CHAPTER TWENTY-THREE

COLLECTING DATA

Unless you're a sole proprietor, with every minute that passes from the moment you found your company, you know less about it. While you're never going to know everything, collecting data, both inside and outside your organization, is an important skill that only grows in importance as your company grows.

EXTERNAL DATA

Mike Mills, a long-time Return Path senior manager, frequently refers to the NIHITO Principle: Nothing Interesting Happens in the Office. Now that's not entirely true: running a company requires spending a huge amount of time with people and on people issues. Setting your company's vision and strategy means situating it into a larger market context. What problem are you solving? Whose needs are you meeting? Who else is trying to reach the same audience? You can't answer those questions intelligently without being “in-market.” Spend time with customers and channel partners. Actively work industry associations. Get to know customers well. Walk the floor at a conference. Understand what the substitute products are and not only the direct competition.

In one year alone, I traveled nearly 160,000 miles around the world to meet with prospects, clients, partners, and industry luminaries. You don't have to be a road warrior to get this one right. You can attend events in your local area and develop a local network of people you can meet with regularly. If you're running a company with consumer products, it may be a lot easier. You do have to get out of the office.

Learning from Customers

One of the greatest gifts that you can give to yourself and your team is the insight that you get by spending time in the market with a few of your top customers or prospects. I have always found that to be one of the most valuable ways to shape the business, both strategically and operationally.

One of the most vivid memories I have to illustrate this concept is a meeting that I had with Crate & Barrel, a prospect, in the very early days of Return Path. I went in with a number of product sales specialists from our reseller, DoubleClick (back when DoubleClick was in the email business), for an all-day session with C&B's online marketing team. We collectively were pitching everything, possibly including the kitchen sink—ad serving through DART, buying online media through the DoubleClick Network, using Abacus to expand the reach of their catalog, sending email through DARTMail, renting email lists through DoubleClick's email list business, and, oh yes, using Return ECOA service to keep their email database clean.

The meeting was a mess. As far as I can tell, it didn't lead to any meaningful business, either for us or for DoubleClick. During this meeting, I learned two things the hard way but both were incredibly valuable lessons that continue to shape our business today.

First, we created massive confusion by bringing multiple sales-people in to each present a specific product to the customer, rather than sending in one senior, consultative salesperson to present a holistic digital marketing solution. Picture yourself as the head of e-commerce for a major retailer, expecting an insightful day with the leading vendor in the space. You walk into the meeting and see seven different salespeople introducing themselves—to each other! Since then, we have tried hard to run with a single sales force organized around our customers, rather than multiple sales teams organized around our own products.

Second, we discovered that the original version of our flagship ECOA product (which was still in beta at the time) had a couple of flaws that were probably going to make it a nonstarter in the retail vertical. We also learned, happily, that the client loved the concept. There were some details in the original product that had to be fixed if we were ever going to get traction with key customers in that key segment. We fixed these problems and were able to successfully relaunch the product later that year. More important, we now stay much closer to our customers as we develop new products and features, assuring that our design concepts are firmly market tested before they head into development.

I could have introduced this anecdote in chapters on “Sales” or “Product Development” but the specific lessons aren't the point. The point is that these key insights were gained in a single customer meeting. I could have spent months in our sales pit and it might never have occurred to me to reorganize the entire unit around customer solutions rather than Return Path products. Similarly, a significant investment into our beta testing operation would have yielded far less than the simple insight that we needed to test out our ideas in the market long before they became workable products. Again: both of these radical (and, in the long run, extremely valuable) shifts were the result of an hour or two spent with a customer rather than in the office. If that doesn't prove the value of the NIHITO principle, I can't imagine what would.

Learning from (Un)Employees

As I write this, Return Path has 400 employees in 12 offices around the world. That number has probably changed slightly as this book has gone to press but I can always call Angela Baldonero, our SVP of People, for the latest count. I'd have a harder time telling you exactly how many un-employees we have.

Un-employees are people in our industry. They are friends of Return Path. In some cases, they are people whom we have almost hired over the years—sometimes more than once, but we never have. They're friends of Return Path. Sometime they're clients or partners. Sometimes they aren't. Sometimes they have a token stock option grant as advisers. Sometimes they don't.

What all of our un-employees have in common is that they have played an incredibly valuable role in our company's development over the years. They're extra sets of eyes and ears for us. They often give us valuable information long before any of our regular employees hear anything. They make powerful connections for us with other companies in the industry. They know us well enough to know our products and strategy to give us sound advice—unsolicited but always appreciated. In truth, they're probably more valuable to us as un-employees than they would be as employees!

Our un-employees aren't industry luminaries or CEOs and they aren't classic advisers or board members. They never meet as a group and there's nothing formal about the relationship. In fact, formalizing the relationship would be a mistake: it would take them out of the market and put them into the company. That's where our employees belong and that's where startup CEOs are forced to spend a significant portion of their time. Un-employees are another connection to the world outside. There's no reason to sever it.

INTERNAL DATA

There are a number of tactics you can use to collect more data from inside your organization. Having an open-door policy is one. Doing regular employee lunches or breakfasts or in-office roundtables is another. Management by walking around is a third. There are others as well.

Skip-Level Meetings

I will discuss the best way to approach “skip-level” meetings later. Here, I want to reiterate how valuable they are as tools for gathering data. The employees you speak with who don't report directly to you will give you insights into details that probably aren't on their managers' radars. More important, this is an extremely valuable way to confirm whether your managers and their teams are aligned—if you hear radically different things from your reports and their reports, you have a problem that needs to be addressed right away.

Subbing

Another way to collect data from your organization is to actively substitute for your team members when they are out. Usually, when someone on your team goes on vacation, it's easiest to just let things run for that week or two. The people who report to you know you're around if they need something but you don't take over actively working with them, right?

I learned the value of not doing this when our first wave of employees started taking their seven-year sabbaticals. Six weeks is too long for autopilot. So, I actively sub in for team members on sabbatical. Sit in their offices. Have weekly meetings with their staff as a group and 1:1. Work with them on their goals. Attend meetings that I'm not normally invited to.

The insight I get into things in specific areas of the business is great. I learn more about the ins and outs of everyone's work, more about the team dynamic and more about how the team works with other groups in the company. Most importantly, I'm learning more about how my staff members and I interact and how I can manage that interaction better in the future. I'm making or suggesting some small changes here and there on the margin.

You don't need to wait until someone takes a leave of absence or a lengthy sabbatical to try this technique out. You can use any vacation someone on your team takes as an excuse to get closer to the front lines. You will be amazed at how much you learn.

Productive Eavesdropping

A while back, we did some pretty extensive renovations of our office. For better or for worse, we did this work without moving out. We basically crammed everyone into one half of the office while the contractors were working on the other half; when that work was done, we all crammed into the finished half.

One of the interesting side effects of this project is that I shared my office with Anita Absey, our head of sales. It was the first time I shared an office in quite a while, at least since the first year of the company's life when we all sat in one big room together. The two of us got in a lot more time together than we usually do. As much as we tried to block out the sound coming from across the room, there was plenty of inadvertent eavesdropping in both directions.

For my part, I enjoyed it. I had more insight into the sales organization. I got much more of a window into what Anita works on than usual. We had a lot of quick back-and-forths. When we had our weekly check-ins, they were half their normal length, since we had already covered much of the topics in our casual conversation.

There are some companies that have a “no office” policy for everyone. While there are challenges to that kind of office layout (I definitely have many confidential or private conversations throughout the day and spend a lot of time on phone calls or Skype), I am considering making that change here now. I recently visited the office of my friend Jon Zabusky, CEO of Seamless, and he has a no office policy, including a Leadership Table where his entire senior management team sat shoulder to shoulder all day, with plenty of private conference space nearby as needed. However you institutionalize productive eavesdropping, it's a great way to collect data from your team.

The bigger you get, the more important it is that you get good at collecting data, from wherever you can collect it. Even if you're the kind of decision maker who acts on intuition, intuition works best when it's informed by knowledge and experience.