If I were the Yahoo! CEO (for a day…)

So many people around the tech world have been writing about the current  Yahoo CEO’s problems with honesty.

Which got me to thinking – what would I do as the Yahoo! CEO (even if just for a day – though really it will take years to revitalize Yahoo! if it is even possible to do so)?

First the full disclosures

1.  My resume is messy. I don’t have a college degree (I entered the University of Chicago in 1991 as part of the class of 1995, but in 1994 I took a year off  - I was 19, on track to graduate at the age of 20 and had just had a very rough year emotionally as my then girlfriend left me for another woman, that year off during which I wrote a play and parts of two novels, turned into many more years as I was able to first start a business selling collectibles that paid extremely well and then started a series of computer consulting jobs that just kept paying more and more, in 1998 and 1999 I returned to school while also working full time, wasn’t able to negotiate a leave of absence to finish my degree so quit but instead of finishing completely took a better job offer – after seeing my clients through the Y2K transition and after not getting paid commissions on the nearly $2M in renewals and new sales I had negotiated I left in early 2000 to start my own company. Since 2000 I’ve worn many different hats at various times – as an entrepreneur, consultant, conference organizer, writer/blogger, advisor to startups and more – none of my various startup ideas have resulted in big successes and at times have overlapped – so yes, my resume is “messy”).

2. At present I’m not a direct Yahoo! shareholder (though mutual funds my wife and I own likely hold some Yahoo! stock) but I have all kinds of personal conflicts of interest. Lots of friends who were at one time employees (and even senior leaders) at Yahoo!, plenty of friends across Silicon Valley (and indeed the world) who are investors in competitors to Yahoo! in one form or another, have sold companies in the past to Yahoo!, are building companies that compete with Yahoo! or who work at competitors to Yahoo! including Facebook. I also have a number of consulting clients, including some in whom I have small equity stakes that may compete with some division of Yahoo! now or in the future. For that matter I’ve personally tried ventures that would have competed with some part of Yahoo!.

But all that aside here is what I would if I were offered the chance to help Yahoo! turn around.

Step 1. Immediately halt the patent trolling lawsuits & apologize to the tech community for the lawsuits (including to former employees whose works were used as part of these lawsuit.

The lawsuits even if there is a chance of “winning” via a large settlement (or judgement if the case makes it to trial) of money from the flush with cash post-IPO Facebook would be at best a Pyrrhic victory – the cost in future trust, in diminished ability to hire the best and brightest or to retain those who remain at the company would be immense – making any future hope of innovating out of the current mess difficult to achieve (at best).

Step 2. Repair relationships with Alibaba and SoftBank. 

See this article from February to see what I’m referring to if you aren’t familiar. According to a more recent report a new deal without SoftBank may be in the works. Clearly this is one of the best remaining assets that Yahoo! has which could be divested to generate cash to fund reinvigoration efforts for the rest of Yahoo! However while taxes matter, Yahoo! also needs to repair the underlying relationships with two major Internet giants (Alibaba and SoftBank) if Yahoo! wants to remain a powerful and viable global Internet company. I don’t know what it would take to repair these relationships – but if I were CEO doing so would be a very high priority.

Step 3. Clean house with the Yahoo! board.

Somehow the Yahoo! board has presided over the long, painful to observe from the outside, decline of what was once one of the most innovative online companies to one that is while still important decreasingly relevant. The board has dickered, fought founders and shareholders alike and generally underperformed in a huge way. Of course, if I were appointed CEO (for that matter this is true of nearly any new CEO) I would likely “owe” the board for that appointment – but this is in part one of the problems. As the founders have departed there seems to be a big leadership and vision gap at Yahoo! Perhaps a smaller and newer board, refreshed by a mix of outsiders, former insiders and even a critic or two would be able to help guide the company into a new direction.

See http://specials.yahoo.com/forward/ for what the current board and revitalization effort looks like. Given the current scandal I don’t think it is working as intended.

Step 4. Define a clear vision for Yahoo!

Go read the new CEO’s Strategic Vision for Yahoo!. Don’t worry I’ll wait – though I do recommend you have a large shot of espresso first…

Can you summarize his vision? Not sure that I could.

And I think that’s the problem. Yahoo! sees itself as being so many different businesses (and has grown so large that it really is) that it no longer has a clear vision about what Yahoo! does (or should do) or what value Yahoo! offers to others. Is Yahoo! a technology company? A media property? An advertising platform? A search engine? A portfolio of Internet services and properties? Something else?

Yahoo! needs a clear, concise, simple vision that dictates everything that Yahoo! does – something that every employee, partner, client, customer or site visitor would get immediately and understand. This is HARD.

I can’t claim to have it fully – but I think it should be something like:

Yahoo! makes the web personal.

Okay perhaps that needs work – but listen to my logic. When Yahoo! launched years and years ago and as they grew the crown jewel of Yahoo! was not any specific website or part of Yahoo! – it was the user profiles that Yahoo! had for every user (and they had millions at a time when few sites had over 100k users) which they were able to extend to nearly every new property or site they launched. These user profiles meant that you could add a new service that Yahoo! created without needing to create a new username and password, user profile and more.

Now this seems like a minor achievement – Yahoo!’s profiles have been overtaken for more web users by their Facebook accounts (or their Twitter accounts) which are the login tool that millions of people use to access other services beyond Facebook or Twitter. But done well it is still an opportunity for Yahoo! – and one that starts to help inform what Yahoo! should focus on (and what they may want to forget about).

It is also a question of what is Yahoo!’s identity and offering to companies that will partner with Yahoo! or which will generate revenue for Yahoo! in some manner (most probably via purchasing advertising through Yahoo! in some capacity – currently limited mostly to Yahoo!’s own properties). If Yahoo! were to focus on making the web personal – making it relevant and interesting and useful to every user of Yahoo! – across whatever service(s) and platforms (including sites and services not created or owned by Yahoo! potentially) this would be challenging – and would require that Yahoo! take the side of the individual user over the advertiser – but in exchange the advertisers would get a more valuable placement and likely see far better results when they do (since Yahoo! would in theory only show ads when they were really targeted and of interest to a given user).

In today’s Internet this would also require that Yahoo! focus on building products and services that cross ALL platforms and forms – not just the web but mobile, touch, TV and more. Find ways to expose their services and properties that made them available on every platform – including making advertiser’s campaigns available and relevant to the given form factor. This would be hard, this would be challenging, this would require rewiring/rewriting/reinventing most of Yahoo! currently. It would also require renewed interest in building products and services for non-Yahoo! developers to leverage (Yahoo! just a few years ago was on the forefront of building open APIs and hosting Hackathons to encourage developers to build on top of Yahoo! platforms but I think they never fully committed to this and never made it a strategic priority). I would encourage Yahoo! to explore directions that included revenue sharing with outside developers – potentially putting Yahoo! in the middle of a vibrant mobile development future. Yahoo! would also need to explore lots of service offerings that instead of relying on advertising and mass scale rely instead on subscriptions and direct payments by users – again including pass through payments to outside developers in many cases.

Would this be enough to “fix” Yahoo!? 

I don’t know but it would be a start.

And there is, of course, “one more thing…”

Yahoo needs to streamline and eliminate as many layers of management and approval processes as possible. Likely this means a lot of transitions for current employees and a total rethinking of their current workforce. This might not be easy or painless but I would start by carving out small entrepreneurial teams within ALL of Yahoo!. Teams that would have full authority to spend a given budget in whatever manner they require – with encouragement to be creative – and few requirements that they wait for a committee to approve everything. This would of course work best if a unified, simple vision can be shared by every employee – something would make it easy to answer the question of “would this new …. further the big picture vision for Yahoo!?” – would it help make the web more personal (for example). As much as possible I would look at models from innovative firms such as Valve to attempt to flatten the structures of Yahoo! as much as possible. This is, of course, challenging in a global, large public company – but it isn’t impossible.

brainstorming about business opportunities

I am an entrepreneur. When I dream, I dream in business models (seriously, though not every night). That said, I need to find a way (or more likely many ways) to make money in the current economic environment. Projects or businesses which will prosper now and as the economy turns around will have many growth opportunities. Businesses which may have some “exit” in mind – though my dream exit is less an exit and more a route to enduring success and sustainable growth.

What do I mean by that?

I don’t particularly want to build something to sell it – even to sell it to the public (i.e. via an IPO). Rather in my ideal world I build something which can stay private, but can also grow into a large and comprehensive entity, with ongoing growth into new opportunities while building on a solid base. A business which would employ a lot of people, share great rewards with those people (as well as with partners and customers) and in turn have a large impact on the world.

Why would I want to keep such a business private? Well first and foremost when I think of great companies only a handful of them are public – and if anything being public limits them in a wide range of ways. I think a very well run, private company, has much greater flexibility than a public company and can more often place long term bets (which admittedly is not always doable in the tech world – but then again my fantasy company though almost certainly driven in part by technology is not a pure tech company). Yes, being private means that as a company you have to be a bit more creative with how you reward your employees – and with how as the owners you diversify your own finances – and with how you obtain the resources to grow and build the future.

So unlike some of my peers here in the valley, my goal is not to build something to sell it, or to make a “quick hit” for myself (though certainly I wouldn’t complain about that) instead I want to build a business (or likely related businesses) which give me a base to explore lots of ideas and a platform from which to have a big and oversized impact on the world. Starting by the customers I serve, the business partners I help, the employees (and their families) I help support.

On a personal level money matters to me – but only up to a point – what matters more is the freedom and flexibility to have a big impact on the world. I want to travel a lot – not just to be elsewhere – but experience a lot. I want to spend a lot of time around the smartest and most impactful people in the world – from formal experiences and conferences – and less formally at lunches, dinners, salons, and meetings all over the world. At somepoint in my life I want to live in many different cities (including outside of the US) and even when I have (as I hope to sometime not all that far from now) a family I would hope to raise that family in multiple cities and countries – and to expose my future children to many cultures and ways of engaging with the world.

So with that as my goal(s) what opportunities should I be pursuing in 2009 (and the rest of 2008)?

In the past few weeks I’ve blogged about a number of business opportunities and ideas I have had: Radio Schedules 2.0, a new(ish) approach to local media, the future of media being curation, and what I would have submitted to the Knight Foundation

A common theme to many of my current ideas have been some degree of rethinking of media – both on and offline – as well as a newish approach to how commercial content plays a role in the media – more than it does currently online but in somewhat different ways than it does offline.

I am still also passionately interested in the core idea which led me to start Nearness Function over a year ago, ideas around how a new form of advertising network could function as a buffer and valueable partner for software and new media firms and a valued partner for advertisers and their agentcies and media buyers. At the core of my belief is that brands matter – more so now than perhaps ever – and that to build great brands requires sustained, ongoing investment and engagement – and that as attention shifts to the “web” (or more accurately to services and communities woven together largely over and via the web) brands will have to engage with audiences via these same services.

And unlike many in Silicon Valley I do not find this inherently a bad thing – if anything I think it is inherently a good thing – that great brands at all scales of brands serve a very valuable and useful purpose. A few months back I launched a new blog, which I need to update more regularly, Slow Brand to discuss my views on branding (and occasionally food) though I need to blog there on a more consistent basis to build up that blog and get my voice out more often.

My friend Tim Ferris (yes of the 4 hour workweek fame and who is launching a new TV show Trial by Fire this week on the History Channel) talks about Lifehacking and indeed to a degree I should implement many of his lessons and suggestions, but my goals are not entirely (or at least not solely) about myself – my body, my life experiences – but are also very much about what I can do for others, what I can build and help create.

As I think about what I want to do I find myself pulled in a number of not entirely complementary directions.

1. I am a very value-adding consultant. My primary skill being to brainstorm with people, especially senior management/founders/investors asking tough questions and helping explore business models, potential partnerships, avenues forward and technical evaluations and decisions. I’ve been told by one VC friend that my 1 hour, emailed evaluation of a company they were looking at, entirely on the basis of public data about the firm, came to the same conclusions it had taken them over 1 month to reach. Now, there are challenges packing up and promoting my consulting and much of what I have done in the past has been on a fairly informal basis – I’d love to do much more of this type of advising/consulting, for a high but fair fee (mostly $ but in some cases perhaps also equity). I think I’d also be very valuable for an investor or M&A person in helping evaluate potential deals.
2. I am a skilled facilitator. I’ve been doing “open space” events since the mid-90′s and have become skilled at the art of facilitating open space events and meetings, as well as the related skill of helping curate other forms of events. This is an art – done well my role almost disappears into the background – achieved by means of the invitations, the settings, the structures lightly imposed upon the event and the group, and gentle nudges and one-on-one conversations and slight changes to the schedule made on the fly. I enjoy such work – whether for a non-profit event or for for-profit businesses and I would like to do more. Especially events which might involve the MeshWalk format I’ve used many times quite successfully. I’ve organized dozens of evening events, helped with lots of weekend and multi-day conferences, and organized a couple three+ day conferences on my own. (The first of which was over 20+ years ago when I was in high school, a science fiction convention which still occurs to this day in no small part because we designed into it a great sustainable structure & financial model)
3. I am a writer. In the past years I’ve written hundreds of blog posts and lengthy emails to mailing lists, not to mention over 7000 tweets. My non-fiction writing has blossomed in the past few years, occasionally even earning me if not direct income then some value in trade (conference passes and access for example). I have multiple non-fiction as well as fiction book ideas, just a few weeks ago in fact I started a new fiction book which is going well so far (though as I write this post it is still early, about 4000 words written but it is going quickly and I have much to write). I also have a major piece of non-fiction I want to write on Networked Economics a topic I have been thinking about since at least 2004 and which I started and ran multiple conferences in no small part to help myself learn.
4. I enjoy connecting people and businesses and serving as a translator between industries. Yes, I am a geek, I wrote my first application when I was about 8, am the 3rd generation of my family to write software (my grandfather was one of the first employees of Rand Corporation and then later at Aerospace Corporation he oversaw the deployment of early IBM mainframes to detect nucluer explosions, my mother has been a programmer since the late-60′s and I would do her student’s flowcharting homework as a child). I’ve had a server on the Internet since about 1991, served as an editor of some IETF standards. In short I have deep and extensive “geek cred”. But I am also passionately interested in business and economics – in topics such as branding and business and process innovation which are non-technical. I find that I can offer a lot of value bridging between the possibilities of technology and the needs of business.
5. I come up with business opportunities. However though I have, I think, had many great ideas I also need to work with others to implement my ideas. While I have many skills I do not have every skill needed to build a successful business (or at least have not had them all so far – still working on it). I have ideas about technology and design which are best implemented by others. While I can and have sold at a very high level, my sales process is too slow and sporadic for sustained growth – I need to work with others to keep myself closing (and/or to help close and implement deals). I will keep practicing the art of the close and of selling – it is a necessary part of being a successful business person, but I also know that my value is multidimensional and that in many ways I would make more money with the right partners than I could alone.

So those are where my thoughts are at the moment. I have many opportunities I’m working on and many ideas (probably too many ideas) but I am faced with the dilemna of evaluating which to pursue now and how to best go from my current state of not enough income to one of a surplus of resources – cash but also other resources such as great staff & partners.

I welcome suggestions and opportunities.

Advertising in Applications – a workshop series

As you may know if you have met me recently and/or have been reading my blog regularly, I am in the midst of starting a new company, Nearness Function, which is an ad network focused on placing commercial messeges, especially branding messages, inside of applications. We take an expansive view of what an application is – so we will work with web applications using AJAX, widgets, Flash applications, desktop applications (which connect back to the web), mobile applications. We are also exploring helping publishers of certain types of rich content such as podcasters and video bloggers – we’ll definitely work with media players which might play such content and as rapidly as we can build out the infrastructure we will expand the ad formats we can serve to include video ads which have had great success as an ad unit in many applications already.

As I speak with publishers (in our case mostly software companies) and with advertising agencies, media buyers and direct advertisers I have been struck by the range of experiences and questions around how to best place ads inside of dynamic applications. These questions range from debates about the formats that work to questions about what metrics and pricing models can be used to sell and track these ads. In our role as a network we have to provide solutions to the technical issues of getting the right, targeted ads in front of the individuals who use a given application, we also have to address the business needs and goals of both the media buyers, ad agencies, advertisers and publishers – all while also remaining focused on the experience of those individual users whose actions and reactions form the basis for the value of the advertising.

So, starting at the end of January and continuing on a regular basis we are starting a workshop series on Ads in Applications. This will be a long lunch to start with the first event to be held here in San Francisco at the end of January. Future events will include more lunch workshops and, I hope, some open to the public events in the evenings which will have a more traditional speaker format.

The first lunch workshop will be by invitation only. If you are reading this and would like an invitation contact me directly – please include a note about why you are interested in participating which includes your current role & company (or companies). The workshops are intended for senior people from application companies (often founders) and senior folks from the ad buying side. Select investors who have a portfolio of firms in the application space will also be welcome to participate – though they are encouraged to invite representatives from their portfolio firms. For the workshops press, including bloggers, are specifically not invited – these will be off the record, working discussions. My hope is that from these closed events we will also organize some open to the public events and/or come up with some public proposals – either for standards or as suggestions to standards efforts at organizations such as the IAB.

For the first workshop the format will be highly collaborative discussion, we will be a relatively small group and will all have a chance to both talk, listen and ask many questions. My hope is that in a few hours we can cover a range of ongoing questions and issues – including formats, metrics, measurements, definitions of “targeting”, acceptable pricing models (which both drive metrics and are in turn driven by what can be measured), how to define success, and various best practices around the integration and targeting of ads. I hope also that we have some discussion about how to disclose commercial content inside of a variety of types of dynamic applications – in many small widgets and in many types of other content what is an “ad” can not always be fully obvious.

Watch this blog for more details about the workshop and contact me directly (and/or leave a comment here) if you would be interested in attending, hosting, or helping organize these workshops.