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Matt Blumberg – the CEO of Return Path – wrote a post on a meeting he hosted yesterday with some of the old-timers at Return Path – including one of the founders who is no longer at Return Path – to explore reinventing Return Path’s original business (ECOA – email change of address.)
Return Path – which was founded in 1999 (I invested in Veripost – the “other” early ECOA provider – in 2000 which was merged with Return Path in 2001) was originally based on being “the” ECOA provider. At the time, we convinced ourselves that this could be a very big business. We were wrong. ECOA is a small business that can be run profitably, but it’s not enough to build a VC-backed company. Fortunately, Matt and team determined this early on (in 2002) and started aggressively expanding Return Path’s footprint in the email services market – both through organic growth and acquisition. Today Return Path is a medium sized company (e.g. big enough to matter and be considered a real company), growing quickly, and a leader in several market segments (oh – including ECOA).
Matt and his team have demonstrated superb startup skills by recognizing the limitation of their business plan early, adjusting it to incorporate a steeper growth vector, taking action, and succeeding. Not everything they’ve tried has worked, but they’ve steadily built on each new thing they’ve done. As a result, they’ve now shifted into a mode where they are growing a substantial operating business and – as part of that – continually reevaluating (and reinventing) their existing products based on both the changing dynamics of the market and the things that have succeeded or failed in the past.
Good lessons for any entrepreneur or management team.