more under control, we would like to start adding functionality back in.”  Google’s recent announcement about allowing third-party developers to access your email with your permission is one example, as is their well-documented experiment with NetFlix’s branded favicon showing up in the inbox starting a few months back.  And Hotmail’s most recent release, which has been well covered online (including this article which George wrote in Mediapost a couple months ago) also includes some trials of web-like functionality in the inbox, as well as other easy ways for users to view and experience their inboxes other than the age-old “last message in on top” method.  Yahoo has done a couple things along these lines as well of late, and one can assume they have other things in the works as well.

I wouldn’t be surprised if many ISPs roll out a variety of enhanced functionality over the next couple of years, although these systems can take a lot of time to change.  Although some of these changes present challenges for marketers and publishers, these are generally major plusses for end users as well as the companies who send them email – email is probably the only Internet application people spend tons of time in that’s missing most state of the art web functionality.

Second, although Google Wave got a lot of publicity about reinventing the inbox experience before Google shut it down a couple weeks ago, there are probably a dozen startups that are working on richer inboxes as well, either through plug-ins or what I’d call a “web email client overlay” – you can still use your Yahoo!, Hotmail, Gmail, or other address (your own domain, or a POP or IMAP account), but read the mail through one of these new clients.  Regardless of the technology, these companies are all trying, with different angles here or there, to make the inbox experience more interesting, relevant, productive, and in many cases, tied into your “social graph” and/or third-party web content.

The two big ones here in terms of active user base are Xobni, an Outlook plugin that matches social graph to inbox and produces a lot of interesting stats for its users; and Xoopit, which recently got acquired by Yahoo and wraps content indexing and discovery into its mail client.

Gist matches social graph data and third-party content like feeds and blogs into something that’s a hybrid of plugin and stand-alone web application.  That sounds a little like Threadsy, although that’s still in closed beta, so it’s hard to tell exactly what’s going to surface out of it.  There’s also Zenbe and Kwaga, and Xiant, which focus on creating a more productive inbox experience for power users.

Furthermore, services like OtherInbox and Boxbe aim to help users cut through the clutter of their inboxes and simultaneously create a more effective means for marketers to reach customers (say what you will about that concept, but at least it has a clear revenue model, which some of the other services listed above don’t have).

Finally, a number of services are popping up which give marketers and publishers easy-to-use advanced tools to improve their conversion or add other enhanced functionality to email.  For example, RPost, a company we announced a partnership with a couple months back, provides legal proof of delivery for email with some cool underlying technology.  LiveClicker (also a Return Path partner) provides hosted analytics-enabled email video in lightweight and easy-to-use ways that work in the majority of inboxes.

Sympact (another Return Path partner) dynamically renders content in an email based on factors like time of day and geolocation – so the same email, in the same inbox, will render, for example, Friday’s showtimes for New York when I open it in my office on Friday afternoon but Saturday’s showtimes for San Francisco after I fly out west for the weekend.  And a Belgian company called 8Seconds (you guessed it, another Return Path partner) does on-the-fly multivariate testing of email content in a way that blows away traditional A/B methods.  While these tools require some basic things to be in place to work optimally, like having images on by default or links working, they don’t by and large require special deals with ISPs to make the services function.

While these tools are aimed at marketers, they will also make end users’ email experiences much better by improving relevance or by adding value in other ways.

Some of this makes me wonder whether there’s a trend that will lead to disaggregation of the value chain in consumer email – splitting the front end (what consumers see) from the back end (who runs the mail server).  But that’s probably another topic for another day.  In the meantime, I’ll say three cheers for innovation in the email space.  It’s long overdue and will greatly enrich the environment in the coming years as these services gain adoption.

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

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

My first thought when my colleague Jen Goldman forwarded me a SlideShare presentation that was 224 pages long was, “really?”  But a short 10 minutes and 224 clicks later, I am glad I spent the time on it.

Paul Adams, a Senior User Experience Researcher at Google, put the presentation up called The Real Life Social Network.  Paul describes the problem I discuss in Part I and Part II of this series much more eloquently than I have, with great real world examples and thoughts for web designers at the end.

If you’re involved in social media and want to start breaking away from the “one size of friend fits all” mentality – this is a great use of time.