I’ve been involved in Return Path as an investor since 2001 when Return Path and Veripost merged as part of a funding done by Sutter Hill (Greg Sands), Flatiron Partners (Fred Wilson), and Mobius Venture Capital (me). I wrote the very long story in a post titled Return Path Acquires Netcreations in 2004. This post has a ton of Return Path history in it in case you want to go back in time 20 years. And, if you want to only go back in time 10 years, take a gander at Happy Birthday Return Path which is a post about Return Path’s 10 year anniversary and includes the story of the negotiation between me and Fred to merge Return Path and Veripost.
I count my involved in Return Path for 20 years since my investment in Veripost (which became my investment in Return Path) was done in 1999.
Today, Matt is one of my closest friends. In addition to our personal relationship, we’ve had a number of other work experiences besides Return Path. Matt has served on two boards of companies I’ve invested in – FeedBurner (acquired by Google) and Moz. Matt was an early, and engaged mentor in Techstars. Matt introduced me to Scott Dorsey, which led to our investment in High Alpha. Finally, Matt – working with Andy Sautins, Cathy Hawley, and Tami Forman – co-founded Path Forward which was spun off from Return Path.
I’m proud to have been involved in all of these companies with Matt.
Twenty years is a long time to be involved in anything. When a VC talks about a quick exit, you can mention that you know a few (Fred, Brad, and Greg) who has a 20-year board experience. As Fred says, “entrepreneurship and startup investing is a long game. It requires patience, resilience, capital, commitment, and much more.”
Matt – and everyone at Return Path – thank you for letting me be part of your journey.
I was an early investor in two of the first email service providers (Email Publishing and Mercury Mail). My experience with ESPs goes back more than 20 years and, since the mid 1990s, I’ve seen the ESP ecosystem evolve from its infancy, with just a few startups blazing a trail, to today’s robust industry populated by mature marketing technology platforms. And yes, they are now called email marketing platforms, which seems much more grown up and sophisticated.
Deliverability first became a hot issue in the early 2000s, and our portfolio company Return Path emerged as an innovator and leader. Since then, deliverability has remained one of the most important levers for email marketers.
Consequently, the role of the ESP’s deliverability specialist (a job, like many others in our industry, that is extremely challenging and not well known) has become increasingly difficult. Today’s deliverability specialist is tasked with managing more clients, across more geographies, with ever-changing parameters by individual mailbox providers. And of course, like any industry, they face greater and greater client expectations.
Most deliverability specialists have cobbled together their own solutions (such as MTA logs and response metrics) and leveraged solutions like Return Path – although admittedly these solutions are based on the same platform any email marketer would use. In short, deliverability solutions for ESPs could have – and should have – been better.
Recently, Return Path launched their innovative new Partner Platform solution, the first deliverability platform built exclusively for ESPs, with extensive input from their longstanding ESP partners. When I first heard of the development of this product, I was delighted that Return Path had committed to investing in an ESP/super-user platform to address the unique needs of the ESP and their deliverability specialists.
Return Path’s Partner Platform puts deliverability data all in one place, allowing deliverability specialists to see what’s happening across their entire client ecosystem. Information is layered together to provide meaningful metrics and insights across all clients’ programs.
The vast data assets Return Path has invested in, coupled with the ability to slice and dice data, is a game-changer for deliverability specialists.
This is a huge step for the email marketing industry and something that’s long overdue. I’m glad to see that an 18 year old, independent company can continue to make big innovations while growing their business.
Dealing with email is something I have become an expert in out of necessity. While it’s out of control, it’s a chore that is wired into my work in a deep way that, regardless of the explosion of real time communication channels, will likely continue to be the least common denominator for communication for the next 100 years.
That is one of the reasons why I’m interested in seeing the projects that come out of the Context.IO App Challenge, a long-format online hackathon that I’ll be judging in a few weeks along with David Cohen, Fred Wilson, Matt Blumberg and Josh Baer.
Context.IO is a product of Return Path, where I’ve been on the board since 2000. It’s an API that developers can use to build applications that integrate their users’ email data (contacts, files, messages, threads, receipts, and rule-based notifications). We’re expecting to see a healthy mix of inbox management tools along with apps that deliver value in other ways outside the inbox. A few of my favorites that have been built in the past using Context.IO are Mailtime, Paribus or Airhelp.
A common question is if projects from a hackathon can become a successful business. Not all ideas will be winners and it depends on the goals of the event and participants. There is certainly a higher chance with an online hackathon like this one where you have months to build something amazing instead of 24-48 hours. One of our portfolio companies, WootMath, won a similar App Challenge back in 2013.
In some ways, the judging criteria we’ll all be working from are basic questions any founder should ask themselves:
I’m looking forward to seeing what gets built.
Matt Blumberg, the CEO of Return Path, has an outstanding post up this morning titled The Difference Between Culture and Values. Go read it, I’ll be here when you get back.
If you liked that, go get a copy of Matt’s book Startup CEO: A Field Guide to Scaling Up Your Business. It’s one of the books on my list of books all CEOs should read.
Matt distinguishes between culture and values. His punch line, which he reveals early, is:
Values guide decision-making and a sense of what’s important and what’s right. Culture is the collection of business practices, processes, and interactions that make up the work environment.
At Foundry Group, we have a slight modification to how we think of values. Supporting our values are a set of “deeply held beliefs.” These deeply held beliefs tangibly define our values and give us a frame of reference to operate.
For example, one of our deeply held beliefs is that “we will never grow.” Each of our funds is $225 million, we have four partners and no other investment staff, and we work out of the same office we’ve worked out of since we started in 2007. We’ve had opportunities to raise much larger funds and have considered it in the past given a variety of factors. But, we kept coming back to this deeply held belief and realized that raising a larger fund would violate our brand promise of only raising $225 million funds.
Our deeply held beliefs are fundamental to our values, although we are comfortable challenging them regularly to make sure they are deeply held, and make modifications on occasion when we learn new things but only after a lot of thought and discussion, among ourselves and with several of our very close limited partners.
For example, when we started we said “we’ll make around 10 new investments a year.” This came from a belief around the importance of time diversity of investing – we have a three year time horizon for making the 30 or so initial investments in the companies we want in each fund.
Until 2013, we made between 8 and 14 a year, which is close enough to 10 (although the year we did 14 was a year where we all said “too much – slow down.”) But at the end of 2013, when the JOBS Act became official and AngelList created Syndicates, we decided to understand the phenomenon better by participating in it. So, rather than sit on the sidelines, observe, and prognosticate about angel / seed investing, we created the FG Angels Syndicate on AngelList and have done around 60 seed investments in the last 18 months.
Another example of a re-evaluation of a deeply held belief was our decision to create our Foundry Group Select Fund. Until we created this fund, we limited the amount that we could invest in a company to $15 million. We would occasionally go a little higher (the most we have invested in a company from one of our funds, other than Select, is $17 million) but, especially with successful companies, we were limited to what we could do in the later rounds. During a particularly challenging financing for Fitbit, which we believed deeply in at the time as an unambiguously successful company, we were frustrated that we couldn’t write a big check in the financing. We talked to our LPs about what we were thinking, quickly raised a late stage fund to invest on in our later rounds for our portfolio companies, and made our first investment from that fund in the last round Fitbit did in 2013. With Select, we are no longer limited to investing $15 million per company.
Matt states in his post:
“A company’s values should never really change. They are the bedrock underneath the surface that will be there 10 or 100 years from now. They are the uncompromising core principles that the company is willing to live and die by, the rules of the game.”
I strongly agree with this, although I have one nuance. It’s hard to be absolutely correct at the beginning of the journey. So, instead of being dogmatic about values you created when you were three founders in a cafe somewhere, make sure you have one layer of abstraction about how you implement them, that can be tuned over time. For us, these are our deeply held beliefs, which support our values, but can be tuned as we learn new things. But, because they are deeply held, they can only be slightly modified, rather than torn up and replaced.
I get 300+ non-spam emails a day. No matter how diligent I am at unsubscribing from stuff, I still get an endless stream of valid, opt-in email that I want to unsubscribe to. Google takes good care of my spam and they even jumped all over my complaints about their spam filtering, figured out the problem, and fixed it (thanks friends at Google). So, I’m not talking about spam, but all the rest of the stuff that I don’t need to see right away.
I’ve tried to use Google’s categories, but it doesn’t really work well for me. Others are emails I never want to see and want to unsubscribe from, but (a) it takes longer to do that, (b) trying to unsubscribe from a mobile client is painful, (c) many of my unsubscribes don’t seem to work (I just end up seeing the email again in a few weeks), and (d) the whole experience / UI is sucky.
Now, before you jump to “use a different channel than email”, recognize that I have also Slack, Kato, iMessage, Twitter, Facebook, Skype, and Google Hangouts open on my desktop with stuff hitting them all day long. Voxer lights up regularly on my iPhone, along with notifications from each of these apps. Channel proliferation has become a mess for me and one of the companies we are investors in is working on that problem earnestly.
Ultimately though I spend most of my time in Gmail especially given the amount of email I get from all different senders. It is unyielding – here’s an example from last week.
About 25% are emails that I do not need to see right away. Probably 10% are ones that I want to unsubscribe to.
OtherInbox’s Unsubscriber and Organizer solves both of these for me. Josh Baer, a long time friend and leader in the Austin Startup Community, was the co-founder. OtherInbox was acquired a few years ago by Return Path, which I’m on the board of. I used OtherInbox for a little while before and after the acquisition, but in one of my mad Gmail / Chrome plugin-performance-misery-slowdown-cleanup-fits I stopped using it.
Last fall, after playing the endless unsubscribe-to-clean-things-up-each-morning I decided to try OtherInbox again. I went all in this time. Within one week I was in email heaven.
Here’s how it works. If I want to unsubscribe to something, I simply label it “Unsubscribe” using Gmail labels and I never ever see it again. Then, OtherInbox constantly moves new emails that match certain criteria to folders. This happens automatically and in the background it figures out the organization of the emails.
I can adjust it if I want, but I’ve found that I spend almost no time adjusting it anymore. Typically, I have some unreads in there and they show up as unreads normally do in Gmail, so at the end of the day I just go to label:oib is:unread and take a quick look.
Let’s start with a brief history of my investment-led fight against the perils of spam and my never-ending love of SMTP.
We were investors in Postini and my partner Ryan sat on the board. It transformed my life – with one minor change of an MX record some time in 2002 all the spam in my inbox disappeared. Well – it disappeared before it got to my inbox. Or even my server. The awesomeness of Postini was that it was the first cloud-based email anti-spam solution. And it was a beautiful thing that Google acquired in 2007 for $625m.
One of the benefits of our investment in Postini is a life-long friendship with Scott Petry. Scott is the co-founder of Authentic8, which we are also investors in. Scott also sits on the board of Return Path, which is run by another life-long friend Matt Blumberg.
Scott worked at Google for three years after the transaction for Dave Girouard (who used to run all of enterprise for Google and now is CEO of Upstart and on the board of Yesware with me) integrating Postini into all of Gmail’s infrastructure. We continued to use Postini as our spam filter (in front of Gmail) until Google transitioned all of Postini into the Google apps service.
You get the picture. There’s a nice thread through all of this SMTP, email deliverability, and anti-spam stuff in my world, both in investment and relationships. So I generally don’t think much about spam since in the past it just disappeared, or well, never appeared in the first place.
When I came home from my one month sabbatical in Bora Bora, I archived all the 3200+ emails in my inbox. If you missed my vacation reminder during that time, it said:
I’m on sabbatical and completely off the grid until 12/8/14.
I will not be reading this email. When I return, I’m archiving everything and starting with an empty inbox.
If this is urgent and needs to be dealt with by someone before 12/8, please send it to my assistant Mary (email@example.com). She’ll make sure it gets to the right person.
If you want me to see it, please send it again after 12/8.
On Thursday, 12/4, Amy decided to scan through her email so I went to the business center at the St. Regis in Bora Bora with her and did the same. I simply started at the top and “read / archived” each of the around 3,300 emails (using the “[” shortcut). I’m a fast reader so I skimmed the emails I cared about. Mostly I just played a video game with the [ key.I might have had a tropical drink while I was doing this.
I didn’t respond to anything and just ran this drill again early Monday morning to finish up. I then turned off my vacation reminder, had Inbox Zero, and got started again.
Yesterday, I had a weird feeling that I’d missed something that I heard about in another email thread. I was procrastinating from working on the final edits to my new book Startup Opportunities (yes – I’m doing that some more right now, but I’ve got a nice empty day in front of me) so I randomly checked my Spam folder in Gmail. I never, never, never do this so I was suprised when on the first page I saw a legitimate email. I opened it, clicked on Not Spam, and scrolled to the next page, where I saw another one. And another one.
I had 5,500 messages in my spam folder since I got back on 12/8. I went through all off them – it only took about 10 minutes. I found 39 legitimate emails. Not notifications, not email newsletters – but real emails sent to me by people I often get emails from. Here’s a screenshot of the legit ones.
I did my dutiful work and hit “Not Spam” on all of them. I was perplexed and talked to my friends at Return Path who gave me some feedback.
This morning, I had 433 messages in my Spam folder. This time, they all looked like they should.
I’m hoping that this was only a temporary glitch in the matrix. However, I’ll be checking my Gmail spam folder on a daily basis for a while. Boo.
Earlier today, I got a note from Andy Sautins, CTO of Return Path, about the four year anniversary of the Boulder / Denver Big Data Meetup. Andy is a good friend and one of the really strong CTOs in Boulder. It’s pretty cool to see what he and his gang have created around Big Data.
While Big Data is often an overused buzzword, this meetup is about helping people solve data problems in new ways that allow them to build and scale their business faster than ever before. Over the past four year over 1,850 people have joined our group with over 100 routinely attending the monthly meeting.
For the upcoming meeting, Ted Dunning will be talking about machine learning with Mahout.
Pre-orders for the new book Startup CEO: A Field Guide to Scaling Up Your Business by Matt Blumberg, CEO of Return Path, are available now on Amazon. Matt, who writes the awesome blog Only Once (which stands for “you can only be a first time CEO once”) has put a herculean effort into writing an amazing book while running a very large company.
This is the latest book in the Startup Revolution series of books that include Startup Communities: Building an Entrepreneurial Ecosystem in Your City, Startup Life: Surviving and Thriving in a Relationship with an Entrepreneur, and Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist.
I’ve worked with Matt since 2001 when I joined Fred Wilson and Greg Sands on the board of Return Path. At the time I was an investor in a company called Veripost that was a direct competitor with Return Path. Fred was an investor in Return Path. Each company was about 20 people. The founders knew each other well and were in a brutal competition in a market that didn’t yet exist. They decided they wanted to join forces, Fred and I cut a deal over the phone in 5 minutes, and Greg Sands (at Sutter Hill at the time) led a financing round that set a price for the combined company.
Twelve years later Matt is still Return Path’s CEO. George Bilbrey, one of the Veripost founders, is the President. They are incredible partners and Matt is still a first time CEO, but now running a 400 person company that dominates its market.
The book is broken up into five parts:
Matt has the entire outline of Startup CEO up on his blog. As with all books in the Startup Revolution series, it combines practical experience with advice with stories with commentary from other experts.
I think Startup CEO is going to be a must read for any CEO. Do Matt a solid and go pre-order it today.
Over and over again people talk about transparency. Many people assert they are transparent, or are being transparent. Few actually are.
I was thinking about this last night while watching the last few episodes of Revenge: Season 2 with Amy. Suddenly the word “transparent” started being thrown around by the Grasons, referring to their new found desire to be transparent. In this case, it was simply disingenuous – they are transparent only when it suits their purposes and usually as a setup of some other nefarious act they were about to perform (or had performed).
Whenever a word makes it into a TV show like Revenge, you know that it’s lost all meaning. And, as I’ve observed in the world of tech and startups I play in, transparency is used all the time to justify something, but rarely actually supported by behavior.
In the “everything that is old is new again” category, the master of transparency, and likely the originator of “open book management“, is Jack Stack. I remember meeting Jack and hearing him talk at the very first Birthing of Giants event created by Verne Harnish in 1991. I read Jack’s book – The Great Game of Business: Unlocking the Power and Profitability of Open-Book Management – about his experience at Springfield ReManufacturing Corp – and was blown away by his thinking. My first company – Feld Technologies – was definitely not run with an open book and Jack’s ideas were very provocative to me.
Over the years, several CEOs I’ve worked with have been incredibly open book, or – if you want to use today’s lingo – transparent. My two favorites are Matt Blumberg of Return Path and Rand Fiskin of Moz. Matt shares his entire board book after the board meeting with everyone at the company (now over 400 people). He’s been doing this since the beginning, and only redacts specific compensation information and occasional legal stuff. Rand shares – well everything – including one of the best, most detailed, and completely transparent posts about a private company financing in the history of private company financings.
When an entrepreneur says he’s transparent, I now ask “do you publish your board book to your entire company?” I view this as a benchmark for transparency. If the answer is “no”, then I ask the entrepreneur what he means by “I’m transparent.” If you can’t be open with your company about the information you report to your board, how can you actually be transparent?
Today, Return Path launched three new products and reframed its business as “email intelligence.” Matt Blumberg, Return Path’s CEO has an excellent post up titled Email Intelligence and the new Return Path.
Return Path is an extraordinary company that I’m proud to have been involved with for the past 12 years. At our board meeting last week, Matt gave me and Fred Wilson our 12 year anniversary gift – a pair of red Return Path-branded Adidas sneakers. I still vividly remember the phone call Fred and I had where we cut a deal to merge two nascent companies – Veripost and Return Path – in what became Return Path. We cut a deal in 10 minutes – I offered up a 50/50 merger and Fred suggested he wanted a little more since Return Path had raised 3x the money Veripost had. I responded with “how about 55/45” and Fred said “it’s a deal.”
Twelve years later Return Path is company with over 300 people, major offices in New York, Boulder, and the Bay Area, and other offices around the world. It has created and leads an entirely new category we call Email Intelligence. In 2008, after plenty of forward progress as well as some twists and turns, we finished divesting several older lines of business and focused the company entirely on a new category we created called “Email Deliverability.” As we grew, we expanded the definition to the point where the word “deliverability” only covered a subset of what we did, hence the creation of the category of “Email Intelligence.”
Matt says it extremely well in his post:
“Our solution to these problems is email intelligence. Email intelligence is the combination of data from across the email ecosystem, analytics that make it accessible and manageable, and insight that makes it actionable. Marketers need all of these to understand their email performance beyond deliverability. They need it to benchmark themselves against competitors, to gain a complete understanding of their subscribers’ experience, and to accurately track and report the full impact of their email programs.”
I’ve been investing in and around email since my first email-related investment in 1994 in a company very creatively named “Email Publishing” which was the very first email service provider. Since then I’ve had a number of investments in email companies including Critical Path, Postini, and SendGrid. I’m psyched with the success and leadership of Return Path to date, love working with everyone at Return Path, and look forward to continuing the journey as we work to ensure that inboxes contain only messages that users want.