The Post Money Value

Thank You, Carol Bartz

Right on cue, post my rant on the circus that is Microsoft HR, we have Silicon Valley Investor with a post about how Carol Bartz, the new CEO of Yahoo! handled firing somebody.  Culture. It starts at the top.

"Yahoo's new CEO Carol Bartz is even admired by those she canned.  Here's an email sent to Kara Swisher by a former Sun employee:"

Read the rest here. [Kara Swisher]

Culture and The Leaked Memo You'll Never See

[Warning - could be viewed as a Rick 36,000ft Rant]

I'm sure you've read about the Microsoft screw up with respect to severance payments to former employees. Some got overpaid, some under. There was a firestorm of bad press over Microsoft asking for some repayments and then, duh, in the end Microsoft relents and let's them keep the rounding errors. All this is no surprise to anyone with a pulse who has worked in a company with a headcount over 2.  No surprise they would goof it up, send out letters, take PR hits and then give it up. 

In fact there were only two things that actually surprised me.  First, that any former employee lost a second of sleep of a possible repayment. They had to know the resulting PR shit storm was going to them pocket the cash. And I'm in no way trivializing the impact of this insensitivity dumped on them by Microsoft.  Secondly, that one of the more mainstream blogs didn't start a public pool on letting people buy the exact time Microsoft would issue the press release letting people keep the money.

This was a text book, pay phreaking attention, case of how a company's culture starts at the top and will kill a company if the culture goes bad. Arrogance, smug insular multi-millionaires fiddling while Rome burns, political MBA animals, etc, etc, all builds up into a culture that creates these disasters.

HR software systems don't create people disasters, people do.

Up close and personal: There is a company down the street who had to lay off some people. They made the *EXACT* same mistake resulting in an overpayment to several people.  The accounting person caught it and went to the CEO.  The CEO said let it go, these people have enough problems in this environment.  Culture.

You can believe (I guarantee it) somebody in a cubicle up there in Redmond suggested to "let it go" because it was "a rounding error" and "we shouldn't throw salt in an open wound."  There is a reason for those quote marks. My guess is somebody is likely to post a comment on Mini-Microsoft's blog about this. Hmmmmm....

Culture.

Here's the "leaked" memo you're not likely to see anytime soon:

---------------------

From: SteveB

To: LisaB  [Lisa Brummel, MSFT HR Chief]

Subject: are you kidding me!

ok, so let me see if i have this straight. we have a run of the mil accounting error probably because somebody innocently messed up some dates and it cascades into an unnecessary pr nightmare over less money than the travel budget to the ces show.  are you kidding me?  are you telling me we have a culture in your hr department that is so bureaucratic, uncaring, dripping in legal nonsense, and simply insensitive that nobody on your staff or your staff's staff could say let it go?  not one of your people had this synaptic activity? or is more likely that an employee did figure it out, did make the let it go suggestion, and your group of so-called hr management experts acted like a bunch of drones listening to some idiot lawyer about some 1 in a billion chance we might end up having some random other claims for some additional miniscule amount of cash instead of acting like humans.

how about we, via mini-microsoft, get a copy of the email that was no doubt created by one of your more caring people. you know, the one where they make the simple yet ultimately brilliant suggestion that we let it go.  let's find that person and promote them.  to your job.  i promise when you get overpaid on your severance, they will let you keep it.

this disaster was the result of a bunch of people who worried more about bureaucratic crap versus the human beings and the lives we disrupted. if you can't reset the culture inside the hr department, it really might be time for a change. 

and if you think you are getting these let's not care messages from me lisa, you are wrong and we are severely disconnected.  we need to speak immediately.

-------------------

Obviously, I'm being melodramatic and somewhat bombastic to make a really important point.  It's about Culture and Tone when times get tough.  I believe somebody should be severely reprimanded over this issue and let THAT memo leak. Should they fire Lisa Brummel?  Somebody needs to take a hit. I'd settle for an offer of resignation and some people re-assignments. There was an HR lawyer involved and, for sure, this got attention inside HR management.  No "clerk" just pressed the button. 

I doubt the chief legal officer and for sure the CEO had a clue what was about to happen which is the precise reason why having the right tone/culture inside a company is so important.

Some lessons out of this for your start-up:

You set tone. I repeat, you set tone.

If you are a jerk, it will catch with you and, over time, you will be hiring and cause to be hired jerks.  Jerks is the placeholder for all of those political animals, etc, etc, that infest companies as they grow. You must be vigilant about this.  My best advice: Management by walking around.  Talk to the rank and file. If they appear skittish, don't want to talk, stutter a lot, you've got a problem.  In the companies that I manage for my our fund, if I can't walk into the company and plop down with anyone for a chat without management phreaking out, there's a problem.  Oversimplified, yes, yes, don't flame me.  My point is YOU have to be able to do that. If you drop in on some coder in the back working on some piece of something and chat it up, does the manage coming running over or ignore you?  Yeah, it does matter and it will set tone.

It is a reasonable bet that somebody in HR who thought this was wrong, insensitive, and a probable PR disaster did not send an email to the HR leader, the CEO, etc, with an are you nuts? For $125k? email.  That's a shame but that's what happens when the culture goes south.

Make a mistake: own it.

Here's an excerpt of the MSFT announcement when the light finally came on:

"Last week, 25 former Microsoft employees were informed that they were overpaid as a part of their severance payments from the company. This was a mistake on our part. We should have handled this situation in a more thoughtful manner. We are reaching out to those impacted to relay that we will not seek any payment from those individuals."

My view? B+.  Once the world was effectively watching this soap opera, it's time to crank up the humans, not the PR machine.  Lisa Brummel, personally calling each person, nice move, but let's take some responsibility for letting the situation develop in the first place.  How about Microsoft's general management group ignoring office politics to have a collective hissy fit resulting in the CEO stepping up to the microphone and eating a mea culpa sandwich. Reminding the HR department to always "err on the side of our team mates" or some such sends a much more important message that a press releases.  The traditional, just make it go away, reaction is understandable but when these things happen, you can use them to try an make a point to the company about values, culture, etc.

Remember, this is not about a group of people making math errors. This is about the environment that reacts to the resulting mistakes.

What kind of environment (aka culture) do you want for your start-up?

[Note: A rant like this calls for a reminder disclaimer that I used to work for Microsoft so I'm either an unpaid shill or disgruntled ex-employee, your mileage may vary.]

Be a Trendsetter: Use BCC early and often

Has this ever happened to you?

• You introduce person A to person B in email.
• Person A emails thank you and then dialogs with person B. (Reply All)
• Person B emails a response with some times to chat. (Reply All)
• Person A picks a time and asks for directions to the lunch spot. (Reply All)
• Person B responds with directions pointing out they are a Vegetarian so the lunch meeting at Bob's Big Boy Burger is fine but don't get offended if they bring their own Tofu. (Reply All)
• Person A responds with a long story about falling into a vat of Tofu and since being rescued by the Tofu Vat operator, has sworn off Tofu, Jello, and sponge cake. (Reply All)
• You go nuts and email in all caps: TAKE ME OFF THIS FCUKING EMAIL THREAD! (Replay All)
• Both people now think you are a putz.

Yeah, or some variation, right?

So, start a trend.  When you are on the receiving end of one of these, reply but put the original person who sent you the mail on Blind Carbon Copy (BCC).  This way they know you got the mail and are acting on it but don't have to deal with the resulting thread. Less mail all around which is always a good thing.

Remember: "Reply All" can be evil and BCC is your friend.

Pass it on; the inbox you save may be your own.

Change: No Actually They Will Not

In the past several days I've seen some very interesting business plans on new services. They all seem to have this central theme about changing people's habits.  A new email thing requires a user to create special folders and categories before the service thing works. The 'thing' was really interesting and really good.  Another one was a hyper-local search gizmo that required a habit change about how you searched with special keyword modifiers.  The results were really good.  Another one was using the mobile phone to automate some tasks which also required a change in how the phone was configured (which impacted phone calls).  The results here were also really really good.

In each case, I asked the simple question: How are you going to get people to change their habits and do what you are asking?  The answers were, at best, weak but more importantly, it pointed out (at least to me) that lots of folks are not factoring in what it takes to actually change somebody's habits.

Consider this massively unscientific study I did in January as part of a class I was teaching.

I asked three sets of 20 people a variation on the issue of closing the bathroom door when you gotta go.

Variation one: You are home along, do you close the door when you gotta go?

Variation two: You are home along with just your cat, do you close the door when you gotta go?

Variation three: You are home along with just your dog, do you close the door when you gotta go?

In almost all cases I got yes answers. Some were funny (I don't want the cat/dog 'getting involved') but most positives were, yeah out of habit.

You aren't Microsoft trying to get the Google habit changed and you've seen how that's going; you are a start-up. 

As you think that business plan through, ask yourself what can you do to minimize the disruption of customer's habits.

Score One for Dead Trees

That wild and crazy guy, Howard Lindzon, has a new book out called "The Wallstrip Edge" which I'm sure will be excellent.  It's available and shipping from Amazon if you'd like to buy a printed company. In fact, click here to buy it and help Brad Feld buy a new pair of running shoes (it's his affiliate link).

But if you are, like me, of the Kindle variety you have to wait. Yeah, seriously.  The printed copy was available before the electronic copy.

 

Let me just say I don't care what excuses, systems, or other nonsense Amazon will come up with to explain how the printed copy can come first.  As far as I'm concerned a whole bunch of people should be embarrassed.  This isn't exactly moving along the digital highway.  Stupid. 

Helping Your USA Geek Friends (COBRA)

I'm getting ready to hit the ol Red Eye back to Toronto from San Francisco. It's been a pile of meetings with tons of people.  I've seen some really amazing technology and some opportunities I hope I can jump on.

One thing had stood out: The wreckage and shutting down of lots of start-ups and not so start-ups, ie those who have been around a bit but didn't make it. 

In speaking to a number of folks, many talked about being able to use COBRA Benefits the major problems being encountered. 

[Warning: Skip this Blog Post if you are not in the good old US of A]

COBRA stands for Consolidated Omnibus Budget Reconciliation Act. Yeah, that's the first problem but moving on....

I hope you never have to deal with this thing but: COBRA was an act of congress designed to do a bunch of things but with respect to Healthcare, this was designed to try and give people who got fired or laid off an opportunity to purchase the healthcare benefits, if any, they had at the time of job loss.  It was generally cheaper than going out on your own and offered some limited protection with continuation of benefits and coverage in general.  You essentially paid the full cost of the group plan (you part and what the company paid) and you kept the benefit.

There are a number of problems which are exacerbated in hard times.  First, the COBRA option only lasts for a limited period of time, 6 months or a year, I can't remember.  The second and most problematic issue is this:

If the company shuts down, goes bankrupt, etc, the benefits plan dies and the COBRA option for impacted workers is eliminated.  My guess is the original plan got watered down by a bunch of industry lobbyists.

Here's what you can do.  Immediately call, write, or email your congressman and urge them to introduce a bill that modifies/amends the 1986 COBRA health benefits provisions to do the following:

• Extend COBRA benefits for 24 months
• Require Group Health Plans to offer COBRA to all plan participants in the case of the company ceasing to exist. In effect, if the company goes bust, people can still buy health care at the rate the company was paying for it.
• Require Group Plans to retroactively offer COBRA to those impacted by layoffs during 2008. This is especially important given the carnage of Q3/Q4 of 2008.

Here's the thing. This costs the taxpayer ZERO.  No TARP, no Bailout, nothing. We just require the group health plan operators who want to operate in the US to cough up some extend opportunities for laid off people to pay for health coverage.

Write your congress type today; the geek you help may be, well, you.

A Different Kind of Camp

[Caution: Possible long Rick Rant, use care]

[Note: I wrote this last week when I was up at 4a for a down and red eye back trip to San Fran before getting on the plane, so it is out of sequence with other, more cheerful posts]

Bar, FOO, Demo, Start-Up, Employment, etc, Camps.  You've heard/seen and maybe attended one or all.  I'm mean, lord, there is even a presentation camp!

I'm here at Toronto's airport getting ready to head out to SFO, do the meeting cha cha, and redeye back home.  So, last night I put some gas in the car so as to get those extra few minutes in bed.  The exact moment I was done and rolling out of the gas station, poof, I get a text alert (AskKinjo) telling me gas is dropping a full 5 cents for Tuesday. Great. Super helpful. Not.

This got me to thinking about technology really still being light years away from actually providing serious day to day help.  This, in turn, got me to thinking about a camp we should have called something like: "Fixing-problems-that-annoy-many-people-with-solutions-they-might-pay-for Camp."

The general parameters would be something like:

We run a contest for the most pain in the butt things we wish technology could do for us. Like track gas prices but link/sync it to my car's gas tank, mileage, usage forecast, whatever, etc, so I time it better. We cull the list down to, say 10, based on reality, doable, etc.

We rent out some big spot like a hotel ball room, unused sports stadium, etc; starting camp Friday and running through 8am the following Monday.  For 48 straight hours, we have hundreds of code teams go at it.  On Monday, at 8am, we judge the results, show demos, and (this is the good part), award prize money, have beta sign ups open.  All the "A" list types can show up, pontificate, judge, whatever, so long as that the end of the session, we have a bunch of solutions out there that should delight a large number of people.

This isn't an incubator, Y (or X) combinator, or Tech Stars, or Demo, or any of that stuff.  The value here is super star programmers solve some problems win some cash, get known, (likely snapped up) and people get some problems solved. This isn't an attempt to create VC investable companies but VCs love super stars so it might be a way to identify them for the next fundable gig.

I'm being only partially funny here.

We live in an age where lots of people are wired up, always on, and always connected.  We have piles of data sitting on hard drives worldwide that contain essentially 'everything'. We have technology that can turn the heat on before you get home, video watch the crock pot to make sure it isn't boiling all over the counter, etc, etc.  Yet the list of really useful services and solutions that fully exploit the technology we already have is, sorry to say, woefully small.  We need to motivate all these super brains and point them to problems to solve which in turn will hopefully lead to even greater things from them and for us.

An interesting scenario:

As I type, the snow is coming down. Hard. Lots. I can't see the Jetway from the gate's window, it is snowing that much.  Chance of this plane leaving on time? Exactly zero.  The 'board' shows an on time departure, of course. The gate agent is pretty much saying there is no update, etc, etc.  So, clearly, there are going to be cascading effects to a late departure.  They might be minor or they might be a seriously big deal but, for sure, this Airbus is not leaving the gate on time.

As I mentioned, I'm heading into San Francisco for meetings.  I have a car picking me up, lunch reservation for 3 at Veggies-R-Us, and blocked off meetings all the way up until the car picks me up and plops me back at the SF Airport for the redeye home.

The data piles:

• Weather history/movements for years on file.
• Flight delay history for years.
• Live flight planning data
• Live Air Traffic Control data
• Live traffic in my home town and destination data
• My schedule
• The other attendees schedules
• Email/Phone contacts of the people I'm meeting with.
• The opentable reservation in my schedule and my guest's schedule via Tungle which is doing an amazing job of helping me let people pick times off my schedule. 
• Addresses of the places I have to be
• My email history (forever in my case)

The connection realities:

• The car service has phone/email
• The meeting attendees have email/phone/SMS
• The restaurant has email/phone/'Internet' (via OpenTable)
• My, glued to my pudgy butt, BlackBerry device is on all the time.

Ok, got all that?  Now, using only what is doable and reasonable, here is technology nirvana:

Somewhere around 4a while I'm still sleeping, HAL has already twigged himself that trouble is brewing. There is a snow storm which, based on live radar, is going to be on top of the airport right about the time I hit the departure area.  Further analysis shows this snow storm is going to cream the drive to the airport which, using history, means I need to adjust my drive in.  HAL adjusts the alarm clock calculating my drive time, shower time, etc, and arriving at the adjustment.  This schedule item is now classified as 'at risk'.  HAL knows to send a "at risk" alert to my meeting attendees giving them a just in case notification.

I make it to the airport, beating traffic and the snow rolling into the area, get through customs and security only to see that shiny status board with "on time" on it.  The snow rolls right up onto the airport and <kaboom> we're in the middle of a blizzard. The GPS enabled BlackBerry knows I'm in the gate area but not on the plane. The airline system knows I haven't boarded.  Plus the live weather systems know the airport is getting pounded with snow.  And on top of all of this, it is past departure time.  Using the same systems the flight navigational systems use (winds at altitude, speed, etc, etc) plus all of the aforementioned data, HAL can pretty much predict what's happening. 

You know where this is going, right?  Schedules start talking to each other. The car service starts tracking the flight, HAL is ready to cancel/adjust the Vegfeast.  Why am I sending Eric, Matt, and Adam a note giving them a heads up?  Let the email systems do it. Slide the schedule forward 20 minutes or, if we have a 90 minute delay, bag the restaurant and recommend some delivery to the first meeting place.  And on and on.

While lots of things may not be a VC 100 bagger, I passionately believe that if we attack these 'duh' things, we will simply get smarter, customers will want (and pay for) more as we give them "ah hah" moments of sheer delight.

Then all this technology will start to help all of us with the real world hassles of a cranky ass dragged out of bed only to see his day turn to crap and having to spend tons of thumb time on the BlackBerry sending notes, looking at weather, guessing at traffic, etc, etc.

 

[Afterward: I was 45 minutes late, traffic into San Francisco was a mess, lunch was brutal (Tofu Pizza, are you kidding me??), my meetings were crammed together with me rushing everybody, and the guy FIVE ROWS BACK on the red eye home was snoring that loud for 4 hours straight.]

[Disclosures: We have an investment in Tungle. My partner is on the board, the CEO is a a friend and owes me twenty dollars.]

[Plea: Please don't go to Presentation Camp. Please spend the time just telling me what you do, what problem you solve and how everybody makes money.]

Dispatches from the Eastern Front

One of my friends decided to head out on his own.  I got an update with the good news about revenues paying the bills and him being pretty happy/pumped even in this world we are currently living in.

He did have this "Bad News Section" as well which I thought was pretty well articulated:

"The Bad News

Relying on organic traffic is like living with an abusive spouse.  You bend over backwards trying to please Google, but it never tells you what it really wants, just randomly attacks you (i.e. drops you from the search results) - sometimes with reason, and sometimes without.  After a while, you start feeling lucky just to be ignored.  One of my two main revenue-generating sites felt the back of Google's hand a couple of times in January.  It appears to have been just normal growing pains (newer sites can bounce around in the rankings for no apparent reason), but it really highlighted the risk inherent in this strategy.  Right now, my top two sites bring in three quarters of my revenue.  That's way too much concentration.  I need to put more time into ramping up the other sites, and make the business more resilient."

Heh. Go get em!

Memo to Self - Buy a Magnet

via Geek.com, it appears that a study was done and 40% of all old hard drives when sold contain sensitive data when sold.

Yikes!

My Little Question to the Feds

I love Paul Kedrosky's blog. Pay for it? Sign me up. After reading his observation about Congress, I got to ciphering.

His opening:

"Over and over again, Congress manages to do the impossible. This time around it has somehow made Wall Street CEOs … sympathetic."

So, I'm thinking: Who came up with the acronym TARP (Troubled Asset Recovery Program)?  I mean really, don't you want to know what group of faceless bureaucrats (FB) sitting in a windowless conference room thought this up?

FB1 "So, ah, we need a name for this taxpayer thing we are about to do. It's gotta be catchy."

FB2 "Yeah, right.. Errr, we've got a pile of shit from a bunch of screwed up banks run by a bunch of drunken sailors on shore leave. What can we do with that?"

FB3 "Okay, using shit it out of the question but shit comes from butts so we can extrapolate that into ASSets and we are in serious Trouble so bingo two words down!"

FB4 "Sweet! Drunks at a brawl need a recovery program so, there it is baby, Trouble Asset Recovery Program! We've put a TARP on the problem.

FB1 "Oh yeah, gimmie five. Lunch anybody?

So, Daddy, what did you do during the recession?  Named it, son, named it, now eat your broccoli.

How not to use Twitter

I'm know I'm  late to this bun fight, but I'm never one to pass up textbook cases on how NOT to use technology.  My good bud and building mate, Mark McQueen offers up some entertainment regarding the really swell interchange between a reporter and a marketing consultant.  Yikes, a reporter vs somebody who knows how to spin it for a living. Talk about an unfair fight.

The teaser:

"As unlikely as it is to imagine, I feel the need to come to the defence of National Pest tech reporter David George-Cosh. If you aren’t one of the fewer than 100,000 people who obstensibly subscribe to that dying poster child of the DTM (Dead Tree Media), you won’t likely hear tomorrow that his employer apologized earlier this evening for Mr. George-Cosh’s egregious Twittering, under the name “Sir David” of all descriptors. It seems as though Mr. George-Cosh was having a bad day, and took it out on marketing consultant April Dunford. Four letter words and all."

Mark really is a big fan of newspapers, don't let the opening fool you, head over to his place and read this; hilarious.

The Post did apologize here and, go Canada, we made Valleywag.

Truth in Presentations

A guy is starting a presentation in my office right now. He just took off his coat to reveal a black t-shirt with the following:

"I hate doing this shit"

Gotta admire the spunk.

The Nonsense that is Leaked Email

Fact: Nobody, including new Yahoo! CEO Carol Bartz, wants email leaks to stop. This hype, pure and simple; making for great PR.   

Let's start with this interesting solution/idea which arrived in my email:

"After the person hits the send key, the email goes into a magic piece of software which adds a sentence, changes a comma, deletes a word, etc, such that the email can be 'custom' to each person.  60,000 custom pieces of email from one missive? Trust me, I'll throw some MIT misfits/dropouts* at it and have that pesky detail solved in an hour."

Ok, "Nobody" is probably an overstatement on my part, and the above would only apply to emails printed in their entirety, but you get the larger point, right? If we/they really really wanted to solve this problem, we could. 

My personal view is that if Carol Bartz actually believes you can send "company wide" email and expect zero leakage, the entire VC community should immediately unload all the looser/dead/Brooklyn bridge/swamp land portfolio companies on her and Yahoo! cuz that is serious fantasy land thinking.

*I've recently had the good fortune of spending loads of time with a bunch of brains who 'dropped out' or 'just need a class or two but are busy' types from MIT so I can appreciate this comment.

Well Said

Brad's latest post is dead on: "Play to the point, not the score", go read it and then tape it to your wall.

ClickTale - Nicely done

ClickTale (thanks, Adam) is a web analytics application that has a great one-two punch for small start-up.  First, the home page is pretty much text book correct. There is a great video, key points, and call to action all right there.  The video gets to the point quickly, shows off cool features, and while 'no frills' doesn't drop into the "zzzz" category of goeverywhere; it's really nicely done.

The second thing they do well, in my view, is combine a good blend of free/paid. 

While I didn't clip it, when you go to the web site, you will see the features chart which basically gives the blogging community enough serious value to talk nice (assuming they use/like it) about the product while at the same time tightly targeting customers they want to sell to.

This is a great example for your start-up. The home page, call to actions, and pricing are three tough balancing acts.  These guys do an excellent job of that balance.