The Kuhn Connection

(Or what a scientist from 1962 can teach us about ad tech in today.)

In a moment of frustration after meeting some potential tech partners who seemed not to sense that going forward, ad tech will be about the “how” – not the disruptive “wow,” I wrote a post in Ad Age explaining the importance of operational structure in ad tech: “Here’s the only marketing trend you need to know for 2016”.

While my arguments were lost on the tech folks, the article struck a nerve with Ad Age audiences because it expressed a deeply felt marketer frustration that tech is just too damn dominant in the ecosystem, making a marketer’s job just too hard.

I go on to suggest ad tech is overdue for a “paradigm shift” itself that can disrupt the colossal mess of complexity, fraud and technological black boxes that is now ad tech.  My conclusion is that in 2016, “…marketers will replace the “awe” of algorithmic magic with awe-inspiring new questions about how (not if) we balance ad tech with the art of marketing.”

The groundswell of community support for the post was overwhelming. Amid the inbound, there were tons of questions curious about Thomas Kuhn and secondly, which solutions will realize the promise of integrated user experience out of the current ad tech operational chaos.

Therefore, to answer these questions, let’s take a 50 year trek through the historic evolution of paradigm shifting and the disruptive innovation myth so we can see just how ad tech is about to get disrupted itself (and by whom).

Thomas Kuhn – the Father of Paradigm Shifts.     

Thomas Samuel Kuhn was a noted American physicist, historian, Harvard professor and philosopher of science, who published a highly respected book in 1962 entitled: “The Structure of Scientific Revolutions.”

The oxymoronic title of the book alone alludes to its quirky nature but does nothing to hint at the profound impact the book was to have in its day and for the next 5 decades.

When Kuhn was working, the 1960’s were tumultuous and exciting times with many major scientific advances being made in rapid succession. Kuhn undertakes, with profound scholastic discipline, to lay the groundwork for how the scientific community can standardize revolutions; using the well-known term “paradigm shifts;” so they are responsibly vetted before being unleashed on the public. Kuhn didn’t invent the term paradigm shift, but he gave it a specific meaning so it could become the foundation upon which scientific progress can rest upon with confidence.

Kuhn was deeply concerned with ensuring that scientific advancement is based on solid evidence and not wild conjecture or speculation. His emphasis on structure (as in the title) reflects Kuhn’s deep ambivalence about the concept of paradigm shifts. Paradigm shifts for Kuhn were extraordinary events that can only occur when there is an increasing number of paradigm-busting anomalies that challenge known paradigms.  He fully appreciated their fundamental place in scientific advances; “[A paradigm shift] represents a shift in the problems available for solutions … transforming the imagination to change the very nature of how the work is done.”

But he advised caution because: “Almost always the men who achieve these fundamental inventions of a new paradigm have been either very young or very new to the field whose paradigm they change.” This was the scientific version of; “Ah – all these young whipper snappers with their crazy new ideas.” Kuhn was the ancient age of 40 when his book came out.

Kuhn’s Legacy  

Kuhn understood that science was just smart enough to be truly dangerous. He articulated the process for advancement that spoke to generations of scientists because it delivered the needed framework for establishing responsible scientific advancement given the haphazard and dangerous nature of paradigm shifting. His established hallmarks for managing a paradigm shift are:

• Default position is trust in the current paradigm the scientific community has accepted (“normal science”) even in the face the unexplained anomalies
• If the number of anomalies continue to increase especially as a result of new data, then the scientific community must reach new agreements about how to measure the characteristic of the anomalies. Note – there is no paradigm jumping going on yet – but a simply a community consensus on how to accurately measure the results observed.
• Vetting of scientific results must include peer reviews and repeatable results from independent experiments
• Once community verified, the new paradigm is accepted by the community and thus becomes the “new” normal science
• “rinse and repeat” …

These principles are widely and rightly credited with the creation of well-established methods and processes for managing paradigm shifts. Kuhn puts tremendous responsibility on the shoulders of the scientific community; “As in political revolutions, so in paradigm choice—there is no standard higher than the assent of the relevant community… This issue of paradigm choice can never be unequivocally settled by logic and experiment alone.”

All this structure allowed the 1970s, the direct heirs to Kuhn’s ideas,  to be considered the Scientific Golden Age. More than that, Kuhn’s principles gave us nothing less than our very high standard of living because scientific breakthroughs could safely developed and adopted.

Clay Christensen – the Father of Disruption Innovation  

Kuhn may have deeply impacted everyday life but he remained obscure to most folks until Clay Christensen who, in 1997, published the run-away best seller business book called:  ‘The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail.” It was a roadmap for how businesses take “paradigm shifts” (from Kuhn) and create a competitive advantage through “disruptive innovation.” Failure to ride the disruptive innovation wave, the book cautioned, was likely to put a company on the path to destruction. Disrupt or be disrupted became, arguably, the first mega business meme.

At its core, Christensen’s idea rests on Kuhn’s concept of paradigm shift but it was recast in a decidedly sleeker package:

• Identify those paradigm shifts likely to change industries
• Create the disruptive innovation to capitalize on the paradigm shift
• Automate everything so you can produce a product at a lower price with lower but acceptable quality
• “Rinse and repeat” so as to maintain competitive advantage

Christensen astutely provided stress relief to business leaders who were reeling in the chaos of the 1990’s digital revolution with his “silver bullet” answers to complex problems. The 1990’s were a “Reality be damned as long as it’s disruptive enough” kind of decade.

An important side note is to recognize that in the 1990’s, many future VCs were cutting their teeth at organizations where the Disruption Myth was a widespread, accepted business strategy. As we will see, this plays an important part of our story.

What’s different between Kuhn and Christensen?  

The decades when Kuhn and Christensen were influential had many similarities. Generally speaking, both decades saw major technological advances; the 1960’s focused on industrial scientific advancements and the 1990’s digital revolution kicked off on August 6, 1991 when: “Berners-Lee posted a short summary of the World Wide Web project on the alt.hypertext newsgroup, inviting collaborators.” (Wikipedia). Just a few years later, Amazon and Google launched and the digital revolution attracted investments to anything “dot com.”

Whereas the decades themselves strongly paralleled one another, each man’s response was quite different. For Kuhn, a clearly paid out process for integrating new ideas into scientific knowledge was critical. By contrast, Christensen’s model was more concerned with the “big” concept around the importance of disruptive ideas, leaving big operational (yes – structural) gaps in his theories.

• How was one to define a paradigm shift?
• How do these disruptive innovations get incorporated into existing business models?
• What were standards for measurement?
• Could technology be duplicated so that it was transparently verifiable?

These and many other questions remained unresolved in Christiansen’s theory because he offers no framework for the industry’s development and evolution for disruptive innovation.

In practical terms, this meant and still means a lot of bumbling around in pursuit of the disruptive idea. Christensen’s meme did what every good meme does – go viral and in the process become a “truth” upon which almost all technological disruption since must rest.

Reality be damned.

In Disruption We [shouldn’t] Trust

Kuhn’s legacy is our trustworthy system to integrate new scientific ideas into our body of knowledge which has helped commercialize many new technologies; improving our standard of living decade after decade.

By contrast, while Christensen’s book itself was financially successful, it seems his theories were not. Probably because of its popularity, it took nearly 17 years for anyone to actually pick apart the math behind the Christensen’s work. Jill Lepore, a professor of American history at Harvard University and chair of Harvard’s History and Literature, analyzed the data behind his theories and scathingly observed in her 2014 New Yorker article, The Disruption Machine: What the gospel of innovation gets wrong:   “Disruptive innovation is a competitive strategy for an age seized by terror …founded on a profound anxiety about financial collapse, an apocalyptic fear of global devastation based on shaky evidence.” She continues; “Most big ideas have loud critics. Not disruption. Disruptive innovation …has been subject to little serious criticism,”

Lepore’s goes on to challenge the underlying assumptions about the disruption myth and wryly notes that the investment fund established by Christensen using his principles was a total failure and shut down.

While Christensen spoke to the angst many business leaders felt, he left out any process for vetting the new technologies that were flooding the market. We can’t chalk it up to coincidence that the “dot com” bust happened just three years after Christensen’s book was published, washing away many disruptive Internet ventures. In other words, our faith in disruptive innovation to build sustainable business is as real as a unicorn in the forest.

Christensen’s Legacy Haunts Ad Tech Today

To this day, ad tech continues to live in the shadow of the Disruption Myth, trapped there by an investment community that believes unblinkingly in the ideology of disruptive innovation, largely I think because of their early exposure to Christensen’s model. This devotion shapes what and who VCs invest in, with blinders on as to the effect the tech has on marketers (agency and advertisers). This Ad Age post I did called, “Why Excluding Marketers from the Ad-Tech Boom Is a Failed Strategy” (April 30, 2015) laments the flood of “cool” ad tech that is increasingly detached from the real world of marketing. “My anger swelled at the scope of the marketing efficiency devastation. And my frustration knows no bounds at the abundance of tech “products” with an appalling lack of “productive” solutions. Mostly though, we lack systems where everyone has a chance to benefit — investors, ventures, advertisers, agencies and of course “Judy Consumer.”

The vestiges of the Disruption Myth that continue to haunt ad tech today are:

• VCs who continue to fund ventures based on their disruptive algorithm or automation platform without considering how the technology lives within the marketing ecosystem
• CEOs with little or no direct experience in the industry who create disruption without necessarily creating value for marketers
• The community of marketers that has largely been marginalized leaving the disruptions to be shaped in the VC/ tech echo chamber
• Measurement standards that are “best we can do” – not the best that can be done
• Lack of transparency fed by the “black boxing” of disruptive tech

On a human level, Christensen’s legacy means that if you work in marketing today, you are in peculiar type of hell. You appreciate the potential of digital marketing to build businesses yet you’re frustrated at the chaos and corruption of ad tech that is built on pillars of impressions sand funded by disruption-obsessed VC money.

Marketers are reeling from trust issues; between agency and advertiser and between brands and digital audiences. They are reeling from attribution issues and most challenging of all – they are overwhelmed in understanding how measure the artistry of marketing into the ecosystem as an equal partner to the technology. This is why the word “bust” is not far from the lips of any investor in ad tech in a “history repeating itself” déjà vu moment evocative of 2000. But it doesn’t have to be that way.

Slaying the Disruptive Innovation Myth.

Till 2014 or so, marketers were all too happy to take a hands-off approach, leaving the geeks to work it out amongst themselves. Marketing trade organizations belatedly scurried to catch up, by that time, the VC disruption die had been cast and tech disruption obliterated any investment in marketing artistry or operational excellence.  Marketers had very much lost control of their own industry.

Reality be damned ads long as it was disruptive enough.

By 2015, though the “disruption” cracks were becoming gaping holes as marketers struggled even more in the fragmented ad tech landscape. An Entrepreneur article I did exposed the high cost of ad tech to people: “Disrupting the Disruption Myth” (August 2014) My aim was to crack open VCs narrow definition of what a disruptive venture can be, using Xiaomi’s (pronounced SHOW-me) phenomenal growth as a prototype of a wildly successful venture without any disruptive tech in sight.

Back in 2014, I may have been just one voice, but by 2015, there was a growing chorus of marketing voices demanding ad tech disruption be about human disruptive technology.

Looking for Disruption in all the Right Places.

If Kuhn had been writing in the 1990’s instead of Christensen, I suspect the ad tech landscape we have today would have been far different. There would have been “community” due diligence around how a disruption is an improvement over existing approaches.  There would have been peer review to establish standards to describe these approaches. And most certainly there is would have been vetting process ensuring that potentially deeply invasive technology is used responsibly and to serve people well.

But as it was, the technologists and the “disruption myth” devotees at investment firms, have been in charge for the last five years with pretty much a free hand to “disrupt” at will. Now that many ventures are struggling – even the high flying ones, many VCs and technologists are scratching their head wondering what went wrong.

Any marketer can tell you. The only thing that ad tech really disrupted is the human element of marketing; so crucial in the creation of meaningful connections between brands and audiences.

That’s why going forward, there will be a new paradigm in marketing where the “how” is more valued by investors than the disruptive “wow.” The ventures emerging will create innovation specifically geared to balancing the art and science of marketing within a structured model of transparency, vetting and measurements. From 2016 and on, the community of marketers will be far more active in creating and assessing the disruptive value of new tech as disruption will mean innovation that drives genuine progress.

Ad Tech Disruption in the Future

By now, we can appreciate how the structured approach to “paradigm shift” that Kuhn imagined, was morphed by Christensen into a non-structured disruptive myth ideology that for ad tech, means a lot of chaos and operational dysfunction.

In 2016, the disruption dust cloud will lift, allowing clear heads to pivot; abandoning their reliance on tech-based disruptions in favor of ventures that focus on operational ad tech as their innovation.

Strategically, these ventures will share some common characteristics that are Kuhn inspired, distinguishing them from their Christensen-imbued predecessors:

• The distinct lack of disruptive “wow” or black boxes in favor of an operational analytical “how.”
• Abandoning the near sacred MVP (minimum viable product) model of most ad tech startups in favor of a new MVP = Maximum Valuable Product. Consumers are very sensitive to subtle changes that can occur in frequent platform iteration causing changes to expected campaign ROI.
• New “outcome-based” SaaS models as marketers begin to drive better contextual experiences through new contextual tech AND processes.
• Engineering obsession around a highly satisfying and frictionless user experience without ad tech compromise.
• The financials of these ventures will be realistically investable but also sustainable by the industry. Plainly put, today’s current VC expectation that ventures achieve 60%+ margins is unrealistic causing much of the click fraud that is weighing down the industry.
• Their leaders will likely be experienced marketers rather than 20 something tech geeks. Marketing is as much about processes as it is automation. It takes real world experience to create that merged vision of art and science.

And the winners are…

Taken together, we will see a blossoming of ad tech over the next five years in various industries and functions making these ventures interesting (and dare I say disruptive):

1) Healthcare as an industry is going through a “retailization” transformation that is largely about creating user responsive systems and services. This is, for the healthcare industry, a paradigm shift as the industry moves from “fee for services” model to an outcome based model.

A host of disruptive marketing technologies will burst onto the market from innovations around wearable tech to tackling the mountains of medical/ provider data. Healthgrade (http://www.healthgrades.com/) is an example of a company working on wrestling all this data into a user friendly format. Today, they help about 1 million people a day make sense of the vast amounts of doctor and hospital data (like reviews) available all customized to meet the needs of that individual. They plan to expand to power better ways for consumers to manage medical expenses through aggregating medical information, offering product information and making it transparent for the patient to decide while managing users’ online security.  Ultimately this, like other ventures in this space, rely on an excellent user experience.

2) Direct marketers are likely to be winners in the new ad tech disruptive game because they are making the leap to deliver personalized experiences where tech supports the very human side of customer acquisition and retention.

Going forward, direct marketers will expand their email/ database capabilities into new marketing cloud offerings like Bombora (http://bombora.com/products ) who; “Aggregate. Organize. Activate.” data to make it incredibly useful for B2B marketers across business applications.  Cue Connect (http://www.cueconnect.com) is also interesting because it takes a “direct” product level approach to helping retailers stay connected with customers and create excellent user experiences. Their online platform gives retailers new insights and tools to provide a better, integrated on/offline shopping experience for their customers using products level (not the more typical user level) insights based on their behaviors (i.e. – share or saving as a favorite).  This product centered approach reflects a sensitive understanding of “how” real people shop for stuff – the “wow” is there but it’s not the point.

3) Content marketing is on ascend almost in direct inverse proportion to the degradation of CTRs on many forms of display advertising.

Today though, this category of ad tech is a messy, fragmented, incomprehensible landscape of content creation, social publishing, sentiment tracking and on. Each venture, eager to be disruptively investable, went deep into a functional silo leaving the marketer with a dizzying myriad of options that don’t play together too well. Native, just one form of content marketing, is an example with its dizzying array of networks and “platforms.”

Disruption here will revolve around ability to deliver true relevant brand messages through contextual advertising technology that will be well-defined; merging human creative process with programmatic RTB technologies. Our venture is an example in this space as we link data related to content and RTB programmatic advertising. Another example is Kargo, a great mobile venture that excels at amazing, rich and personalized video experiences.

4)  The massive business called TV will be (finally) disrupted with the arrival of VR (virtual reality) in 2016 and Apple TV which will drive the final nail in the old world TV distribution model. The paradigm shift here will be the reverse of control from broadcasters and content providers to individuals where video streaming, gaming, shopping are all delivered seamlessly across devices.  It is likely that TV disruption will come from the mega networks (ie Facebook) as any large tech company (ie Samsung).

The way forward depends on the human element.

Current marketing chaos is rooted in an excruciatingly unsustainable model imposed on marketers by VCs who limit their vision to disruption described with words like scale, algorithm and SaaS anything.

But now the alarm bell is ringing in everyone’s ears because more money is spent on more tech, yet marketers are getting less done and investors are getting less returns.

We can do better and Kuhn showed us the way.  In 2015, marketers have experienced a paradigm shift of their own in the form of community unity propelling marketers to take back control from the technologists. Redemption will come from discarding the unproductive Disruptive Innovation mythology from our thinking (it may take VCs longer to let of this cherished tenant) and replacing it with a disciplined process as Kuhn imagined but coupled with a new sensitivity around the need for practical solutions that allow marketers to create new user experiences.

2016 will see the triumph of marketing brains and art over pure disruptive tech brawn. I’d like to think would Kuhn be proud.

Top 8 tech terms marketers love to hate.

Nothing rankles the ire of any marketer with even a tad of experience more than those highly touted “new” tech terms or concepts positioned as silver bullet answers to, heretofore unsolved, marketing   problems. And to those of us who’ve been around the marketing block a few times, these new terms resemble a toddler’s early attempts at speech – cute but a phase they’ll grow out of. 

Unfortunately, though, some of these usually harmless little word experiments “stick;” taking on a larger-than-life meaning that does a disservice to everyone.  My plain hope here is to put these concepts into context so they can be practically applied in the day-in-day-out business of marketing.

1. White labeling:

The history: It started life decades ago in the tech world referring to the practice of re-branding 3rd party technology as your own so it can be resold at a higher price.  This was worked well for many tech platforms like CRM or email service providers because the “resellers” were often system integrators or tech companies themselves.

The impact: When the practice began to be applied to the marketing industry, i.e. an agency white labeling a tech platform, it translated poorly because a marketing company is poorly skilled to take on the management of a tech platform.

Why I hate the term: The term shines a spotlight on the bigger disconnect between the business models of tech platforms versus advertisers/ agencies. White labeling is no solution for anyone; agencies have to fake it, tech companies get no credit for their innovation and brands are sold “black boxes” – a sure recipe for problems down the road.

2. Native ads:

The history: This term was recently coined by Fred Wilson in 2011 as “native internet marketing model” and “native monetization systems” (Fred Wilson’s 2011 talk on this topic). This concept was picked up by a social media tech platform and morphed into meaning advertising that’s consistent (a.k.a. native) with the environment around it.

The impact: If only Fred had asked any marketer, he’d have learned we had a term for that concept; alternatively called advertorials (1980s), sponsored content (1990s) or custom content (2000s). And just like in years past, the trust issue about separation of “content church” and “advertising state” plagues the effectiveness of today’s “native ads.”

Why I hate the term: Tech platforms can push demographically accurate “native advertising” but that doesn’t make it trusted advertising, (disclosures notwithstanding). Experienced marketers know that advertising that is not trusted is not worth doing. Tech ventures are climbing that steep learning curve.

3. Growth hacker:

The history: Somehow this term evolved as an awkward mash-up of the terms “hacking,” the ability to use tech wits to achieve results usually at “low/ no cost,” and “marketing growth.”

Ugh! This pairing spawned a Frankenstein child capable only of crude brute tech force that is ultimately unfit for the delicate business of marketing.

The impact: I don’t think anyone has a real clue what a growth hacker really is. I do know that anyone who is actually hiring marketing folks snickers at the phrase.

Why I hate the term: Some things seem obvious and yet require saying nonetheless. For the record, no marketer wakes one day to say; “Let me spend the most money possible to create the least result possible.” Marketing is about getting the most bang for the least buck.  That’s not “growth hacking” – that’s the marketer’s job description.

4. MVP (Minimum Viable Product):

The history: The “when to ship” decision remains probably one of the most excruciating decisions every tech CEO must make. Investors, eager to reduce their risk, push CEOs to ship the least offensive product possible a.k.a. the MVP (Minimum Viable Product).

And they’re not kidding when describing it as “minimum viable.” This virtually guarantees that almost immediately, iterations are needed to adapt to market feedback. Problem is, in this context, MVP and the “iteration” model (deserving a place on this list in its own right) fails marketing practitioners.

The impact: The MVP problem lies in the fact that a constantly “iterating” marketing platform can mess up the very delicate and time consuming sales conversion process with just a single interruptive interstitial here or badly retargeting ad there.

Why I hate the term: MVP encourages a UE race to the bottom with more and more users getting more and more frustrated. Worse, it seems the MVP concept has become a “get out of jail free” card to excuse a tech platform’s particularly bad results or awkward UE. “Iterations” offer little salvation, actually exacerbating the problem (more on that below).

5. Iteration:

The history: Software development is a process of creating, testing, fixing, testing, fixing a.k.a. iterations. This “agile” process has evolved over the years but it is always based on some machine-based process of trial and error.

The impact: While machines are great at handling iteration – people aren’t. Making continual changes or iterations to a marketing platform is fraught with possible bad user experiences that can blow any marketing proforma out of the water.

Why I hate the term: Iterations have become so pervasive in an MVP world, it is virtually impossible for marketers to keep up. Facebook alone is planning an “iteration” of six ad products in the next few weeks. Iteration is chaos for marketers.

6. Earned media

The history: This term does not have its origins in tech but in PR where it referred to the additional “earned” or free media a story got. This additional “free” media coverage was in direct contrast to “paid” media coverage.

But sometime in the last 5 years, the term was co-opted by the tech world and linked to social media with unintended but harmful consequences.

The impact: The damage was done in talking about “social media” as being able to generate “earned media” – setting up the dangerous expectation that social media is free or cheap just like “earned media.”

Why I hate the term:  Any marketing practitioner knows it takes lots of time and hard work to get social media to work properly. That is not free or even cheap. The mythical “earned media” beast creates false expectations that are hard to overcome.

7. Impressions:

The history: In the old days, it was relatively easy to estimate the number of people an ad campaign would reach given the limited number of outlets; TV, magazine, radio and even movies. This diverse yet limited media was measured in terms of standard “impressions” easily translatable to a real-world audience number.

The impact:  Theuse of impressions worked with traditional media because of its tangible audience delivery numbers but it fails in today’s digital landscape that is capable of serving billions of impressions but incapable of telling us how many people were actually reached.

Why I hate the term: This term, more than any, IMHO is the root cause of a system-wide loss of trust between agencies and tech platforms; advertisers and publisher audience numbers; consumers and advertisers. This epic trust failure explains the steep decline in all forms of digital advertising interactions.

8. Engagement:

The history: The term was long used to describe great creative because it was “engaging.” Later, sometime in the 1990’s, it was applied more specifically to direct marketing because of its ability to precisely measure direct response engagement (i.e. – email or banner ads).

The impact: It’s rather humorous to watch marketing tech platforms gush about engagement as though it just hatched from the brain of the clever tech set. That would be benign enough except that a tech platform’s idea of engagement is a herky jerky set of user “twitches” and clicks instead of the elegant dance that a great engagement experience can become.

Why I hate the term: Technologists’ slavish devotion to engagement is rather shallow; lacking in the nuance to understand the profound ROI difference between just an “interaction” and true “engagement.”

The marketing tech industry is trying to respond to the continued stream of bad news of plummeting digital ad response rates. At its heart, I believe the challenges stem from the lack of connectedness between technologists’ capabilities and marketers’ requirements. Language can be a bridge connecting technology with the business of marketing. Only then can we begin to unleash all the potential.

7 schizophrenic traits every startup CEOs must adopt

The role of CEO is often described in gauzy, glowing terms espousing passion mingled with ambition that runs deep enough to change the world. All this noble ambition belies the uncomfortable reality that the inner world of a start-up CEO is often a constant state of conflicting realities that can distract from the mission at hand.

This list reflects my personal experience as the CEO of a social commerce startup. I can tell you – the dual reality can be disconcerting at first but after a while it gives you a certain edge that makes you tougher and smarter the longer you stay at it.

1) Your vision must be out there enough to generate investor interest but not so out there so as no one knows what you’re talking about. We’ve heard it from the pundits a lot – be different, don’t just iterate on another idea. Gotcha but then when you truly do go out on the limb – you may not get investor interest because you’ve too far out on that very limb they asked you climb out on.

2) Being 100% committed to do the best you can do but realizing that it might not be the best that can be done. As CEO, people want to believe you know more than you do – especially if you are chartering new territory. Unfortunately, you know that your best is probably not close to the best that can be done. You have to hope that it good enough to get by.

3) Truly believing in your vision yet living with the reality that the odds are definitely against you. I heard Brad Feld of Foundry Group remark recently that they get about 1,000 pitches a year but only invest in about a dozen ventures. So do the math. Your chances of getting funded are very small and even you do get funded – your chances of success are not in your favor. It’s a miracle anyone actually takes the plunge.

4) You are constantly recruiting even though can never afford most of the people you would love to hire. I learned never ever recruit when you urgently need to fill a job. That increases the chances for a bad hire because hiring in a moment of need won’t bring the best candidate forward – it will merely bring the most convenient one to the table. Instead, you should be recruiting ALL THE TIME. The trick is keeping the candidates you want on simmer until you are ready.

5) You must be a perennial optimist yet become exquisitely good at “productive worrying.” The grind of a startup requires a positive, upbeat attitude to get the team through the inevitable tough times. Yet, a Pollyanna attitude won’t get the job done to overcome the inevitable stumble that’s to come. For that eventuality, it best to be prepared with a Plan B and a Plan C too. In my case, I’m such a good worrier that my Plan B’s have Plan B’s (ya – I know – that’s extreme worrying).

6) You want to be fully transparent but realize there are some things you should NEVER EVER tell your VC. There is great serenity in knowing that you have been totally open and trustworthy in all your dealings with your people, your customers and your investors. Despite that – never confuse transparency with “true confessions” when dealing with investors. You need to convey confidence with a healthy dash of cautious optimism. Keep the deeper “what if’s” worries to yourself unless you have a specific ask of your VC.

7) People call you “Brilliant” and a “Visionary” but you feel like you are faking it. If you are a half articulate and just passionate enough – people will use the “B” or “V” word around you a lot. They hang on your every word waiting for the inevitable pearls of wisdom to trip off your tongue. Yet, often people confuse “Brilliance” with deep experience and a “Visionary” for someone who has a good grasp of history. Truth be told though, often you feel like you are just muddling through. That’s OK because if you admit you don’t know then others can step in to help. Otherwise the visionary, a.k.a. prophet must always have the answers. Not.

There you have it – the seven habits that are vital for any startup CEO.  I guess ya’ need just a touch of crazy to pull it off.

The Surprised Entrepreneur turns Rebel Entrepreneur

What makes a rebel.

“Judy,” a sweet tech project manager said to me recently after I discussed some of the gaps in the social marketing ecosystem “You are on a crusade.”

I didn’t see that one coming so it stopped me dead in my tracks. What crusade was that I wondered? I probed but she dodged answering me. The word crusade is laden with meaning so it stuck with me – what had I said to give her that impression?

In hindsight it seems obvious but in the moment, I was oblivious to the shift in my thinking from simply being a Surprised Entrepreneur (as I posted here) to becoming a Rebel Entrepreneur.

My cause was simple – to put the human element back into the business of marketing that has been platform’d to a near digital death. I am driven to re-infuse marketing with the sense of wonder, joy and creativity that I had the good fortune to revel in during my earlier career days.

In those ancient days (one generation after Mad Men but before the Internet revolution had really hit) we could put hearts into our work because there were few tools or platforms or technologies to guide the work. It was pure creativity and smarts. It was hard to measure the effectiveness of the much of the work but you knew your work made a difference when the company did better – jobs were created and bonuses were happily doled out.

Over the years, technology improved how we deployed marketing but we continued to be driven by our nobler motivations to create great marketing that improved people’s lives. We knew we could make a difference.

But there’s been a shift in the industry over the past 3 years. Marketing, especially social marketing has become a tech-heavy exercise of manipulating retargeting platforms, or reward systems or algorithmically based big data platforms. Social marketing is reduced to a conversation about content syndication or sentiment analysis.

So it’s no surprise that over that period of time, inextricably, I have seen tech and platforms taking the joy and the nobility out of the system. I have become overwhelmed by the supremacy of marketing platforms over serving people and algorithms over inspiration.

My sense of alarm was quite publicly aired in the digital pages of Ad Age and Huffington Post. I ranted at Facebook when I felt defeated at using Facebook productively. I admitted frustration at the black-box techno-jargon wave that swept over us marketers drowning us in confusion. I’ve even had the chutzpah to question the funding strategies of VCs who are basing their investments on marketing principles that simply don’t apply anymore. But mostly I challenged the 20 something CEOs who created marketing platforms that are long on cool but short on practical application for real marketers.

In the process, I have been:

• Flamed by Macboys and called a hack (look up “Judy Shapiro” and “mac security”)
• Accused of being techno-phobic and capable of only kitchen related work, ideally pregnant at the same time thus preventing me from ever writing offending articles ever again
• Tarred and feathered as an “old line” marketer unable to keep up with the iteration savvy tech guys
• Harangued for questioning if the “Content as king” model was sustainable
• And very nearly digitally lynched when I first suggested in 2010 that perhaps Facebook had jumped the shark.

And so against all odds – here I am, founder and CEO of a social tech company, readying the BETA launch of our new network called Eden for Q1.

Against all odds, this little venture that started a year ago will be introducing a different type of social marketing framework that is a based on an “opt-in” paradigm. We are going up against the big “push based” social marketing platforms and networks. It is an uphill but noble fight. In our vision, Eden is a place where users control the action – how they see content or which brands they interact with. It is a reversal of the; “It is our platform so you have to play by our ever-changing rules” social network that dominates social marketing today.

Against all odds, we managed to secure funding including from an early stage VC for which we are eternally grateful. We’ve created relationships with agencies ready to sell Eden to their clients and we’ve sealed meaningful partnerships that help us gain access to the highest levels within publishing and brands.

Against all odds, as one woman in her 50’s, I am privileged to be joined by a community of seasoned marketers to help in this crusade. Our collective goal is to right the marketing ship listing dangerously to one side from the weight of platforms and big data. I can’t express my gratitude to this brave league of fellow crusaders other than to give them full credit for their invaluable role in our noble adventure. I give them a place of honor in our company’s history:

• Peter Hubbell, CEO of BoomAgers and former Saatchi Board member. www.boomagers.com
• Griffin Stenger, a founding partner of Concept Farm, a leading social marketing agency [Crain’s]. www.conceptfarm.com
• Robyn Streisand, Founder and CEO of The Mixx Group – a branding agency and an early investor in engageSimply. www.themixxnyc.com.
• David Hoffman whose career spans four decades as a film producer and corporate strategic communicator. Wikipedia’s simply calls David: “One of America’s veteran documentary filmmakers.” http://en.wikipedia.org/wiki/David_Hoffman;
• John Bowman, was Exec VP Strategy at Saatchi working on their premier brands and is now authoring a book about his great Grandfather, Archibald Stark Van Orden http://theassassinsassassin.com/about/
• George Collins, a long time database expert and CEO of Research & Response – a database management consultancy. http://www.rresp.com/
• Mark Bonchek, Founder of Orbit + Co whose strategic consultancy is “creating a new direction in business by shifting the relationship of individuals and institutions from PUSH to PULL.” http://www.thinkorbit.com/

Against the odds, I have been able to attract a seasoned management team of  marketing practitioners who had to “build it” after the consultants talked about loving it but conveniently left when the real work began. They were the ones who built those first generation eCommerce sites and created the principles that good UE designers use today. Our journalists understand SEO and our artists are offering their images for free all in an effort to be a part in the creation of an alternate social marketing reality – a fresh start called Eden.

So against all odds, I find I have become a Rebel Entrepreneur – so strange especially given my training, temperament and age. The potential high rewards of being a rebel all too often comes at a high price and we’ve seen our share of deals gone bad, betrayal by trusted colleagues and funding plans gone awry (Sandy was devastating to the startup community).

And yet, despite the odds, we are close to the launch of our network.

So I invite you all over to Bit Rebel to experience this journey with us as we sprint to Eden’s launch in Q1. Celebrate our highs and feel the unnatural lows that are endemic to startups. Share our anxiety as our burn rate increases but our funding outlook seems further out (we are doing a second round of seed funding now). Take a peek behind the startup curtain, see what’s really going on and help shape what happens. The success of Eden will be a triumph of us marketing practitioners like web designers, SEO geeks and developers over algorithmic feats of IP muscle.

Our mission is noble and our cause true.  Come join us.

I guess like any good crusade, we need a flag and a manifesto. Stay tuned – I am just learning how to be a rebel. Kinda of exhilarating actually. But

Judy Shapiro

P.S. My rebellion gets its own website: http://judyshapiro.wix.com/rebel-entreprenuer. Viva Le Rebellion.    

A time of gratitude.

The life in a startup world is intense.

Every event takes on qualities of epic proportions. Good meetings become the makings of great deals. Great meetings are like pixie dust creating a confection of billion dollars exist fantasies.

Conversely, every stumble hurts far more than the reality of the injury. Confidence gets shaken and once that is done – game over.

So in the pressure cooker of the startup world, losing perspective is a near universal experience. In the race to launch your venture before funds or faith run out, the focus is on the next milestone or the next deal you MUST close to keep the doors open.

While the grind can overcome our sensibilities, almost nothing will distract the startup CEO from their near myopic focus.

Almost nothing that is until Mother Nature forces herself onto your consciousness.

Sandy disrupted our inner sense of safety as it tore its way through the Tri-State area. The Northeast is not accustomed to a full natural disaster that was Sandy. We are used to being a terrorist target but now we also have to accept that we are as susceptible as any other area to natural disasters too. It is almost too hard to fathom.

But in the destruction and the internal turmoil comes a renewed sense of perspective. In the seismic shift of how bad things can get – a balanced appreciation for all we have asserts itself powerfully as though to ensure it can withstand the inevitable reverting back to the “not normal normal” that characterizes startups.

In the chaotic tumult caused by tress falling houses and tsunami level waters, some very true principles emerge as powerful counter forces to the forces of Nature.

1) Live widely by giving of yourself largely.

2) Remind yourself to be grateful for the chance to be grateful. Where there is life and health – everything is possible.

3) Be gracious to those in need.

4) Pay special attention to needs of the larger community. How we support our community is a true mark of our character.

5) Act as though your every action is being recorded and watched.

This tragedy will change many of us forever.  My hope is that the change of gratitude is a permanent one.

Judy Shapiro

The “turning point” moment that harkens a new beginning.

The life of an entrepreneur is an emotionally volatile one. The ups and downs are extreme because often so much is at risk.

As a newbie entrepreneur, I was especially battered recently by the wild swings of bad news and good news so as to make me ill with startup sea sickness.  Yet, as I began to get my sea legs; slowly the nausea was replaced with a serene inevitability that this little venture might, against all odds, make it.

It’s not arrogance that colors my thinking. Nor is it an irrational faith in my brilliant thinking.

But it is the realization that if I make it will be because of the community around me. The vision for Eden was to create a way for consumer’s to create a trusted web space starting with Eden Network – a social network of topic based communities that serve high search but badly served topics (e.g. karaoke).

The sheer audacity of my attempting a tech startup, in retrospective, was stunning. As a marketer, the notion of being a tech CEO was about as likely as me going bungee jumping any time soon. Sure – perhaps the opportunity may come up but it’s unlikely I would ACTUALLY do it.

Yet this venture was born of pure passion – actually passionate frustration at how there so much brilliant marketing tech innovation going on and a total lack of operational practicality in being able to use much of it.

But while frustration goes a long way towards driving me forward – it doesn’t make me a seasoned entrepreneur. I’ve made many rookie mistakes but I am encouraged to continue mainly because of the support of the community around me.

And because of the encouragement of my community, despite all the pitfalls and pratfalls, within the last week, I sense a fundamental shift.

I turned a corner.

Different key pieces are coming together in a way I could have never expected; brands are excited to participate in Eden Network; agencies are anxious to offer new social marketing options that’s easy for them to buy and monetize. Key management holes are being filled with ease and partners are approaching me with increasing volume making me dizzy with potential.

My community of friends and colleagues are the foundation upon which this venture rests. It is an honor to have such loyal and supportive friends. It is also humbling and inspiring to be sure I don’t let them down. Just a few weeks ago, I felt like I was in a free fall dive and now I am buoyed by a sense of “knowing” that we have a shot at making it.

The Jewish New Year is about to commence and for thoughtful souls, it is a time of acknowledgement and gratitude to all that we have been given.

In that spirit, it’s up to me to be sure that the community knows the depth of my gratitude.   May we be privileged to share a year of peace and awareness at how precious each one of us is within the community of humanity.

Judy Shapiro

Why the “cha ching” of the $1B Instagram sale might actually bankrupt Boomer parents.

By now, most of you have heard of Facebook’s $1Billion sale of Instagram, an app developed by a bunch of young 20 somethings that lets users post photos. Today, Instagram has about 50 million users which works out to about $20/ person. “Cha ching” for anyone involved …

Punditry aside about whether it is a shrewd deal for Facebook – instead of “cha ching” – all I hear is hissing as the air escapes from Boomers’ retirement funds.

It is alarming and here’s what I mean.

You see, I have worked with tech ventures for over a dozen years, starting at Bell Labs New Ventures and continuing to this very day. In that time, I have worked with many startups, often gratis, because it’s so rewarding when my expertise can really make a difference in the early days of a venture. CEOs have the product vision but they rarely have marketing know-how to get the product to market.  That’s where I step in. I help startups assess their market potential so they can monetize.

And in the dozen years or so I have been doing this, I see an alarming new twist to the never ending parade of venture dreams that haunts me. I liken it to the disturbing “Gold Rush” era where many more prospecting failures bankrupted folks versus the rare, outlier successes.

In today’s day and age – here is how it goes down.

Johnny or Jane are in college and – wham – they hatch an idea for a company often inspired by the innovation incubators on every campus. The idea grabs their passionate attention because at least they can try and make it happen versus trying to get a job which is tough and depressing.

Mr. and Mrs. SupportiveParents are happy their kids have found something that inspires them, so they cover more of their kids’ living expenses so the kids can commit themselves to their “passion.”

After about three or four months, their idea has some substance and the kids realize they need some money to create a “demo”. Of course, there is no cogent business plan (if a business plan even exists) but Mr. and Mrs. SupportiveParents kick in the $10,000 or $20,000 to create said demo –  on top of the extra expenses they are already incurring to keep their kids in school. (This is when you can start to hear the air escaping from Mr. and Mrs. SupportiveParents 401K accounts!)

A couple of months later said demo is “almost done” but not quite because the kids did not really do a business plan and as they worked, the idea kept changing (translation = more cost). “But I only need another $20,000 to finish it off. Then it will take off because it is so cool. Please …” Again, as we would expect, Mr. and Mrs. SupportiveParents step in and shell out what their kids need.

Slowly but surely, over time, as their kids refine their idea; there is steady attrition of the parents’ savings plans because startups need constant funds. This tableau is playing out again and again and I know it because I have met too many Mr. and Mrs. SupportiveParents in the last few months who have depleted their savings by $150,000 or more to help their kids live their passion.

It is frightening to see since most new ventures are “high risk” in the best of circumstances, making them wholly unsuitable investments for most any Boomer given their proximity to retirement.  And if that’s not bad enough, it’s even worse once you understand that kids’ ventures, proportionately, have a higher mortality rate because they are borne of 90% enthusiasm and 10% practicality despite their parents’ 100% support 100% of the time.

This is a dangerous combination – especially in frothy times like ours where opportunities for kids are limited yet perversely, the potential for untold wealth is tantalizingly possible.

And this brings me back my point. The Instagram sale was an aberration – a fluke – an outlier event – possible because of a unique set of circumstances. Yet it infused a new level of Gold Rush fervor into the passionate hearts of ambitious young entrepreneurs despite the reality that the chances of striking it rich today are about equal to striking it rich in the Gold Rush of 1848.  And just as sadly, their loving parents are funding these ventures despite the improbable odds.

So while many people hear the “cha ching” of $1B, all I hear is the air escaping from parent’s retirement funds. It is not a happy sound. Not at all.

Judy Shapiro

P.S. – I am posting this as my personal Mother’s Day present to Mrs. SupportiveParent. Be careful – please!

The surprised entrepreneur – The last moment I can allocate GRATITUDE Grants

I am surprised how fast shares go in a startup company that people are excited about. Our plan is mostly done and the investors have begun to make overtures. My total ownership has been happily whittled away to include the wonderful talent this company will need.

I gratefully allocated shares to our president who is deeply experienced as both an entrepreneur and a VC. I was deeply honored when our CTO, who gets hundreds of business ideas in a year but only considers “one or two,” signed up.

Ever so carefully, I identified the key talent we would need and one by one each person on this amazing team is coming onboard with their allocation. Yet until we officially close our first round (scheduled for February), I’ve still got ability to allocate shares pretty much as I want.

But not for long.  

Now, much to my surprise, I realized how very quickly my ability to make unequivocal awards of shares will be gone. Now is the last moment I have to express my gratitude to people who have believed in my ability to create a new way forward in marketing.

So with the urgency imposed on me by our first formal funding round, I have barely a few weeks to share these gratitude grants.

I get to tell my dear gentle creative storyteller, a giant in the business of video, how valuable his lesson was in the meaning of video to create a powerful experience.

I finally get to ‘give-back’ to my “hard core” (hehe) entrepreneur, investor and civil liberties activist friend. She taught me perhaps one of the most important lessons in this space – the focus needs to be about creating shared experiences using content rather than solely focusing on the content. It is a powerful mind-bending insight that has deeply shaped how engageSimply develops its concept.

I can go back and reconnect with some of my ex-colleagues and CEOs who, over the years, inspired me, instructed me when I just didn’t get it and generally invested in me by teaching me ever so patiently. I can’t imagine how I would be doing this without their support and faith.

In the end, each gratitude grant is my way to repay the gift of confidence that each person so unselfishly gave me. It helped me turn a blind eye to the limitations imposed by stereotypes about what a tech CEO looks like (age or gender) or should do.

Over the next few weeks, I will have the distinct privilege and (one time only) opportunity to award these gratitude grants – without justification or encumbrance. To those of you on the list – stay tuned.

Lots of people track “firsts” (e.g. first investor, first alpha) – I want to note the “lasts.” I want to acknowledge these last few precious moments when I have full control of my company and I can still allocate equity as I want. This privilege is fleeting likely not to be ever repeated.

I best be sure I don’t leave anyone out. What a happy chore.

Judy Shapiro

The surprised entrepreneur – I’m having the time of my life.

I am not sure what I expected to be doing at this point in my career. I have been blessed to have been at the center of the changing, blossoming technology landscape of the last 20+ years.  My earliest days were at an advertising agency called NW Ayer which gave me a broad perspective on Corporate America’s practices, problems and possibilities for triumph. I then gracefully made my way into the tech stars of Corporate America itself with stints at AT&T, Bell Labs, Lucent Technologies and Computer Associates. I also had the great good fortune of working at small innovative technology companies led by visionary innovative leaders. Two prime examples include Melih Abdulhayoglu, CEO of Comodo and Jason Katz, CEO of Paltalk.

This unusual combination of corporate marketing experience coupled with the feet on the streets training born of working at tech startups, gave me a balanced perspective of how the marketing business is evolving in this technology driven world.

So here we are.

The marketing business is going through a fundamental shift that throws into question almost every tactical practice built over the last 20 years. And, amazingly, it seems that just as marketing becomes this new discipline that weaves creativity into an interactive user experience that is tech heavy – it’s a perfect fit for my peculiar type of networking meets technology marketer experience.  

This seems nothing short of extraordinary. Which is why I am all the more stunned at the work I am doing today. I had not planned on any such seismic move in marketing, so I certainly did not plan on launching a marketing tech venture.

But here I am.

My journey has been one of surprising excitement at the possibilities in marketing excellence that was simply not possible before. The vision of this venture, therefore, is to take advantage of these new trends to deliver a sustainable and productive “marketing machine” (a phrase I attribute to Melih) that can turn the tables on how marketing gets done.

In our vision, we don’t approach monetization like Google or Facebook’s who are about pushing more accurate marketing messages to consumers. We are looking to deliver a marketing platform that lets consumers decide what content they see, what ads they see, how their social networks are managed, how they conduct commerce, even how they communicate within the social networks. The organizing principle for this platform is not ad-driven monetization but oriented around Judy Consumer. Our vision is to create the kind of system that we want to live with for the next 10 years . In effect, we want to give Judy Consumer the tech power to create her own personal “Trust Web.”

To the few friends we have shared our vision with – all have come to a similar conclusion – it is an ambitious (maybe too ambitious) vision. They are correct. But as I entered marketing in the 1980s most of marketing at first was human powered with marketing systems emerging later on.  

And here we are – again.

This next generation collection of marketing technologies is rich in creativity but is not organized for sustainable marketing programs for brands. This is work that I, among others, are focused on – creating v1.0 systems to operationalize the business of social marketing.  

We are all at just at the beginning of this journey and it’s a journey I didn’t expect to be taking at this point.

But here I am – and much to my surprise – I am having the time of my life.

Judy Shapiro

The surprised entrepreneur (entry #5):

The great talent hunt yields an unexpected gift that keeps giving. 

Hiring is tough on all companies.

Hiring is brutal for new companies.

One bad hire could spell irrevocable disaster.  You have to pick people who can get the job done today, have a passion for the work we are doing, be a mensche, be creative and be just quirky enough to add to the color of our community. But I also know enough though to know, practically speaking, there’s a thin line between a “quirky” and a high maintenance team member.

No wonder it scares me to death.  No wonder I put if off. I’d rather have oral surgery. Honest.

But in the past few weeks, I could avoid the truth no longer. I needed to balance out our team and I needed to find the perfect tech architect. In my view, every tech venture needs three architects – the vision architect,  the business architect and the tech/ product architect. Sometimes this is all one person, but not in our case.

So with a deep breath  – I began what I thought would be a painful process.  I was wrong.  In fact, I’ve learned much to my surprise, that the hiring process was the best gift I could give my business because I got to learn about the very essence of my venture itself.

I began the process hesitantly knowing that the type of talent I wanted can be highly selective about where they go. Quickly, I was lucky enough to get the chance to chat with the head product guy at a large, very cool social media company. He was thinking of leaving and he graciously agreed to hear my story. Then a few days later through another contact, I was put in touch with an “ex-Microsoft guy who was looking for his next project.”   I talked my heart out to convince him to see the vision.

Both of them gave generously of their time and advice. Both reminded me how much I love to talk to developers. I love how their individual creativity is reflected in their choice of languages. I love the quirky, binary-colored way they see the world.

But in talking to them during this process, I also realized I could not really express my vision with the technological crispness to satisfy these folks. I was horrified and I knew from experience, any hint of uncertainty would send the best talented developers running from the virtual room.

It was a surprisingly painful lesson I needed to learn. I thought I had created the elevator pitch suitable to satisfy any audience. I was wrong. I thought long about how they reacted and it was then I had a breakthrough. All of a sudden I could see where I had gone wrong in how I described the platform, and thus the venture. Through my openly sharing with talented people during this process, I vastly improved our architectural vision.

I confess. I would never achieved this revelation on my own or even with the team I have now.  My aversion to hiring could have deprived the company of this precious gift of clarity of technological vision.

I’ll end with a note of gratitude. To any candidate we are talking to now – my deepest thanks. To all future candidates – I can’t wait to meet :).

Judy Shapiro

P.S. – Wanna help architect the next big gig – (hey – optimism is part of job req’s :). We are working on creating The Trust Web. Interested? Drop me a line.