LifeMinders: Doing It By the Numbers
"Where's your hypothesis? Where's your data? Where's your proof?" It's 10 am at LifeMinders Inc., a Web-based reminder service based in Hernon, Virginia, and co-founder Steve Chapin is in full laboratory-scientist mode. For the past hour, Chapin, 37, has been arguing with his creative team over what to title the subject of a new marketing email that will go out to the company's more than 12 million subscribers. It's a big deal; in a way, it's what the whole business turns on. Founded in March 1999, LifeMinders reminds subscribers about everything from birthdays and anniversaries to the release date of a new CD by sending them an email, in which the company includes paid advertisements.
Which is why the company's performance can depend on a single email subject line. The subject must sound appealing, or subscribers will hit "delete" instead of "open." In their search for the perfect subject line, Chapin's people have been trying to top one another with their best material. At first, Chapin watches the process like a patient professor. But then he interrupts to ask whether anyone has actually confirmed these great ideas with data. Heads shake, and Chapin sends the team members back to their PCs. "Test, test, test," chants cofounder John Chapin, 34, Steve's brother. "A person with an idea and no data is just another ... " He pauses and smiles. "Well, just another person with an opinion."
If fast implementation is the name of the game, the folks at LifeMinders believe that they've found a precision formula — a business version of the scientific method used in research laboratories. Like scientists, the Chapin brothers and their 150 colleagues work not by "feel" or "gut instinct" but by testing cold, hard data. Every idea, no matter how brilliant it may seem, must first be turned into a hypothesis and then tested on a small customer segment. If the data comes back positive, then the idea can be unleashed on the rest of the world. "Our approach to the world is iterative," explains Steve Chapin. "Build, learn. Build, learn."
Better still, the Chapin brothers have found a way to instill their method with a kind of thrilling urgency. Using everything from weekly pep talks to strict deadlines — no project can take more than three weeks to complete — LifeMinders has managed a surprising number of successes in its first year, including a near-flawless series of launches, a $60 million ipo in November 1999 (and a follow-up offering in February that drew $87 million), and revenues that exceeded analysts' predictions by 70%.
On the surface, a scientific business model might seem to be a bizarre approach for the breakneck, seat-of-the-pants world of e-commerce. Yet it's perfectly suited to the LifeMinders product — a service that never forgets. Customers sign up at the company Web site, fill out a profile, and then receive email messages reminding them of key dates, plus customized information on goods and services. But it all comes back to designing email that is useful and appealing, which is where the science comes in. Using Web technology, LifeMinders not only tests emails before sending them en masse, but the company also continues to gauge the success of email after it has been sent out. The company knows, for example, precisely which messages are opened and by whom. That kind of feedback guides employees in creating their next wave of messages.
Both Chapins are veterans of exacting methodology. John was a systems engineer at consulting giant Electronic Data Systems; Steve, a Naval Academy graduate and a Harvard mba, managed credit-card databases at First usa. But LifeMinders has allowed the two of them to turn rigorous testing methodology into an organi-zational model. Indeed, from the minute that new hires walk into the building, they hear the mantra of "test" at every turn. At meetings, ideas and hunches are automatically framed in terms of testable hypotheses. "One of the first things that people have to learn to do here is how to think of everything in terms of hypothesizing," says Steve Chapin. "You have a great idea. Now, how can you test it?"
After a hypothesis has been framed, and a test has been run, everyone focuses relentlessly on results. At LifeMinders, all kinds of data are openly displayed on huge sheets of paper hanging from office walls. "When I first arrived at LifeMinders, I couldn't believe they left that kind of information in plain view," says Tim Hanlon, 42, former senior vp of marketing and communication, who left LifeMinders in February to do consulting work. "But that's the point: To see how the company is doing, you need input from everyone."
In fact, for all the intensity of the methodology — and the 70-hour workweeks that go along with it — the near-obsessive focus on tests and data has created a remarkably open, friendly, relaxed culture. For example, because all ideas are judged objectively using hypotheses and tests, workers can be fearless about offering up their ideas and concepts. In the same way, failure is transformed — from a personal shortcoming to the neutral outcome of an objective test. "As long as you continue to learn from something, it's not a failure," says John Chapin. "Failure is when the process stops moving forward." The scientific method also gives workers the ammunition that they need to speak out: Because the focus is on projects and results, even the newest hire can push back when orders from above conflict with data.
Perhaps the biggest benefit of the Chapins' method, however, is the sense of urgency that it instills in the company. Steve's insistence on a three-week limit on all projects, for example, has not only forced his teams to be disciplined; it has also taught them the art of the trade-off — learning when to compromise on details in order to meet the larger goal of meeting a deadline. Recently, team members who were working on a seven-day weather-forecasting feature realized that they couldn't meet their deadline. So they scaled the idea back to a five-day forecast — and got it done on time.
LifeMinders's method has succeeded in turning scientists into activists. On any given day, half of the company is in a state of eager anticipation and suspense, waiting for the results of the latest market test. This may be LifeMinders's biggest achievement: distilling effectiveness into a single, measurable result. "We have a bottom line and market goals, just like everyone else," says Steve Chapin. "It sounds like a cliché, but when our people work late hours, they do so not for 'success' in the traditional sense. They're looking for truth — and they're looking for it quickly."
Paul Roberts (firstname.lastname@example.org) is a writer living in Washington state. visit helloasia.com (www.helloasia.com), Barclays Global Investors (www.barclaysglobal.com), Intel (www.intel.com), and Lifeminders (www.lifeminders.com) on the Web.
SIDEBAR: Frictionless Commerce: Going Fast by Slowing Down
One of The candidates for the finance position at Frictionless Commerce Inc. had looked so promising. Stellar credentials, a great track record, and flawless social skills — just what was needed by the Cambridge-based business-to-business startup, whose product, a sophisticated value-comparison engine, lets users comparison-shop online in over 150 product categories. But then cofounder and chief technical officer Robert Guttman, 30, introduced the candidate to the company's administrative assistant, and everything fell apart. "She treated our administrative assistant like a servant, rather than like a peer," Guttman recalls. "It wasn't a huge deal, but it was enough to tell us that she wouldn't be a good fit."
At Frictionless, whose search engine guides shoppers through the popular Lycos Web site, the key to getting things done fast is knowing when to slow down — especially when it comes to hiring. No matter how brilliant your idea may be, one wrong hire can set you back or even knock you out of the game completely. Too many Internet companies give in to the "temptation to grow as quickly as possible and by whatever means possible," observes Guttman, who founded Frictionless in June 1998 with three fellow mit business-school graduates. "We decided to make sure that we had the right kind of people in place first."
For Frictionless, the "right kind of people" are those whom cofounder and president Alex Kleiner, 32, calls "builders" — bright, passionate, tech-savvy candidates with the capacity to look beyond short-term gains and help create an awesome organization. And while such criteria are hardly unique, Frictionless takes its time finding just the right folks — and manages to do so without killing itself in the process. The key: a self-service recruitment process in which candidates not only help select themselves but also begin job training while they're still undergoing the interview process. From the moment that candidates make contact with the company, they're training to work there — a system that not only saves time but also finds recruits who fit the Frictionless model, well, frictionlessly. "Knock on wood," says Guttman, "but so far, turnover is zero." visit frictionless commerce on the web (www.frictionless.com).
SIDEBAR: The Role(s) Model
In the course of analyzing why so many of their potentially good ideas went unexecuted, the managers at Barclays Global Investors, a San Francisco - based retirement-fund manager, came up with five distinct roles that every project must have in order to be successful.
Sponsor: The money partner — the principal or upper-level executive who controls the dollars and lends credibility. If you've got a sponsor, it means that your project has been checked against company goals. What to watch out for: slow death. Sponsorless projects tend to run out of support halfway through implementation.
Business owner: The line executive who has the authority to make day-to-day decisions. Owners are project champions: They have the expertise, power, and incentive to drive a project. What to watch out for: endless meetings. Projects without owners are rudderless; they lack direction or drive to reach the finish line.
Project manager: The mechanic — the person whose sole responsibility is bringing in deliverables on time. The pm doesn't need to know everything; that's the owner's job. Project managers' only tasks are to meet deadlines and to make sure that owners have the resources and information that they need in order to make decisions. What to watch out for: crash and burn. Projects without project managers do not get done.
Functional-technical people: The nuts-and-bolts experts who do the actual content work of the project. What to watch out for: start and stop. When owners and project managers must step in, it leads to endless delays.
Support staff: The bench — backup project managers and functional-technical people who can be called upon if a project loses a person or needs more resources. What to watch out for: panic. If a project lacks support staff, any problem can quickly spiral out of control.
To learn more about the Barclays Global Investors role model, contact the company by email (email@example.com).