Today we are making some changes at Six Apart. We are reducing the size of our full time staff by around 8% and are making some organizational changes as we prepare for 2009. This note is to provide some detail and context around these changes.

Everyone is aware of the challenging economic times we face. The uncertainty of 2009 has made planning very difficult but it is clear that next year looks very different now than it did just a couple of months ago. While it would be easy to just blame the economy for these changes, however, the truth is more complex.

This year was one of profound growth and change for Six Apart. In addition to welcoming almost 90 new people and growing to a company of over 200 employees, we launched Six Apart Services, Six Apart Media, Blogs.com, Movable Type Open Source and MT Pro, a suite of TypePad-powered products, including Blog It, Blog Link, the TypePad iPhone app and TypePad AntiSpam, and reached the final stage of the biggest technical project in the company's history: the migration of TypePad onto a new platform. And, as you all know, we aren't done yet, with several of our most significant product releases still to come this year.

From a financial point of view, the company continues to grow with Q4 2008 on track to be our biggest revenue quarter ever, and cash flows from our revenue, past financings, and sale of LiveJournal providing funds that will serve us well going into next year and beyond. Despite the challenging economic environment, we estimate that the depth and breadth of our products and services will allow us to continue growing revenue throughout this downturn.

So why are we doing this? First, as with many companies these days we are being proactive about keeping our expenses low. Second, with so many changes in 2008, and looking forward to the changing market 2009, we have to rebalance our organization accordingly.

We've been reminded lately that blogging was born out of the last recession in 2001 - 2002, and that during tough economic times creative voices look to powerful, cost-effective ways to connect and communicate with the world around them. With that backdrop, here are some of the organizational changes we are making and why we feel they are necessary:

• Creating Six Apart Genius group. We are refocusing our marketing efforts from promoting Six Apart to helping support our bloggers and clients directly. Our marketing, community, and support groups will merge to create a single team whose mission is to help our bloggers be successful. Despite the economy, or perhaps because of it, we believe that more people will be turning to blogging to promote themselves or their business, and we want to provide them with more than just great technology but also help with getting started, design, building an audience, revenue generation, and more. We are committed to having Six Apart remain the best resource for individual and professional bloggers around the world. Bar none.
• Growing Six Apart Services. Our professional services group has grown significantly as our larger clients are increasingly using Movable Type and TypePad as cornerstones of their broader online strategies. Companies have always come to us to help them compete in a modern, social Internet but now they are also looking for more cost effective ways to run their entire web sites and seeing MT in particular as a complete web content management solution. With this has come the need for more support and services. Today we will be transferring several people from around the company into Six Apart Services and have more open positions in that group.
• One hosted technology team. As we all know, the TypePad migration has been a long and arduous project that organizationally split much of the engineering and ops team around various pieces of that project. As migration completes and we move forward, we are bringing the hosted engineering, analytics, infrastructure, open platforms, and operations teams under one leader, Ben Trott.
• Moving forward with Six Apart Media. While we expect that online advertising will be hard hit by this economy, analysts still expect Internet advertising to grow and we expect that Six Apart Media will continue to grow in 2009. We've had tremendous response to our advertising program that we launched in April which now includes almost a thousand bloggers and continues to grow rapidly. We are committed to serving these bloggers and helping them make as much money on their site as possible in this environment. We will continue to grow our sales force and account management teams to meet this need.

The management team doesn't take these changes lightly and agonized over this decision. However, our first responsibility is to the company as a whole and we feel these changes are the right ones to keep the company competitive, secure, and positioned for future growth.

As I've said several times in the past, all companies face adversity from time to time, but the mark of a great company is how it responds. Today is a day when we will be tested. A day to help one another. And a day to say some goodbyes.

Tomorrow will be about redoubling our efforts to create an even stronger focus on what's made Six Apart successful: the bloggers we support.

Thank you for all you do.

• Collaboration will help us do more with less. The idea is that collaboration can lead to greater efficiencies and reduce the amount of internal resources required for projects. Collaboration leads to better information which helps make better decisions in terms of how to allocate resources. Collaboration also takes advantage of prosumers and social networks where individuals can help co-innovate with companies at a lower cost than using exclusively internal resources. There's an assumption underlying this scenario that there's some surplus capacity in the economy because a) companies are cutting back on projects, but not necessarily eliminating all of the corresponding staff, and b) those employees that are cut will be available for contract work and targeted initiatives. In fact, this may even be a good time to stock up on promising young talent. The pro-collaboration folks suggest that collaboration can lead to new growth opportunities that will help companies differentiate themselves in difficult times. Extra cycle times may also be directed at innovation and R&D; there's a lot things you can do during rainy days and building a pipeline of products and services may be one of them.

• There's no time for collaboration; doing more with less means we've got to hunker down. With an economic downturn companies will not be willing to appoint resources to collaborative projects. Since the return on investment of collaborative initiatives is not always apparent, employees will also not be willing to allocate their time on activities that are not measured in performance reviews or not seen as directly contributing to the bottom line. From an employee perspective, it may make sense to hoard knowledge in tough times and be less collaborative in order to make yourself indispensable (i.e. prevent being eliminated). The hunkering down managers believe that collaboration is risky and can lead to wasted resources on dead-end projects. Moreover, they frown upon self-organizing behavior; suggesting that it will result in unfocused initiatives. It's time to run a tight ship and that means scrutinizing all discretionary pursuits, focusing on internal resources, cutting salary expenses where possible, and getting remaining salaried employees to shoulder the extra weight.

Two opinions; two very different strategies. What do you think?

You could easily argue that perhaps this effect so far has been contained to the world of the web and perhaps even mostly in the technology sector, and that fields like investment banking or executive management are as focused on candidates with MBAs as they ever were. Still, the question that has been on my mind for several months now is whether we are seeing a shift where some of the core benefits and skills that people expect to recieve from an MBA are now readily available through social media. In particular, I'm thinking of four areas:

1. Collaboration. Learning how to work in groups and with others in a team has long been a hallmark of the format of most MBA programs. Today with BarCamp style events like StartUp weekend, crowdsourcing sites, and blogs there are plenty of opportunities to virtually collaborate with others to solve problems. For those taking advantage, they may be learning a very similar skill to what they may get from a business program.
2. Network. Long heralded as one of the major benefits of doing an MBA, the network of your fellow graduates would be sure to help you in your future career - perhaps to get your next job, or at least to close new deals and be more successful in your current job. Now my social graph is on networks such as Facebook and LinkedIn. Every day I get a dozen or more new invitations to connect with people and this graph is rapidly expanding. If I needed help finding a new job or identifying a vendor, I would first turn to this network.
3. Education. Of course, let's not forget the most important reason (in theory) to get an MBA ... to get better educated about the world of business and to increase your success in your career. Again, there are thousands of business professionals who are often some of the best minds in their fields, blogging or sharing stories of their success and what you can learn from them. Simply focusing your attention on reading (or listening or watching) these, and combining it with an initiative to learn from those experiences and put them to work in your career could be the most educational thing you can do.
4. Money. The last point here is often the most important for those considering an MBA: that they can make more money. While this is certainly true in terms of starting salary in a managerial position out of school, I wonder if the numbers are skewed by the fact that it is often the most ambitious people in business who are pursuing an MBA. Of course, they are the ones that achieve the fastest salary growth, but is it due to their MBA or the fact that they were inherently ambitious? I realize that this question may depend heavily on the industry within which you work as well.

Personally, I did get a BBA from the Goizueta Business School at Emory in Atlanta - and I feel that experience was well worth it. But my question is whether social media today may be replacing some of the traditionally perceived benefits of doing an MBA? And if so, I believe what it means is that the best MBA programs will need to continue to innovate and offer candidates more than they can already get for free through social media and the Internet.

Teen blogger/entrepreneur Jessica Mah has a new startup that cost her $500 to launch. It is an internship job board called InternshipIN aimed at college students who want a dedicated instead of having to trawl through the major job boards. Mah, who operated her own Web hosting startup in high school, is now 18 and a junior at Berkeley. She started InternshipIN with two other students. It cost them less than $200 to get a prototype up, and another $300 to get the Web design sliced so that it would load faster. Says Mah:

The project is bootstrapped with a few hundred dollars to cover hosting. Part of my reasoning for starting internshipIN was to show my friends (and the world) that it doesn't take more than a $200 to throw a website together. The manpower required to put together the site was absolutely minimal.

You can tell. The site is still pretty raw. It scrapes internship listings from Simply Hired and allows employers to post their own. By default, the internship search page figures out your location by your IP address and lists internships in your area. You can refine the search by location or keywords. But there is no way to browse through different categories or see recent listings. The navigation and search needs work.

There are alternatives, such as After College. But a site that just does internship listings could work. What would be better would be a site that combines listings with ratings. Maybe Mah should try to pair up with InternshipRatings.

As an employer, the listing process is pretty straightforward. Although, one major drawback is that the email you sign up with for an account is listed on every job posting. That is just asking for spam (the email should be hidden and mediated through the service instead). I created a listing for a TechCrunch internship. Okay, I basically copied Twitter founder Evan Williams' recent job posting for an assistant, and made a few slight changes:

This is a unique opportunity for an ambitious, multi-talented individual who wants to see the inside of a fast-moving blog startup and work closely with the co-Editor. The ideal candidate is a future journalist or entrepreneur who is willing to work hard and do a wide variety of non-glamorous tasks for a few months in order to get their foot in the door, learn, and make connections. You will work directly with TechCrunch co-Editor Erick Schonfeld, with the simple goal of saving him time. Which means: The level of work you'll do is only limited by your capabilities. Are you capable of: Writing blog posts under deadline? Researching a company? Coding? Great, as long as you're also willing to do Google searches and make phone calls. Essentially, you should be overqualified to be an assistant, but not have a problem doing assistant-like tasks. In exchange, you'll get unique visibility into a unique media company, a great learning experience, and the chance to move on to do many other things (at TechCrunch, or elsewherewith a strong endorsement).

If there are any takers, email me at erick [at] techcrunch. It is unpaid, but who knows what it could lead to (any out-of-work journalists are welcome to apply as well). We also have an opening for a Crunchbase analyst, and that even comes with a salary.

Crunch Network: CrunchBase the free database of technology companies, people, and investors

It's not clear from the site if they are promising a six figure salary for everybody that signs up, or if everybody that signs up will just be asked to split it up equally.

Here are the membership benefits touted by BPMN:

• Revenue. The mission is to provide members with a six figure income from multiple revenue streams, including an affiliate program.
• Stock Ownership. All members who sign-on prior to December 31, 2008 will be gifted equity in the company. This way when the BPMN is successful, all members who helped get the network launched will benefit too, not just the guys at the top.
• Promotion. Through the SocialRank search engine and our network of Blogger & Podcaster Guides (distributed through mainstream media), BPMN members will have their content promoted to millions each month.
• Healthcare. BPMN is working on creating a healthcare program that will enable members to have access to quality healthcare if they desire to make blogging/podcasting a full time job.
• Discounts and Freebies. Members will include access to exclusive deals and promotions provided by BPMN partners. At launch this will include $2,000 in services from PR Newswire, a powerful promotional service.

The Network, formed from a merger of four companies: Fuel My Blog (a UK blog social network), Podcast Pickle (a podcast social network), SocialRank (blog search engine) and Blogger & Podcaster Magazine plans to launch in the first quarter of 2009.

Call us skeptical, but we'll keep our eyes open for more BPMN news.

via TechCrunch

Who was the highest paid individual in Senator John McCain's presidential campaign during the first half of October as it headed down the homestretch?

Not Randy Scheunemann, Mr. McCain's chief foreign policy adviser; not Nicolle Wallace, his senior communications staff member. It was Amy Strozzi, who was identified by the Washington Post this week as Gov. Sarah Palin's traveling makeup artist, according to a new filing with the Federal Election Commission on Thursday night.

Ms. Strozzi, who was nominated for an Emmy award for her makeup work on the television show So You Think You Can Dance?, was paid $22,800 for the first two weeks of October alone, according to the records.

Okay: $11,400 a week to do her make-up? And they were complaining about the Newsweek cover? This is no hockey mom. She's America's Next Top Super Model!

Sometimes, it's worth flashing a bit of a public reminder that even though it seems like lots of us are deeply passionate about this space, most folks don't exactly understand what we're talking about. That's because technically, they don't need what we do to make money and go on with their lives. They're happy. Take a cab ride and ask them about Twitter. Ask the folks at the grocery store if they're on LinkedIn. Check and see whether anyone at the local pizza place has a blog.

We tend to forget we're in the future world. Our little close gooey center is comprised of people who think FriendFeed needs to adapt and improve, while most of our workplaces are still deciding whether to allow instant messenger clients inside the firewall. We blog about iPhone apps and aggregators where most of the world is reading about how digital cable in the US is going to impact folks who still have rabbit ears on their box.

Should You Need to Convert People

Bob: Wellwe'll be safe for nowthank goodness we're in a bowling alleybut if George here doesn't get his dinner, any one of us could be next.- from Pleasantville

Try to remember to talk from the human side of the coin. People don't want to talk about RSS. They want to talk about getting information that matters to them sent to them in a way that makes the most sense. When I talk to small businesses about blogs, I talk about taking their newsletters or email marketing online. Podcasts are radio shows on the Internet.

When talking with people about these technologies, never take that condescending air. As much as we feel excited to be part of this whole social media thing, the people who don't get it have all kinds of skills on board that we may or may not have. I met a master salesman this year who sells products that cost more than double my annual salary. He's reasonably new to social media and the web, but he could teach me more about qualifying, prospecting, nurturing, and closing a sale than I could about blogging.

Believe in how these technologies make the world different, but always seek ways to tie it all back to the current world. There are more and more mainstream media types spending time learning about Twitter. We had Jim Long years ago, and he got it years ago. Now, others are coming. Don't scorn them for coming from the current world. Show them how they can integrate and adapt, if they show curiosity.

Internet Fame is Lame Outside our Sphere

If ever I'm in risk of getting a big head about my status on the web, I need do nothing more than stand up at whichever coffee shop has my money that day and say loudly, Do you know who I am? The answer will be no every time. As cool as I feel for being friends with lots of great authors and bloggers and people who make amazing media, I can't ring up Jay Leno's assistant and get on the Tonight Show (maybe Gary can, but he's special).

And in the office? If you're the sole person who gets it at a company, that's great, but if you're wearing that as a badge of some kind, get over yourself. I'm sure the people who knew more than everyone else at desktop publishing and the people who were the best CD-ROM authors are waiting to hang out with you. You know about tools. That's great, but it's not the magic.

Be the Bridge

Want big points in my book (and in lots of people's books)? Be the person who helps a community of others get it, too. Be Beth Kanter, patron saint of non-profit tech. Be Phil Baumann, RN, blogging about social media and nursing. Be Glenda Watson Hyatt writing the Accessibility 100 to teach people like her (Glenda blogs with ONE thumb, people) how to open the world back up. Be Becky McCray, who knows everything from ranching, to running a liquor store, to safari adventures (check her Flickr), to how to teach small businesses everything they need to know about regular small business, and a bit about this Internet stuff.

Be Jon Swanson, out there helping with Church 2.0. Be Ann Kingman and Michael Kindness sharing their passion for reading and books. Be Chris Webb, sharing how publishers see the world. Be Liz Strauss, who is working hard to show bloggers how to be business people over the coming years (and that relates to this post, doesn't it?).

Share the living HELL out of the humanity and the real world-ness that goes into being a blogger and a technologist and someone from the future. Because what you know WILL change the way people live, and it'll work a whole hell of a lot better if you help people get there, instead of maintaining that strange distance.

Teach. Connect. Bridge. Humanize. Human-size. Make it about the people who carry the fire down from the mountain, not the fire itself.

Fair?

Photo credit, Steve Keys

It happened today. The economic angst whacked our agency upside the head. We now have our first example of a client who's asked to terminate our contract strictly as a precaution driven by economic uncertainty.

It seems Sequoia Capital's Mandatory All-Hands CEO Meeting last week, with its gloomy slide deck, has tech CEOs skittering for cover. But folks who rely solely on the VCs' slideshow to make crucial decisions do their companies a disservice: it seems there was a lot of other valuable conversation happening throughout the Sequoia event.

For example, Georgia Tech's attendee, Lance Weatherby, has a good round-up that includes this gem from Sequoia's own Doug Leone:

• Nail your Sales and Marketing message.
• Pound your competitors shortcomings. They're hurting and they will be quiet. Take the offensive.
• In a downturn, aggressive PR and Communications strategy is key.

You didn't see that in the slide-deck; and you didn't hear any of the bloggers who weren't at the Sequoia event note this all-important point. Leone's advice echoes the quote I recently reprinted from a Spring article in the Harvard Business Review:

It is well documented that brands that increase (marketing) during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times.

I acknowledge some bias here, and I also roundly applaud any company that's focused on profit. If you need to choose between making payroll and getting PR, the former wins, hand's-down.

But cutting marketing dollars (in general) and PR (specifically) out of blind anxiety is both arbitrary and foolish.

Let's count the ways in which Agency PR should be the LAST thing you cut

1. Agency PR is more cost-effective than in-house PR. The VP of Marketing is not going to create and manage databases, craft pitches, write press releases, and, spend hours each day reaching out to 50 reporters (and another 150 bloggers). They'll need a senior PR pro to handle those sundry duties and, with salary and benefits included that senior PR pro will cost about $150,000.

A good PR agency will do all of the above and will spread the work across FIVE people, including a senior strategist who can offer experienced counsel; two or more media bulldogs; and, a dedicated industry researcher for about $150,000.

2. A further virtue of an Agency's distribution of talent? The PR firm is always listening and responding. When a blogger posts about your brand, a speedy response is critical. If you place all your bets on in-house personnel who are often distracted with myriad corp comms duties you could miss an important meme.

3. A PR agency also grants access to the wickedly expensive media databases (Cision, Profnet, etc.). These resources help ensure your company does not miss out on those all-important industry round-ups. (As Leone noted, staying visible is even more important when your industry is shedding weak competitors in a downturn you don't want to be noticeable by your absence.)

4. PR feeds the beast of SEO by ensuring your company's content shows up in both Social Media and Mainstream Media channels. Most PR agencies have been whipped into shape on the SEO front by their Google-hungry clients, offering googly expertise that's always being honed by industry dynamics.

5. PR provides air-cover for the Sales team. The big benefactor when Marketing is cut is the Sales group. But what's the Sales department's #1 gripe? Not enough people know about us! The sales cycle is too long because I need to spend too much time educating prospects about our product and our viability. Paging the PR firm!

Today, the stock market rallied, posting its biggest one-day advance ever. Strong and concerted measures are being taken to loosen the banking industry's credit clamp-down. Let's not panic, folks.

Prudent cost-cutting? Sure, that's a great idea. But freaking out? Cutting the single most beneficial and cost-effective means for keeping your company front-and-center in the marketplace? Cutting-off the conversations you've started in the Social Media sphere?

That's no way to save a company.

I've gotten a ton of comments on my blog and on various other online forums where my articles have either been posted or summarized. Despite this high volume, it pales in comparison to the amount of direct emails that I have gotten. Most of the adverse communications have a variation of the same argument: but other people make more money than I do! Why are you after me?

For a whole bunch of lawyers mad at me, you sure provide a crummy response. Objection, your honor on grounds of relevance.

I've never understood why lawyers think they deserve to make the same as other lawyers at other firms or lawyers who practice in different areas of law. Legal services are not commodities. Rather, different specialties are valued more and less by society, just as they are in other fields like medicine and investment banking. In fact, even in the legal profession there are outliers, whether they are public defenders, or class-action plaintiff's lawyers; each of them are on the ends of the respective legal compensation bell curve.

For this reason, I've always thought it was silly that folks who want to provide a particular set of services think they should get paid the same as other radically different practice fields. But this is the general attitude that you get inside a large law firm.

For instance, does it make sense that a lawyer working for a cash-constrained startup company on transaction documents between the company and its returning venture backers should make the same hourly rate as a litigator who is engaged in bet the company litigation for the same company? No.

And before you say that there are billing differences between types of work in forms of discounts to startups and billing premiums with M&A and IPOs, I would still posit two points: one, that these billing differences aren't that meaningful and two, that the partners in these different practice areas judge their compensation across all practice groups and have expectations of equality.

It would seem to me that choosing a practice area could include not only the type of work, but also the amount of compensation that the practice would generate. I would have been very happy to give up some compensation in exchange for avoiding litigation and public company work.

The following is a direct quote from a well-known partner at a well-known Silicon Valley Law firm in an email that he sent to me (name redacted as his request). You can't run a large firm practice these days on $50K a deal unless you are just cranking them out. The expectations for partners at most major firms are simply too great to permit them to handle VC deals.

To summarize, my point is that by only looking at cash as what a lawyer's compensation is, rates are artificially high in some practice areas and those are the fees that are impacting startup companies. Lawyers receive other compensation in performing the types of services they want to and hours associated with those services.

One thing to discuss quickly is startup company equity held by the law firm (including directed shares). In the old days the shares were allocated to the team members performing the services. Other partners, however, got jealous and now most firms allocate equity across the entire attorney pool, whether directly or through a firm-run investment vehicle.

I have an idea. Why not allocate these equity pools only to lawyers who work on startups? They may charge less, perhaps make less, but like the startup, world would see nice returns when things go well.

All of this, of course is part of the competition for law firms to make as much money as the next firm. I'm always surprised when I find some lawyer at a competent, but not extraordinary law firm charge the same rates as a lawyer at a clearly superior firm.

I've heard the argument for years now that partner compensation isn't just about what the lawyers take home pay is, but metrics like Profits Per Partner (PPP) affect attorney retention and hiring. I've never really understood if that is true, or is just ego. While in the Silicon Valley, I found this argument more compelling, but out here in Boulder, I see law students taking less salary for better quality of life. My bet is that even in the Silicon Valley, many lawyers would trade some compensation for better quality of life and therefore the PPP statistic isn't as important as the law firms and magazines hold it out to me. Then again, perhaps this is akin to the U.S. World and News Report law school surveys that have caused a whole bunch of weird behavior on the educational side.

In that Newsweek piece (noted below), which details Rick Davis's continuing financial ties to mega-lobby firm Davis Manafort, Mike Isikoff reveals that in addition to paying Davis's salary directly to Davis Manafort, the McCain campaign has paid almost a million dollars to 3eDC, a web development company, part owned by Davis.

That's a decent chunk of change for web development. So TPM Reader UB looked up 3eDC's website. And as you can see, for a firm in the business of billing $1 million for high-end design work, their own website appears to be one of those off-the-rack professional firm template sites you can by for $19.99.

I'm not saying it's Jukt Micronics exactly. But 3eDC's existence as an actual company seems rather thin.

Now, digging around a little, I notice that 3eDC is pretty closely tied to Davis Manafort. Not only, as Newsweek notes, does the company share an address with Davis Manafort. Last year, US News got Davis to admit that the company has two owners -- Rick Davis and Paul Manafort.

And there's a bit more. According to a July 2007 article in the Wall Street Journal, 3eDC was a "start-up ... with one customer -- the [McCain] campaign." The Journal further reported that within the campaign it was understood that 3eDC was essentially a pass-through, that it had a series of other 'partner firms' that did the actual work.

Perhaps not surprisingly, in June, the Post's Matthew Mosk reported that shortly after McCain took over the Republican National Committee in his role as de facto nominee, 3eDC resurfaced with its second client to date -- the Republican National Committee -- with a contract potentially worth as much as $3 million.

So to cycle back, how we got into all this was trying to figure out whether Rick Davis had really cut his ties with Davis Manafort. The question most people have been asking is whether Davis was still drawing a salary. What it seems like now, however, is that Davis has born poring tons of McCain campaign money back into Davis Manafort -- either by having his campaign salary paid to the firm or by having huge consulting accounts set up for paper companies owned by Davis and Manafort. In either case, the question seems no longer to be whether Davis still draws a salary from Davis Manafort but whether McCain-Palin 2008 and Davis Manafort are even distinct organizations.