austinpreneur

How I got started in email

I'm often asked, "Why email?" The focus of my career has been email and I'm now the CEO of my third email company. 

I could tell you why email is great and why it's here to stay.

I could tell you how email drives most of the traffic to social.

I could tell you why there is still so much opportunity for innovation.

The truth is that I'm an email geek because I got into the beta program.

Back in 1995 I was a freshman in college at Carnegie Mellon majoring in Computer Science. It was an incredible time. I felt like the commercial Internet was being created all around me (funny, that feeling has not diminished over the past 15 years).

I had a PowerMac 7100 with 16 MB of RAM, a 250 GB hard drive, and a 17" monitor. It was a badass machine. There was ethernet in my dorm room connected to a high speed network - unlike anything I had ever experienced at home on dialup.

I had no software.

Open source was still immature. Linux and Apache were powerful but there wasn't that much else that was easy to use or reliable. This was before the days of free, web-based services. I was a college kid with no cash and so that meant I had no software to run on my badass hardware.

Beta programs were the answer. I couldn't afford to buy any software, but if I could get into the beta program I could get access to it for free.

This was back before the days of free betas. Netscape's web browser was the first big free beta program. The idea of an "open beta" was novel. Most beta programs were closed, invitation-only affairs. You filled out an application form and signed an intimidating NDA. Only a certain number of participants were accepted.

I applied for every beta program I could get my hands on.

In 1995 the web was hot. The coolest program was a web server, and the coolest web server was WebSTAR on the Mac (formerly known as MacHTTPD by Chuck Shotton). It was made by a cool little company in Berkeley called StarNine Technologies. I applied for the WebSTAR beta program so I could start writing CGI scripts.

Right next to the signup form for the WebSTAR beta program was another form for the ListSTAR beta program. I didn't really know what it was, but it sounded similar and asked the same questions so I filled out that form as well.

I was rejected for the WebSTAR beta program. After all, everyone wanted to beta test WebSTAR and what did I, some measly college kid, have to offer?

But I was accepted for the ListSTAR beta program. Hurray! Now I had to figure out what it was and how I could use it. It turns out that it was a graphical flowchart user interface to a Majordomo or Listserv style mailing list functionality.

I started playing around with it and participating in their own online mailing list forum. I answered questions for other users. Soon I was hired by StarNine as an intern and then I started doing consulting and customization work on the side. I would find new consulting clients by answering people's questions on the forums.

One day, one of my consulting clients asked me if I would run their mailing list on my server for a monthly fee, instead of paying me as a consultant to fix his server when it broke or needed changes. That was the beginning of my SaaS email hosting business, SKYLIST. At the beginning it was mostly forums and groups and then around 2002 in started transitioning to email marketing.

Fast forward 10 years and my license plate says EMAIL.

Steal all my email secrets on Thursday at Innotech

On Thursday the 16th at 9am, Dennis Dayman and I will be giving a presentation on email deliverability at the Innotech conference in Austin. Come pick our brains about whitelisting, authentication, reputation and the infamous spam folder! We're also a great resource to ask about the various third party email providers and services.

• How can I get in touch with someone who can really help me at Hotmail or Yahoo?
  
• What can I do to reduce the number of people who click "this is spam" or unsubscribe from my emails?
  
• I've been told that I'm hitting a "spamtrap". Now what?
  
• How do I get off a blacklist?
  
• Do I need a dedicated IP address?
  
• Can I buy email addresses to add to my list? What about list rental?
  
• Any other questions that you want to ask!

We'll be giving a 20 minute overview of email deliverability and then we'll open it up to the audience to talk about real problems you are facing and suggestions for tackling them. We need your help! Please come prepared with questions about your email marketing programs.

Here are the slides:

Deliverability Innotech 2008

Email Secrets from Deliverability.com Joshua Baer & Dennis Dayman The Basics Sender ID Authentication Domain Keys Authentication Delivery Seeding Feedback Loops Whitelists secret #1 relevancy is most important secret #2 reputation is more important than content secret #3 From and Subject are most important secret #4 it is hard to send email by yourself secret #5 there is no secret to deliverability tell us your secrets tell us your problems Resources http://www.deliverability.com/ http://www.returnpath.net/ http://www.pivotalveracity.com/ http://www.lashback.com/ http://postmaster.aol.com/ http://postmaster.yahoo.com/ http://postmaster.hotmail.com/

Bootstrappers will shine in the startup depression

Some really smart people have commented publicly about the US and global economic crisis at hand and what that means for startups. Jason Calacanis was one of the first, followed by Fred Wilson and Ron Conway (my good friend Ian Clarke has jokingly referred to me as the Ron Conway of Austin because I'm an early stage investor in so many different Austin companies). As I've been fundraising for OtherInbox, I've talked with many other entrepreneurs, advisors and investors and wanted to share a summary of what i've been hearing and how its affecting my direction at OtherInbox. Each comes at it from slightly different perspectives.

Jason, an entrepreneur, takes a very introspective view of how he wants to respond to adversity and who he wants to be as a person. He says the three main causes of startup failure are poor execution, a poor idea or external factors (in this case the market) and advises startups to focus on execution and make the most of the down time by being lean and acquiring good talent.

Fred Wilson, a venture capitalist, explains the view of a well-funded company with cash reserves of its own and experienced investors with deep pockets to draw on in tight times. He points out that companies who are not profitable or growing could have trouble, but that companies that are doing well shouldn't have trouble because VC's have deep pockets and will invest more capital to help weather the storm.

Ron Conway, a prolific angel investor, looked from the perspective of entrepreneurs about to take the plunge and raise angel money. He cautioned them not to quit their day jobs until they have secured funding for at least one full year of operating capital.

Ajay Agarwall, a venture capitalist from Bain Capital Ventures and friend from when we both worked at Trilogy software, pointed out that the typical Series A investment takes 7 years to mature and that 7 years from now is probably the right timeframe for the economy to recovered and growing. Consequently, he thinks that the next year will be a great time for smart venture capitalists to make early stage investments. He cautioned that later stage companies that are not profitable and have a shorter time horizon are going to have a tougher time raising capital over the next few years.

My first company, SKYLIST, saw incredible growth during the last recession. I started it in 1996, but we really started to boom in 2000 as the dotcom bubble deflated. True, it was the first time when I was focused on it full time, and not going to college or working at Trilogy. But I think the reason for the growth was that we were riding the rising tide of online marketing and email marketing in particular.

Even though the overall economy was down, some forms of online marketing grew. Marketing budgets were scrutinized and cut. Broadband Internet became pervasive and online marketing boomed because the audience was finally there and it was more measurable than traditional advertising. Budgets shifted from offline to online. Even though the total budgets were shrinking, the total amounts allocated to online were growing.

One way to be successful in a down market is to find these niches that may be growing as a result of shifting budgets and priorities. With currency, when the value of the dollar goes down, the value of gold goes up. Where is the gold in the market now? What opportunities have been created as a result of the credit crunch?

As I've been fundraising for OtherInbox, the current market conditions have certainly affected my goals and risk profile. I'm inclined to raise more a little more money and make sure that I give myself a longer runway. I'm searching for ways to generate revenue sooner than originally planned to cut my burn rate.

This is where bootstrapping will shine. All things considered, I'm kind of wishing I was bootstrapping a startup right now and am looking for every way to make OtherInbox more like a bootstrapped company. Bootstrapped companies are lean and efficient. Bootstrapped companies delay every cost as long as possible. Bootstrapped companies are resourceful. But most importantly, bootstrapped companies are forced to focus on the Right Thing at the Right Time because there is no alternative.

Imitation is the sincerest form of flattery

I'm smiling as I write this, but I must admit that it took me a while to see the positive side of things. At first I was very insulted and angry. But now I think it's a funny story and worth sharing.

Someone I don't know sent me a question on LinkedIn about the best way to raise money for his email marketing company. The question was sent to a group of people, not just to me.

Even though I didn't recognize the person, I clicked on his name to see his profile and try to help him out. I immediately saw that he was involved with email marketing and went to his company's website to learn more. When I clicked on the Consulting tab, I had a strange sense of familiarity reading the text.

It seemed so familiar. I went to the SKYLIST website and looked at the description of our consulting services... and they were exactly the same. I know that they copied and pasted the text from our website because I personally wrote the text on our site.

I'm just including one example below, although there are other examples of entire paragraphs that were copied word-for-word if you look for them. Every page of our website is clearly marked "copyright 2008 SKYLIST, Inc. All rights reserved."

Here is their website:

and here is the same section on our website:

Hopefully he'll see this post and change his web page. Either way, I'm flattered!

Bootstrapping is Effectual, not Causal

Last year I read about a paper by Saras Sarasvathy titled, "What makes entrepreneurs entrepreneurial?". Bijoy Goswami and others in the Bootstrap-Austin group praised it and so I filed it in my "Stuff to Read" folder and just got around to reading it this weekend.

With only 8 pages of text, it was a quick read. While the article doesn't talk about bootstrapping specifically, it immediately resonates with any true bootstrapper and has a lot in common with Demo, Sell, Build.

Saras explains the "common sense" model of causal reasoning, where you first select a goal, come up with a strategy to achieve the plan, acquire the necessary resources, and finally execute on the plan. This sounds perfectly logical and is the way that many people go about planning a new business.

But then she defines effectual reasoning, where you start by evaluating the resources you have and figuring out what you can do with them. What are you excited about? What skills do you have? What relationships can you leverage to your advantage? Once you have a place to start, get to market quickly and learn from your customers. Then start the process over now that you have more information.

In comparison, causal reasoning seems rigid and inflexible. Effectual reasoning is fast to start, low risk to experiment with and has faster iterations. By getting to market quickly and incorporating user feedback, effectual reasoning is more likely to produce the best product and better able to respond to a rapidly changing marketplace. Too often with causal reasoning, it takes so long to get to market that the market changes before you get there.

When I started SKYLIST at Carnegie Mellon, I didn't have some grand plan - I mostly just did things that people offered to pay me to do. I got into email hosting because I was rejected for the WebSTAR beta program but was accepted for the ListSTAR beta program. My first customers were all relationships that I developed while working with ListSTAR at StarNine. I used the PowerMac 7100 that my parents bought me for college to host them and I stuck it on the school network in my dorm room.

Starting UnsubCentral was a similar story. I wasn't planning on starting a new company. The CAN-SPAM law was passed in December 2003 and the opportunity presented itself. I didn't spend a lot of time researching the market - I just dove in and started building it and we launched the product in January. I thought all our customers would be other email service providers like SKYLIST - because that was what I knew the best. But it turns out that our primary customer base was advertisers because that's who is directly responsible under the law. Fortunately we built the right product and just had to refocus our sales efforts on the right customer.

And my current startup, OtherInbox, is no exception. I looked around at the problems with my own email that I want to solve. I leveraged more than a decade of experience working with email marketing in designing the initial solution. I taught myself Ruby On Rails and built a demo myself. Then I started using it.

After convincing myself that I was on the right track, I partnered with a friend from Carnegie Mellon to start building a version that could support multiple users. I recruited some of my close friends as beta testers. Right now we're learning more every day about how people use it and we're iterating until we have it right.

I'm not saying we won't ever take an investment. In fact its very likely that we'll need to raise money at some point in order to ramp up customer acquisition or to expand internationally. But the longer we can put it off, the more we'll understand exactly what to do with the money we raise. The more we understand our customers and our model, the less equity we'll have to give up.

Elvis has left the building

Friday was Joleen Sanborn's last day at work at Datran Media. Joleen started out as the office manager at SKYLIST in 2001 and then became my executive assistant. After more than 7 years putting up with me, she decided to move on to something new. I wish her the best in her new endeavors!

In typical SKYLIST style, we called in the King to help send Joleen off on a good note!