While I was getting caught up on my business reading during a recent flight, I came across a very interesting article in the June 9, 2008 issue of Fortune Magazine called “Lessons of the Fall,” by Patricia Sellers.

It was fascinating to read the back-story to some of these high-profile CEO ousters and the dynamics of the CEO and their respective Board members. The article covers three well-known CEO’s who lost their jobs involuntarily: David Neeleman, founder of JetBlue, Jim Donald, former CEO of Starbucks and Ed Zander, former CEO of Motorola. First, kudos to Fortune Magazine and writer Patricia Sellers for pulling together this story. How lucky are we to be able to read about these men and learn from their mistakes?

What I found most interesting about this article was the honesty that all three executives displayed when discussing what is surely a highly personal, pivotal and emotional period in their careers. All three executives were at one point “high-fliers”—so getting them into a room to talk about their toughest day and outline their lessons learned presents an amazing educational opportunity for management-types. And, of course, I was intrigued to read lessons from other graduates of the School of Hard Knocks.

Here is the free advice that I was able to extract from these three senior executives:

• Communications: Keep your key constituents updated. If you don’t, they will draw their own conclusions.
• Invest abroad to grow and hedge.
• Get inspired in the field. Prospects really do know what they need – and, they’ll tell you for free. Just ask them.
• Move fast on people, whether it’s hiring or firing. Great talent makes or breaks a company.
• Focus on building long-term value. Focus on the decisions that reinforce your long-term strategy.
• Admit your mistakes. Explain them and move on.
• Ideas are good. But execution is everything.

In addition to the information above, I found some other very nice pieces of free advice sprinkled throughout the article from the likes of Ted Turner, Martha Stewart and Oprah Winfrey:

• Keep taking risks.


• Don’t let doubters get you down.


• Seek a purpose.


• Visualize the next big win.


• Learn from your mistakes.


• Remember: Failure can be temporary.

I enjoyed the simplicity of the article and the nuggets provided by all three executives. There weren’t any new, ground-breaking management theories outlined in this article, just good-old fashioned, tried–and-true business tenets. Lessons learned from The School of Hard Knocks.

There are 210 billion emails sent each day, 80% of which are SPAM. Startling statistics, for sure. So, what are companies to do?

It was funny to hear this NPR interview during my morning commute last week. Well, maybe “funny” is the wrong word, but I found myself intrigued. Here I am in Silicon Valley, leading one of the most innovative, on-premise email solution providers that serves the world’s largest corporations, and I'm listening to a radio interview with the rank and file complaining about email. It’s similar to a head-coach listening to a post-game interview from a sportscaster and a fan.

Email continues to be a conundrum for consumers, leading some to delete their entire inbox as they declare a state of email bankruptcy. So, what to do? Well, our prospects and customers think they know part of the answer - build relationships.

Forrester Research issued a report in April called, “Break Free from Bad Email” and introduces the notion of Intentional E-Mail:

“Using email for only-short-term revenue gains is myopic. Instead, marketers should use email to improve customer relationships and grow their long-term value. Doing this requires a combination of best practices: integrating data from external sources, targeting based on past behaviors and calculating the business value of an email subscriber.”

Many of our prospects and customers realize that the relevancy and frequency of email is important. More and more companies hope to address this by bringing email in-house and centralizing email streams—giving them the visibility and tools needed to pull email out of Chapter 11.

Innovation or iteration? I’m sure that most of you have heard the phrase, “The New, New Thing.” If not, it’s one of those Silicon Valley phrases that is typically asked by an investor, most likely a VC, that is intended to make you stop and think about your company’s next move. Plainly stated, it means, “What new technological (or market, business model, adjacent technology, etc.) innovation is on deck within your company that will leap-frog your competitors and propel your company into the future?” This is a tough question for any CEO.

The problem with forcing “The New, New Thing” onto your organization is that these big leaps are distracting, destabilizing and unrealistic. I’m a fan of iteration—the long, steady march of building something from nothing. Making good on the promise of your original business plan. The sustained, laser-sharp focus of being the best and owning your market segment—by listening to your prospects and customers closely and taking note of their needs, worries and requirements—not only now, but five years from now. Most importantly, by truly understanding your prospects' and customers' businesses—this iterative process builds on your core strengths and technology platform.

We know this first-hand here at StrongMail because our product road map is driven by our customers. They’ve asked us to build the world’s best commercial grade, on-premise solution for marketing and transactional emails.

It’s amazing what happens when you listen to what your customers want.

On a recent flight to Atlanta, I came across an excellent and relevant article in the February 18, 2008 edition of Fortune Magazine called “Ram’s Rules: Managing your business in a downturn," written by Ram Charan, a well-known and widely respected author and management guru. The entire issue of the magazine is focused on understanding the state of today’s economy and what it means for businesses.

I was recently asked by our investors about the state of the economy and the impact on our current business. Are we recession-proof? Recession-resistant? Tough questions for a CEO, indeed, especially since my trusty crystal ball has been in the shop for the past 20 years!

I've spent a lot of time thinking about the state of the economy and its possible impact on our business, and it really bugs me that it's impossible to answer that question with any certainty. Fortunately, I do know that we’re being prudent about our spending and hiring and matching those directly to our operating plan. And I believe that we have a good process in place to monitor key data points from our end.

As I consider these questions, Mr. Charan’s article has helped me put a few things into perspective and, more importantly, validated several lines of thinking that I feel are important in running a business.

Keep building
Mr. Charan outlines several very reasonable points to keep in mind. In uncertain times, you’ll feel tempted to cut discretionary spending – just be sure not to include Product Development, Innovation or Brand Building in the “discretionary” spending category. He goes on to say that if you keep building, you will come back strong. During tough times, it’s important to reinforce your core values, and being a high-technology company, StrongMail's core values center around product development, innovation and engineering excellence and loyalty.

Communicate intensively
During uncertain times, getting accurate data to the operating folks is imperative to make fast, correct decisions. Where’s the best place to get this information? From your customers of course! Speaking to your customers’ customers may give you an even better picture of what’s really happening out there. This is a great point, and I'm going to ensure that StrongMail does more of this.

Evaluate your customers
Mr. Charan states that in good times, companies manage the P&L; in bad times, cash and receivables matter more. As a company that is gaining momentum (e.g. maturing), that is something we’ve always tried to do, but haven’t yet perfected. Acquiring customers is paramount to our success, so balancing customer acquisition with identifying high-risk, cash poor customers can be tricky.

Just say no to across-the-board cuts
Finally, this is a good time to look at and clean out your company’s “attic.” Mr. Charan endorses having a purpose and a plan for cutting specific expenses, but not across-the-board cuts. This makes sense since it augments the “keep building and investing” section above.

Overall, these are relevant pieces of advice that reinforce the fundamentals of growing and managing a business. There is no magic wand advice here, but good old-fashioned blocking and tackling. This was a great refresher course for me. I would love to hear from others on how your companies are looking at (and what you’re doing) during these uncertain economic times.

Athletes. Every start-up CEO in Silicon Valley wants to hire athletes. You know—the competitive, smart, team-playing professional that can lead, get the job done, and move the business forward. But with companies like Google, VMware and Yahoo hiring everyone under the sun, how does a small company attract the best talent possible in Silicon Valley?

I was asked by a reporter recently, “How do you attract quality employees and what do you do to motivate them?” First off, I speak to a lot of people. I’m always chasing down leads on talent. It’s hard and takes a lot of time. In fact, I just returned from a conference, where I spoke to a number of people - and I know that we will hire at least one person, and possibly two, because of the opportunity I had to share the StrongMail story. Not a bad investment at all.

The best way to attract quality employees is to:

• Talk to a lot of people for leads and networking, even your competitors. \
• Outline your company’s vision and why you will be a winner.
• Outline their potential role within that vision. \
• Outline what you, as the leader of the company, are doing to get the company there.

We have a unique culture here at StrongMail. Talk to anyone on my team and you’ll quickly find out that things change regularly. One reason that we’ve been so successful at hiring great talent here is because of our culture of allowing people to change things up. We like to get a fresh pair of eyes on old problems - and new challenges. In a start-up environment, it’s important to have your athletes stretch their comfort zones.

Think of it like this, if someone is usually a quarterback, either one of my executives or I would propose that this person play free safety for the next two quarters. This way, the person will get exposed to a new set of challenges (which incidentally, can solve many problems with a new pair of eyes), round out that person’s experience, and continue to be challenged. I’ve found this to be not only invigorating for the team as a whole, but very motivating for the athlete.

I feel very fortunate with the quality of my team here at StrongMail. On my management team alone, we have a handful of execs who could easily be CEO’s of their own start-up companies.

More later.

Back in 2003, I created a LinkedIn account. The concept of social networking for business people intrigued me. Frankly, I’m not sure why I was so intrigued, because at that time 1) I wasn’t very social (more on that some other time) and 2) I hadn’t been working for two years, and I had no intention of ever going back to work – at least not going back to work for somebody else.

I dutifully filled out my biographical information for my profile and then came upon the "Education" section of the profile. Without really thinking about it, I entered "MBA, School of Hard Knocks, Start-Ups" — sort of a tongue-in-cheek statement, based on my experience of building and managing a large piece of business from practically nothing, here in Silicon Valley.

During my career at BEA Systems, I was fortunate enough to lead and work with many talented individuals (almost all of them with either an MBA Degree or a PhD). Since I had neither, I felt obligated to put down something intriguing in the “Education’ section of my LinkedIn profile.

During the “Dot.com Revolution," we were collectively writing a book that had no precursors—making a ton of mistakes, running into barriers, hiring the right (sometimes wrong) people, learning to be agile and most importantly, learning to do things that haven’t been done before. Now, add to this a mad rush of hundreds of thousands of enterprises trying to get to the Web to take advantage of the Internet and online commerce. And the part that freaked me out the most? That MY TEAM was supposed to show them the way!

Sure, we made a lot of mistakes. Just to give you a taste of the madness during those early days—here’s my favorite quote from an angry customer, a very influential CTO at one of the top three newspapers in the U.S.: “Sam, how do you spell your last name? Because if we aren’t up and online by midnight tonight, your name and picture will be on our front page tomorrow morning.” I never so badly wanted to NOT BE on a front page before.

So what’s the point? Simply put, start-up companies trying to define a market when none exists is hard. Real hard. And experience counts. The more experience, the better.

Oh, I almost forgot to tell you why I started writing this entry. I’ve received about a dozen emails during the past year from people around the globe asking me about my “Education” entry on my LinkedIn profile. Many of those emails started, “Dear Sam, I am also a graduate of The School of Hard Knocks…” I always thought that was kind of funny.

I would enjoy hearing your comments. Are you an alumnus of the School of Hard Knocks? Leave a comment here on the blog or drop me a line: sam@strongmail.com