Start-up – Don Mathis

Maybe there is no “Series A Crunch”. But it still ain’t easy.

For the last few years, the venture capital and start-up community have exhaustively explored the idea that there is a “Series A crunch”. Opinions differ – sometimes sharply – on the topic.

As Inc. magazine described it:

It goes like this: After slogging through six months to a year of frenzied product development and user testing, seed-funded tech start-ups are fatally hitting a wall — the million to several million dollars in VC funding they need to scale up their cool new services is nowhere to be found. The result is the cruel and needless throttling of a vast stream of promising fledgling companies down to a mere trickle of survivors. Share of seed-funded companies that won’t be able to get follow-on funding: 61%.

Don Mathis Kinetic Social_Series A Shadow of Death — Yea, though I walk through the valley of the shadow of start-up death…

In mid-2014, William Hsu of Mucker Capital wrote in re/code: “the distance between that “eureka” moment when an entrepreneur has an idea, to getting funded by a seed-stageinstitutional VC, has become the valley of death — littered with companies that just simply could not get off the ground with little fanfare, attention, or data.”

With 2014 being a massive year for tech M&A, some of the Series A crunch concerns have been alleviated by the availability of early stage “acqui-hire” exits; as Jacob Mullins notes in Business Insider, “Google, Facebook, and Twitter cut the path for the acqui-hire and eased the Series A crunch.”

So maybe there is no crunch, or if there is, it isn’t the horrific “valley of death” that some believe. But crunch or no, from my experience it is certainly difficult.

My company, Kinetic Social, raised its Series A in May, 2013 – a combination of equity and venture debt. We raised our Series B in early 2014, all equity and substantially larger ($18 million versus $8 million). And yet, while both were challenging, the Series A was definitely the harder raise.

Why? In our case, there were at least three significant challenges to surmount:

We were out raising money from entirely new investors, pitching our company to venture investors who had barely heard of us.
We were operating in a sector (paid social advertising) that was largely unproven at that time.
We operated in a crowded industry segment with literally dozens of companies (50+ in our space) that had some form of seed or early stage capital… and some that were further along than that. As AdExchanger’s Zach Rogers puts it: “To many, it seems the landscape of social ad buying platforms has been rapidly commoditized … But Kinetic is betting that it’s early innings for social marketing, and that the winners will bring special-sauce optimization to multiple APIs.”

We were indeed betting on the “early innings” concept Zach suggested. Moreover, we were convinced: 1) what we had already built at Kinetic would command an investment from a smart venture capital firm; and 2) Kinetic would stand out from the pack with a clearly differentiated product and solution. In effect, we were going to market to ask (new) investors to pick us as the likely winners in our crowded space.

Fortunately, it worked. But it wasn’t easy. We contacted about 60 firms, pitched to 30 or so, and ended up with three term sheets – all in roughly one year’s time. Our conviction got us through the process – we believed we were on to something substantial. The combination of a talented team and a strong market opportunity propelled us to realize our vision.

It also helped – a lot – that the market for our services began to shift in our direction. In particular, social media advertising began to evolve from being a primarily earned (free) media model to a primarily paid advertising model. And while we weren’t surprised, we spent a long time in 2012 and early 2013 hoping the pace of this change would accelerate. We began to see it in early 2013 – it’s no coincidence that we closed the Series A shortly thereafter.

Bottom line? The Series A is hard, but raising it simply means you must prove that you have something real. Once you do this, once you prove that there is a bona fide market opportunity for your idea, there is smart capital out there to back your enterprise.

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Don Mathis is the CEO and Co-Founder of Kinetic Social, a social data and technology company focused on making sense of the world’s social signal. He also serves in the US Navy on reserve duty, where he is an Expeditionary Combat Logistics & Anti-Terrorism Officer.

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Not chest-thumping, strutting egotism…

SECDEF Robert Gates & Don Mathis, CEO of Kinetic Social and Navy Officer

By Don Mathis, Kinetic Social CEO

Self-confident leadership: “Not the chest-thumping, strutting egotism we see and read about all the time. Rather, the quiet self-assurance that allows a leader to give others both real responsibility and real credit for success.” So said Robert M. Gates at the U.S. Naval Academy on Friday, May 27, 2011, not long before he left office as America’s 22^nd Secretary of Defense (SECDEF).

This sentiment speaks to what really matters for effectively running an organization: confident leadership that puts the team first and empowers them to accomplish the mission. It is also a telling comment on the character of one of the nation’s very best SECDEFs.

Robert Gates’ style of managing organizations has lessons for anyone in a leadership position or aspiring to hold one. While Secretary Gates was in the news earlier this year due to some of criticism of his memoirs, Duty: Memoirs of a Secretary at War, that isn’t what this post is about. The criticism focused on the perceived tell-all nature of a book that was critical of much of official Washington. But this shouldn’t obscure his brilliant career culminating as Secretary of Defense – the first to serve under two presidents of opposing parties. Whether you like his book or not, there is no disputing that his tenure as Secretary of Defense was historic, and that he has been a deeply committed public servant.

And let’s face it, much of the book was spot-on in its observations.

What I do what to focus on is the extraordinary leadership Gates has demonstrated. His style – especially, his empowerment of his teams – has resonance not just for public service, but for leadership of any sort of organization. For me, that includes my civilian work as the CEO of Kinetic Social, a start-up in the social media and technology world. It has also been influential for me as a leader in uniform, during my service as a Naval Officer (both on active duty and in the reserve).

In that same speech at Annapolis, Gates said:

“(Leadership includes) the ability to stand in the shadow and let others receive attention and accolades. A leader is able to make decisions but then delegate and trust others to make things happen. This doesn’t mean turning your back after making a decision and hoping for the best. It does mean trusting in people at the same time you hold them accountable. The bottom line: a self-confident leader doesn’t cast such a large shadow that no one else can grow.”

Secretary of Defense Robert M. Gates presents the Purple Heart to Marine Gunnery Sgt. David Rohde at Balboa Naval Hospital in San Diego. DoD photo by Cherie Cullen.

I met a senior Pentagon officer who worked for Secretary Gates for part of his tenure, and he spoke about this quality of having a constructive relationship with a boss who empowered and trusted his subordinates. And he emphasized that this was perfectly consistent with discipline and accountability. “Gates understood that you don’t need to be dick to be an effective and decisive leader,” he said. “This is what so many managers – especially the toxic sort – get wrong.”

Gates’ style, alas, is the exception rather than the rule.

Serving under Secretary Gates as an officer in the Navy, I watched his leadership style closely. While I did not serve in the Pentagon or directly for him, I became a Commanding Officer during his tenure. And I learned a great deal from his tone of management, from the way he motivated by empowering, and from the way he genuinely cared for his subordinates – especially the troops in the field.

I came to summarize and distill Robert Gates’ core approach into a four point guide for running my Navy unit, a guide that I have also used in my civilian career at Kinetic:

Set a vision: one that inspires and stretches the team towards an important achievement, a disruptive innovation, a major strategic objective;
Hire / retain / train a great team that can operate together. Not just a group of “A players” (who often struggle with operating together as a team). A group of strong players where you learn their strengths and weaknesses, and you help them focus and contribute the former in a collaborative setting while controlling for the latter;
Empower that team: get out of their way and let them execute (i.e., don’t micromanage);
Hold them accountable: for the results you expect, around the vision you set. A good subordinate manager will welcome the accountability; it will help them reach their potential and grow as leaders in their own right.

Few will have the honor of serving their country in the same way that Secretary Robert Gates did. But we all can learn from his leadership example, and implement the lessons learned of how he successfully ran the Department of Defense in a period of enormous and tumultuous challenge for the country.

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The Vision Thing … from our company blog

I recently wrote a piece for Kinetic Social’s company blog, “Kinetic Conversations.” I thought it was worth highlighting here, especially after having just returned from a conference at the Harvard Business School Rock Center for Entrepreneurship (the “Rock 100” conference). Two intense days at the Rock conference, where we focused on issues of starting and growing companies, certainly underscored this key take away for me:

The Mission Matters. In any setting – military, non-profit, business or otherwise – a group of people forming as a team needs a guiding principle around which they can organize. As Robert S. Kaplan, a professor at Harvard Business School, puts it: “you need a reason to get out of bed and go to work each day.” Something substantial, something that guides you, something you can believe in. Incidentally, making money is a side-effect of building something meaningful in business, but it cannot be the mission … and in those cases where it is, it often doesn’t last long.

At Kinetic Social, we completed our Series A fundraising in May, and we took the summer to take both a deep breath and a step back from our run-like-hell sprint out of the starting gates. Now, we are wrapping up a process of clarifying and codifying our mission. Really, it is more of a vision than a mission (the differences between the two are a subject for another time, but for our purposes here, I will treat them as the same). We are focused at Kinetic on making sense of the world’s social signal. The vision we are developing is larger than that, but that is the essence.

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You can read the full piece here. Oh and, by the way, we’ve had the good fortune to raise a Series B subsequent to writing this piece!

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“It’s the Advice, Stupid”

By Don Mathis, Kinetic Social CEO

Earlier this week, we began to hear more details regarding the changes Facebook has made to the Preferred Marketing Developer (PMD) program, in particular as these changes will relate to both the initial application to the PMD program as well as to the recertification process for existing badge holders. Keep reading…

This post has been moved to my industry-focused blog, “Silicon Alley Considered: Observations from the grittier tech space.” You can click on the link to keep reading.

Pucker Factor Over the North Atlantic, continued.

Don Mathis Kinetic Social_P-3 Flight Deck Preflight VP — Preflighting the Flight Deck, P-3 Orion

By Don Mathis, Kinetic Social CEO

Last week, I began a post on how the OODA loop – Observe, Orient, Decide, Act! – played out in an emergency situation faced by my P-3 Orion patrol squadron aircrew. We were over the North Atlantic on a Search & Rescue (SAR) mission, and the irony that we might be the ones needing rescue was not lost on us.

The point at which I broke off the narrative was just as we were pulling out from a dive towards the thundering waves below us. Fighting asymmetric thrust, we had lost an engine at low altitude on the same side of the wing where another engine was already shut down. We were yawing left while in a steeply banked turn, near – or even slightly below – minimum controllable airspeed.

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In the moments after we recovered from our fall dive towards the sea, the pilots got engine #1 going, gained altitude, and secured the malfunctioning #2 engine. We all breathed a serious sigh of relief. I remember looking out the bubble window just aft of the flight deck, watching for the now shut-down engine number #2 propeller to wind down to a stop.

But it never did. The enormous four-bladed Hamilton Standard propeller kept on rotating. The plane shuddered with vibrations. The flight deck could not get the prop to “feather”. Feathering is when the prop blades are halted and angled into the wind to reduce drag after shutting down an engine.

There is an old saying among crusty senior Orion Flight Engineers: There are only two things on a P-3 that will kill you and they both start with P: Pilots and Propellers.

The flight deck crew executed all of the emergency procedures outlined in the manual in their attempt to feather the prop. Nothing worked. The propeller RPMs slowly increased as the plane’s very forward motion through the air caused the prop to speed up in its rotation.

So now, with the prop wind-milling freely, we faced the risk of a propeller overspeed. It is one of the most dangerous situations on a turboprop aircraft:

There is a chance that centrifugal force will wrench the 1,200 pound prop right off the aircraft, which could slice through the fuselage and / or lead to an out-of-control plunge … both catastrophic scenarios.
Equally concerning, an overspeeding propeller decoupled from the engine’s reduction gear box could lead to a fire. Not a good thing when that engine is attached to a wing with thousands of pounds of fuel. Attached to an aircraft with 10 souls on board.

Without getting too technical, we later learned that the reduction gear box – the component that, in rough terms, connects the engine to the propeller – had experienced a catastrophic failure. It “fodded out” other key components of engine #2. “F.O.D.” is an aviation acronym for Foreign Object Damage; when the reduction gear box failed, it sprayed metal parts at high velocity throughout the engine.

VP-6 P-3 Missing #1 Prop. Photo Credit: Approach Magazine, 1987

There have been several accidents – in the Navy we call them “mishaps”, in typical military understatement – under very similar circumstances to the ones we now found ourselves in. In 1987, A P-3 in Hawaii faced a prop overspeed that, after two hours of flight time home, eventually led to the propeller separating from the aircraft. The prop took out the engine next to it and nearly led to the loss of the aircraft as it was on final approach.

Worse, a P-3 out of Adak, Alaska had a very similar situation, ending with disastrous results. In that case, the overspeed condition eventually caused a fire. The crew discharged the engine fire extinguishers; it caused a fire again, they extinguished it again; when the overspeed led to a third fire and their extinguishing agent was exhausted, the crew was forced to ditch the aircraft in the heavy Alaskan seas. Five members of the crew perished including the patrol plane commander. He had stayed atop the aircraft after escaping through the cockpit roof hatch before the plane sank, counting his crew to ensure all got out of the plane. He was swept away by the waves after that.

overspeed prop — Our flight: #2 Prop in Overspeed

In our case, the crew had to carefully walk through the OODA Loop in this crisis. First, where should we go? We were pretty much in the middle of the North Atlantic; St. Johns, Newfoundland was the nearest land. So we headed there, still several hundred miles away and on the other side of the ocean from where we’d started our flight that day. The P-3 that lost the prop off of Hawaii flew for about two hours before its overspeed condition led to near disaster; the aircraft off Alaska, less than that. It would take almost three hours to fly to St. Johns. We all knew the history of these other flights.

Should we plot our course near identified ships, in case we needed to ditch? (We were far, far outside of helicopter rescue range). But if we did this, we’d add minutes or more to the flight, which could have fatal results. We decided to fly straight to St. Johns.

How fast should we fly? A trade-off between precious time versus the risk of the faster slipstream possibly speeding up the runaway prop. We opted for operating the aircraft at as slow a speed as practical while maintaining at least some margin of safety above minimum controllable airspeed (see my prior post about the P-3 that stalled and spun when they got below minimum controllable airspeed). It was a painfully slow speed, prolonging our flight over the crashing seas to a safe haven.

VP-47 P-3 Ditched in Gulf of Oman 1995 — VP-47 P-3 Ditched in Gulf of Oman. Photo Credit: Bert de Jong

Should we prepare for ditching or for bail-out? This was an easier one… no one really thought jumping out of the plane in parachutes over the ranging North Atlantic was a good idea … even if we survived getting out of the plane, the odds of finding us in the seas below were slim-to-none.

Each question led to more questions, each decision led to action after observing the developing situation and orienting to it.

The next several hours were the longest many of us would ever experience. The crew was mostly silent and nervous. I recall sitting at my station, warily watching the very big, violent ocean below, going over and over my emergency ditching and egress procedures in my mind, and dwelling on the low odds of surviving a ditching so far from rescue.

My communications duties included telling everyone I could about our situation and our location after we’d declared an emergency. We communicated with SAR resources, our Navy command, other aircraft, and oceanic air traffic control out of Gander, Newfoundland. Over the Atlantic, there is no radar tracking; you call your position to controllers who monitor your progress. I’ll never forget hearing the concern in the controller’s voice; he was professional, but you could tell he thought he might be the last person to speak with us alive.

During the course of the flight, we regularly experienced jarring and unnatural vibrations originating in the engine, as critical components continued to disintegrate. We briefed emergency procedures for ditching and for fighting an engine fire if it broke out. And we watched that big #2 propeller going round and round, wondering when it would speed up fast enough to cause a disaster.

At one point, an officer suggested we fly another thirty minutes past St. Johns, a civil airfield, because of all the top secret crypto gear on the aircraft. There was a Canadian military base where our equipment and codes would be more secure, he reasoned. If looks could kill, he’d have been dead on the spot.

Eventually, we made it to St. Johns and landed safely on three engines. We’d never been so thrilled to be back on terra firma. In an expression that I heard one of our sensor operators use, we spent that long, long flight “puckered up tight enough that a team of horses couldn’t pull a greased knitting needle out of our arses”. But we made it.

In a future post, I will discuss the OODA implications of all this. Stay tuned!

This post is dedicated to the brave men and women of the Navy Patrol Squadron community past & present, and especially to those who have lost their lives while being ever vigilant in defense of our nation.

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Pucker Factor Over The North Atlantic, OODA, And What I Learned About Business From That.

By Don Mathis, Kinetic Social CEO.

In military aviation, the “OODA Loop” has the status of a biblical commandment: thou shalt Observe, Orient, Decide, and Act. It is a decision framework which has utility across military operations … and in business too.

My first practical application of OODA occurred as a young Flight Communications Officer in a Navy P-3 squadron. We were over the North Atlantic, during a Search and Rescue mission that went (very much) awry. The fact that I’m here to write about it is testament to the skills and training of my crew, imbued with the OODA mandate. Its power as a decision-making framework was indelibly imprinted on me that day.

I’ve written about leadership lessons in the context of crisis management in my post, “Double, double toil and trouble” (parts #1 and part#2) … this is a different spin on lessons learned in a crisis environment while serving with the Navy.

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The scene: we were flying a Search and Rescue (SAR) mission looking for a missing woman. She had been trying to sail the North Atlantic solo. We were part of a multinational search effort, over the middle of the ocean (not far from where the Titanic sank, as one of our crew later pointed out). The weather was “rough as a cob”, with heavy overcast, a broken cloud layer at about 1,000 feet, moderate to severe turbulence and 25-foot swells in the dark seas below.

Our 10 member crew was flying the venerable P-3 Orion, a four-engine turboprop patrol aircraft used for anti-submarine warfare … but which doubled as a pretty good long-range SAR platform. Three were on the flight deck, the rest of us “tuberats” operated from the main compartment of the plane.

Don Mathis, Kinetic Social: P-3 with #1 in loiter shutdown — P-3 With Engine #1 In Loiter Shutdown

Important fact in the story: we had our #1 engine in “loiter shutdown” to conserve fuel and extend our time on station (the plane’s engines are numbered one to four, starting with #1 on the far left side of the aircraft, and ending at #4 on the far right). Shutting down #1 was common on station.

Our hopes of finding anyone alive in that witches-brew of a sea were slim (and as it turned out, the target of our search was never found). We’d been briefed that the woman may have abandoned her sailboat in a red life raft; this would be extremely difficult to find in the rough waves, and so we were flying a tight search pattern low over the water – about 500 feet. All windows were manned, infrared video feed was being monitored, and our radar was operating. I was staring intently out my bubble window; my station was positioned just aft of the flight deck. And I was trying hard not to get air sick from the bumpy ride as I tried to keep a good look-out.

At some point as we lumbered along boring holes through the sky, the aft port window observer called out a red object in the swells below (an adrift ocean buoy, we later found out from the Coast Guard C-130 that replaced us on station). The pilot yanked the aircraft into a steep left bank to circle back to the sighting.

And that’s right when things went bad.

As the pilot applied a steep bank angle to turn us around and inspect the red object we’d seen, the #2 engine “crapped out” in the banking turn. For those keeping count at home, that’s two engines out on the same side of the aircraft.

Now, the (awesome) P-3 Orion can loiter for hours on station with two engines shut down … but most crews avoid shutting down two engines on the same side of the plane. It’ll fly that way, weight, weather, and fuel permitting (it can even fly on just one engine under the proper circumstances). But this needs to be managed carefully, and in our case, just about everything that you’d prefer not to be the case with two engines out on the same side was indeed the case: we were heavy with fuel, we were at a relatively low airspeed, we were under 500 feet of altitude, and we were at a steep angle of bank.

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When I was still in my initial training, I was once sitting in our medical clinic at the Naval Air Station, getting my annual flight physical. One of my instructors happened to be there, and as we were waiting for our EKGs, we got into a discussion of when problems occurred in flight. There were probably thirty people waiting in chairs lined up in the passageway. My instructor had me stand up and face the doors down at the end of the passage, where outside, it was a nice day. He said, “See the sunlight out there? That’s not when the shit hits the fan.”

He then stood behind me, made me close my eyes, and started violently shaking me and shouting questions about what circuit breakers to pull, what procedures to implement in the event of an emergency. He was shouting like a drill instructor. The thing he shouted the most as he concluded his lesson? “OODA!! OODA!! OODA will save your life!”

This created quite a spectacle for the other people quietly waiting for their physical exams.

What is OODA? OODA was originated as a concept for fighter pilots in the Korean War, by Colonel John Boyd. He observed that decision-making occurs in a recurring cycle of observe-orient-decide-act. By processing this cycle more rapidly than an adversary, one can “get inside” the opponent’s decision cycle and gain the advantage.

As I was taught during my training, the “adversary” we often faced in the patrol squadron community was accident chains – i.e., the series of events that build on themselves leading to an accident. In this sense, OODA isn’t useful only as a strategic framework (though it is definitely that… more on OODA later). It has strong utility in an emergent crisis, even if the cycle is compressed to mere moments in time. We were taught that training was the key to ensure that the cycle could be effectively compressed. But our training scenarios almost always required a process based on OODA.

My instructor shouting “OODA!!” at me was one of my most memorable lessons from my training. And I was definitely thinking about it that day on our SAR mission.

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Back over the North Atlantic: when we lost the #2 engine on the port wing in the midst of our left turn, the aircraft made a sickening lurch towards the sea. The cockpit crew had to do a number of things immediately: most importantly, they had to fly the plane, ensuring that we didn’t fall below the power curve or fall below the minimum controllable airspeed given our loss of engine thrust. Our biggest risk in the moment was a stall – essentially, the aircraft falling out of the sky.

In our case, in addition to leveling the wings, the flight deck pushed the nose towards the crashing sea swells – the fastest way to keep our speed from bleeding off and avoiding a stall scenario. Incidentally, dropping the nose of a plane towards the earth’s surface is a very unnatural thing to do. There is a human reaction to pull back on the yoke or stick in an emergency, especially when close to the ground. Pilots are trained against this, but the phenomenon has caused more than a few fatal accidents.

The flight deck crew also had to manage power on the two good engines as well as make the correct flight control inputs to manage the asymmetric thrust (engines operating on one side of the aircraft but not on the other). They also had to restart #1 while more or less simultaneously securing #2.

And this all had to be done in mere seconds … the sea is awfully close and the room for recovery is very narrow at 500 feet.

It was a lot to manage, but they did it. There are a few examples of P-3 crews that have not fared as well. In one case, a P-3 had their #1 engine shut down during a training flight when their #2 engine began vibrating intensely and had to be “bagged” immediately. Unfortunately, with two engines off on the same side and with the airspeed too low, the aircraft stalled … at least 5 G’s were reported in the subsequent effort to recover, yielding substantial damage to the aircraft. The plane did five spin rotations from 5,500 feet, before recovering at an altitude of less than 200 feet.

Recovering our aircraft after the failure of engine #2 was the first OODA Loop that day, but certainly not the only one. It was a tightly compressed OODA Loop, with the entire decision-to-action process occurring in seconds. The quick reactions and deep experience of the flight crew saved the plane as we bottomed out maybe 150 feet above the swells.

But that was just the beginning of our problems…

To be continued

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Don Mathis is the CEO and Co-Founder of Kinetic Social, a company launched in 2011 with a core focus of marrying “Big Data” to social media on behalf of large brand advertisers. He also serves in the active reserve of the US Navy, where he is the Commanding Officer of a highly deployable, selectively staffed, joint-service combat logistics unit that supports forward deployed war-fighters.

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Double, double toil and trouble, part 2

By Don Mathis, Kinetic Social CEO

Continued from my last week’s post, Double, double toil and trouble Part #1

My last post described a crisis situation my command faced in Bahrain. It was 2002, and we had been warned that tens of thousands of angry demonstrators were heading our way, with the objective apparently of overrunning us.

The subject of the post was about how the Navy has taught me, among other things, to manage through a crisis. As I wrote last week, “it’s a skill that has come in handy in my civilian career. From swiftly changing market conditions to frivolous lawsuits, from irrational competitors to even less rational bloggers whose journalistic integrity would make Rita Skeeter blush … operating in an entrepreneurial environment sometimes feels like brief moments of sanity in an otherwise ultra-manic universe.”

But back to that day in 2002… in my last post I broke off just as, at the time, I was beginning to think we were in a true no-win scenario, that we might not actually get out of it unscathed. Or as we say in the service, we were on the verge of being in “a world of hurt.”

Watching how people reacted to all this was very interesting (I mean, in retrospect). Some folks fared badly. I remember one officer – not from my command (nor my branch of service I’ll add), and I won’t describe him further lest he someday read this – who was on the verge of real panic. He was planning to “commandeer” a vehicle and make a dash for it. He asked me if I wanted to come, as I caught him rifling through a cabinet for truck keys. And I’ll admit, it was tempting – staying where we were was beginning to feel like a death sentence. But I declined. Whatever the outcome, I understood that it was my duty to be there. It may have sucked, but I had volunteered for serving in the first place … abandoning that commitment wasn’t an option.

It was pretty much precisely at this moment that my Commanding Officer (CO) arrived on the scene. He didn’t need to come; he had left the safety of the main base to get there, and with the evacuation order in place and the Marines already deployed, he could very much have justified staying where he was. But he didn’t. Moreover, he would not have stayed away in a million years – we were “his people”, and he would have moved heaven and earth to be there and share the consequences with us.

This represents a phenomenon that I find is rarely understood by the “outside world” (i.e., those who haven’t served). When you have the privilege and responsibility to be a leader in the military, you learn quickly that it is all about your team, about your people. As a (different) Commanding Officer I once had used to say frequently, “take care of your people, and they will take care of you.” The bond you develop with your team, the sense of commitment to their safety and well being, goes far, far beyond what occurs in nearly any civilian counterpart scenario.

Back to my CO in Bahrain: not only did he come to join us at that moment, but he projected a vision of calm despite the overwhelming tension and impending violence. I’ll never forget the easy command he seemed to have of the situation … how he got the specwar commander to stand down his defensive perimeter and put away his heavy weapons, and yield the force protection mandate to the Fleet Anti-terrorism Security Team Marines with their non-lethal gear. How he got everyone aligned to complete the lock-down with order and discipline. How he ensured that we had at least a fighting chance to egress the area once our work was done and the violence had commenced.

It is a fair statement that without his leadership, people would have still been running about like headless chickens as the demonstrators crashed the gates. But this was a group that knew how to function as a team, and the CO had spent many months getting them to operate as such. He brought the team back to that level in a matter of moments. His transformation of the scene was almost breathtaking.

Long after, I asked him about that time. He admitted to me that he was as frightened as the rest of us. “But Junior,” he said to me, using the nickname that he had begun calling me on my first day reporting to him, “always, always keep your game face on.”

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So what lessons can be drawn from this experience, lessons that transcend service in a war zone? A few, I think:

First and foremost and always: the team matters, and it matters above all. The CO saved the day in Bahrain, but only because he had a good team in place already with mutual respect shared between leader and led. Note to the business leader: if you ever think that the story is more about you than your people, you are in real trouble
Second: keep your game face on. Not because you are trying to present a false sense of security in the face of adversity, but because situations are influenced by people as often as the other way around. Psychology is a part of every issue. Embody confidence because you find the reasons to be confident, and give that confidence to your team. If the guy or gal in charge loses their cool, you can bet that the team will too.
Finally: act. Action solves problems, and “analysis-paralysis” rarely adds value beyond a certain point. Too many business leaders get shell-shocked when facing a crisis. Personally, when things seem challenging I find it helpful to remember that history is filled with people who have faced situations far harder than my own. Determine a solution and execute … even if it doesn’t work, at least you are engaged, and perhaps you’ve generated new options as a result. The CO that day immediately commenced giving direction to his command, and that eliminated much of the hand-wringing and doubt around the viability of our situation.

My Grandfather, who was a Captain in the Merchant Marine, used to say “God damn it, do something.” Be proactive, make a decision and – as we were only half-jokingly taught in Officer’s Candidate School – if that decision happens to be right, so much the better. A bias to action will overcome many obstacles in and of itself.

How one manages when times are good is no indicator of competence… it is when the challenges are extreme that we see who we really are. I got to see that in Bahrain. I’ve seen it at other times during my military service. And I’ve seen it in my civilian work (albeit with less dramatic consequences).

In a future post, I’ll talk about a time when I put that learning to a pretty serious test in my civilian job.

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Oh, by the way, as to the situation that day in Bahrain? It culminated in anti-climax (for the US military, at least) … but this message about crisis management wouldn’t have resonated as well if I told you that upfront, would it have?

In fact, what makes it possible to focus on general learnings from a tale like this, for me anyway, is precisely because it ended benignly. Most of us in the military have had experiences post-9/11 that were also, perhaps, great “lessons learned” events, but that are far too painful to openly discuss. Or to debase by translating them into a business lesson.

The demonstration that day occurred at the Pearl Roundabout, and the protestors did try to march to the military air terminal. But the demonstration was smaller than the intel folks had forecast, and the marchers never got to us. The Bahrain anti-terrorism police stopped the protesters on the way, in much the same way they have stopped protesters in the last few years of the Arab Spring: with bone-breaking tactics.

And while this is not a political post or blog, it merits noting: these strong-armed tactics may have worked to stop the protests in their tracks. But the sense of hopelessness that drove them in the first place remains as palpable as ever across the Middle East. It is hard to see how there is a happy ending under such circumstances.

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The Smell of Social Desperation

By Don Mathis, Kinetic Social CEO

There is a smell of desperation afoot in social ad:tech. The bloom is off the rose, and ad:tech social marketing is undergoing a period of tumultuous change. The headlines are focused on sell-before-death M&A, shuck and jive (aka “pivoting”) stories, and lay-offs. Keep reading…

This post has been moved to my industry-focused blog, “Silicon Alley Considered: Observations from the grittier tech space.” You can click on the link to keep reading.

Double, double toil and trouble

By Don Mathis, Kinetic Social CEO

Learning about crisis management in the Global War on Terror

I last posted about why my Naval service has meaning for me. How I get the opportunity to serve with folks from all walks of life, unified in a common endeavor: doing something for the sake of others, doing something that isn’t just about the predominant “me”-obsessed cultural zeitgeist.

It’s grounding, especially in my civilian world of ad-tech entrepreneurship, where the bullshit can be so thick you need a full MOPP suit to keep from choking on it.

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But the Navy’s also been one of my most important classrooms. I’ve learned more about management and leadership in the service than I did at B-school or McKinsey, and I draw deeply on these lessons at Kinetic Social.

One of my biggest learnings? How to manage through a crisis. It’s a skill that has come in handy in my civilian career. From swiftly changing market conditions to frivolous lawsuits, from irrational competitors to even less rational bloggers whose journalistic integrity would make Rita Skeeter blush … operating in an entrepreneurial environment sometimes feels like brief moments of sanity in an otherwise ultra-manic universe.

The trick is to “keep your head when all about you are losing theirs’”, to paraphrase Kipling, and drive your vision through the gauntlet of crises achieving success despite them. Or perhaps because of them: “Sometimes a crisis is a good thing for a company. Recovering from a knockout punch often requires heroic efforts from the team,” wrote Fred Wilson in his blog post How Well Do You Take A Punch? How you cope, how well you turn adversity into opportunity determines your eventual success.

This post is about a “trial-by-fire” dose of instruction in the art of crisis management while serving with the Navy.

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In 2002, I was deployed to Bahrain early in my first overseas “Long War” tour. This was a time when Afghanistan was still a pretty safe place to be in an unarmored Humvee, a time when no one really believed – I mean, none of us on active duty in the Middle East – that we’d actually invade Iraq. The war then was against Al Qaeda, and we were making progress. These were the salad days of the War on Terror.

On a particular early Spring day when the weather was amazing and the god-awful summer heat hadn’t yet started roasting the Persian Gulf, I was on duty at the military air terminal in Bahrain, a major logistics hub for Central Command. I had just enjoyed a stroll back to our side of the airfield from the little gedunk shack that served a terrific shawarma, when my Senior Chief came sprinting towards me across the aircraft ramp. “Sir! We’ve got a real Charlie Foxtrot!” he shouted. Charlie Foxtrot: mil-speak for Cluster F#ck.

The early signs of unrest in Bahrain occurred long before the Arab Spring started in Tunisia or Tahrir Square. Bahrain’s Shiite majority – about 70% of the population – has long felt oppressed by Sunni minority rule. And when I say long, I mean centuries-long. Bahrain was conquered by the Sunni al-Khalifa family in 1783, and they have ruled the country ever since. And in 2002, King Hamad bin Isa Al Khalifa – who had earlier pledged to implement a genuine constitutional monarchy – was actively backing away from real reform and retrenching. The Shia felt betrayed and feared greater Sunni oppression, and sporadic protests broke out … a precursor to the troubles in Bahrain today.

Bahrain is home of the U.S. 5^th Fleet, and that’s why I was there, in the midst of a crisis that began to unfold around me on that otherwise pleasant Spring day. Then, as later, Bahraini opposition demonstrations often began at a place called the Pearl Roundabout (it is now destroyed). There had already been a series of protests over the past few weeks, nominally in solidarity with Palestinians against Israel. But the subtext of Shia-versus-Sunni and an anti-American flavor was strong.

On April 5^th, just a few days before, 20,000 protesters lobbed Molotov cocktails at the U.S. Embassy compound and breached its walls, with Bahraini anti-riot police stopping the demonstrators by using clubs, rubber-coated bullets and tear gas. A McDonalds that I’d been to was attacked as a symbol of America. Rumor had it that Shia doctors had set fire to their hospital in protest. A U.S. sailor was badly injured by an improvised explosive device attached to his car. It was a tense time.

The Pearl Roundabout was less than three miles from where I was at the military air terminal. On this particular day, the protest that formed there had the earmarks of a major civil disruption, a pre-planned event that could signal the beginning of serious sectarian violence – or so our intel people thought. They warned of 50,000 to 75,000 people, agitators embedded in the crowd with weapons, organization provided by Iranian-linked terrorists. It wasn’t clear that the Bahraini authorities could control or stop it.

And this crowd was supposedly marching our way to overrun and destroy the military airfield. All the makings of a lovely day.

The protocol for such events was simple, at least in theory: bring in the Marine Fleet Antiterrorism Security Team; evacuate most personnel out of harm’s way, shred classified materials that cannot be removed; fly out all aircraft that could fly, tow any which couldn’t to the civilian-side of the massive airfield to buy time and allow the demonstration to dissipate. It should have been fairly straightforward.

But “the enemy gets a vote,” and in this case, one of our enemies was Murphy. As in, Murphy’s Law.

Just as we were thinking that we had a good handle on the situation, a C-5A Galaxy that was randomly and coincidentally transiting the theater at 35,000 feet declared an emergency and came screaming into Bahrain with a smoking engine. All of a sudden, we had a plane that couldn’t get out and that we lacked the equipment or time to tow away from the military air terminal.

A plane that was an awfully big, juicy symbol of America’s presence in the Middle East.

That would have been bad enough. But it got more interesting than that. On that C-5A was a contingent of special operations forces and their equipment. The Major in charge informed me that he wasn’t leaving the aircraft with its top-secret gear, and he’d defend it if necessary. When I told him that the senior officer present at 5^th Fleet HQ had ordered him and his troops to leave the airfield and find safe haven, he refused and told me his orders “came from an authority higher than mine”. And then the Major began deploying his troops in a defensive perimeter around the aircraft.

SpecWar Operators — Special Warfare Operators

SO… now we had an angry crowd of demonstrators gathering a few kilometers away, preparing to march on our position and supposedly lay waste to it. We had Marines with non-lethal gear ready to hold them off … but we also had specwar operators armed to the teeth – with quite lethal gear, as you would imagine – surrounding an airplane as big as a building ready to defend it at all costs (what the hell was on that plane anyway?).

This all developed incredibly rapidly, and there was a growing, palpable sense that things were getting out of hand. It wasn’t even clear who the proper command authorities were with the specwar guys added to the mix, and we now had a seemingly impossible mandate to secure the facilities in the face of an uncontrollable mob hell-bent on destruction.

It was starting to feel like I was in one of those military Operational Readiness Assessment exercises where they keep throwing increasingly difficult complications at you. Eventually, such exercises end up putting you in a preposterous situation, the Defense Department’s equivalent of the Star Trek Starfleet “Kobayashi Maru” no-win scenario … except that this was no exercise. We were most certainly on the verge of being “in the shit”.

To Be Continued in my next post…

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Why I Serve

January 28, 2013

Don Mathis, CEO of Kinetic Social and Navy Officer — Don Mathis, CEO of Kinetic Social & Navy Officer. With Petty Officer at Evening Colors aboard USS John F. Kennedy in NYC.

Like most reservists I know, I lead a busy life. Kids and a working spouse, the constant juggle of obligations, the feeling that at some level you don’t have enough time, ever, to do all that needs to be done.

On the civilian-side, I have the fortune of being the CEO of a growing social media-related technology company. It is a stimulating and challenging environment, and I work with a truly outstanding team. It isn’t easy to find the caliber of commitment or intensity in the civilian world that is common in the service, but I believe that at my company, Kinetic Social, I have.

But the work is challenging. We are a small young company, not yet profitable and constantly scrambling to fund-raise. Issues must be resolved decisively and immediately; we don’t have the luxury of excess capital to offset poor decisions or to allow for long deliberations. All this can translate into long days and painful travel schedules. In the last week for example, I was in three cities across the country in two days, flew home from the West Coast to NY on the red-eye, and worked all day on a Saturday until 4am the following Sunday morning.

Come to think of it, it feels almost like a mobilization and deployment “downrange”: intense and hectic operations tempo, seemingly impossible objectives, and too few resources to meet them.

Except that it isn’t. In fact, when you take a step back, it isn’t even close. The stakes don’t begin to compare to what our military personnel face when deployed into a combat zone. Moreover, for the reservist in particular, the frequency of mobilizations and the ensuing life disruptions are an enormous burden. George Washington reportedly said “when we assumed the Soldier, we did not lay aside the Citizen,” and this is a motivating quote for the citizen-military model of our reserve and National Guard forces. But, I’m pretty sure the first President didn’t envision a world of multiple theater tours in the Long War.

So why do it? Why commit such time – which as every reservist knows is a lot more than one weekend a month, two weeks a summer – when we face so many other demands in our lives? When the responsibilities and the consequences of reserve service can be so extreme?

I have reflected on this question a lot. Probably every reservist has. When I am on my way to a drill weekend away from home and missing my daughter’s soccer game, I certainly do. And what reservist post-9/11 hasn’t had that experience of sitting in their quarters at their mobilization processing station, staring at the mil-spec cinder block walls, dreading the flight out the next morning for some godforsaken place where he or she will be “Boots On Ground” for 365 days?

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As a reservist, you stand always at the ready … for whatever you must do, for whatever your country asks. When it asks – and since 9/11, it has asked often – you respond.

When a reservist is mobilized, it is always because something bad has happened. We know that we will likely be in harms’ way. The average person runs in the other direction from danger. But not us. We engage, we protect, we fight if we must. We get tasked with herculean objectives in insane environments. We feel our absence on the home front almost every waking moment. It is never convenient when we deploy; it creates hardships at work, it can of course be dangerous, and our families carry the brunt of our absence. I’ll never forget my little boy’s or my wife’s tears when I left them in front of our apartment building, on my way to the airport for my first deployment to the Middle East. It is an experience that many of us have had too often over the last decade.

Deployments are stressful in a way that few civilian experiences can be, unless one works in a hazardous or first response-type occupation. In business, it may feel stressful – in the moment anyway – to work under a crazy deadline to get a proposal in front of a client. But that doesn’t cause PTSD. It doesn’t compare to what you feel when you hear the zip of an AK-47 round – a very distinct sound, and those who have heard it know what I mean – and know that the person who pulled the trigger was trying to kill you. It doesn’t compare to what you feel when you are in a convoy in hostile territory wondering if that curious mound of dirt up ahead will detonate under your vehicle, or if some poor dumb Taliban S.O.B. will have his lucky day and land an RPG into your helicopter as you approach the landing zone.

Perhaps most of all: no civilian stress compares to the fear that your actions or decisions may result in one of your team getting hurt. If I make a mistake at my civilian job, the worst case scenario is someone faces the unemployment line. If I make a mistake when deployed, someone may be getting shipped home in a box.

Such stresses aren’t just limited to war zones, and the reservist or Guardsman may be called to provide “aid to civil authorities” in times of need, for example Hurricane Sandy and Katrina relief. In my own experience, while I’ve spent most of my active duty time since 2001 forward deployed, some of my most powerful and moving service has been in providing aid right here at home: I was at Ground Zero the day after 9/11, working first with a provisional joint task force on a search and recovery team, and then spending several months on state-ordered homeland defense duties. My experiences there, especially on “The Pile”, were like none other in my life. Mostly, I don’t think about it: the sights, the sounds, and perhaps above all the smell … these are things best left in a box high up on a mental shelf that I rarely open. It would be an understatement to suggest that it was like your worst nightmare – I know of no one who could conjure a nightmare on a scale of the aftermath of 9/11 in downtown New York, and we all walked away from the experience with some scars that may never fade. But we all heeded that call to respond, and I don’t think a one of us would have wanted it otherwise. The selfless devotion I saw at Ground Zero was awe-inspiring.

Herein lays the answer to the question: I serve to be around people like this. I find such commitment to be motivating, to be humbling. It gives me hope for the country. It keeps me grounded in what really matters when I get sucked into the trials and tribulations of my civilian job.

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It has been often observed that we live in a self-absorbed time. From reality television to the online industry I work in, new media forms seem to enhance our collective obsession with over-sharing the banal, with celebrating the pursuit of material gain and capital accumulation, and with narcissistic preening.

As true as this may be, my experience with a military reserve component has allowed me to meet many who give selflessly and without a second thought. Who voluntarily take risks on behalf of serving others. Who act with little regard for personal risk or consequence. Who are committed to something greater than themselves.

At a time when the predominant cultural ethos seems to be rooted in a snarky cynicism and unapologetic self-aggrandizement, there remain many who commit themselves to helping others and to serving their nation and ask for precious little in return. They are the reason I continue to serve, and I am eternally grateful for the privilege of sharing a little piece of the burden they carry for all of us.

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