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About a month has passed. And I haven’t gotten on a plane. Or gone to a conference.  But I still got the opportunity to speak with Clate Mask. We discussed the two-year transformation his company InfusionSoft went through to become Keap.  I eagerly anticipated this conversation. After all I have known Clate and followed InfusionSoft for about twelve years. And admire what they have accomplished in that time. Still questions remain about what happened to the company while they were transitioning from InfusionSoft to Keap.  And I really appreciated Clate taking time to answer those questions. They shed more light on the transition and how it happened.

Check out an edited transcript of our conversation.  And see the full interview. Watch the video or click on the embedded SoundCloud player below.

Lessons Learned Transitioning From InfusionSoft to Keap

Brent Leary: Do you feel like there may have been a disconnect between some of the small businesses that were already passionate about what you were doing with Infusionsoft? Because it took a little time for you guys – a year or two – to really retrench and come back?

Clate Mask: Yeah.

Brent Leary: Do you feel like you lost a little connection to the small business community in that time?

Clate Mask: Yeah, no doubt. It’s such an interesting thing to go through this innovator’s dilemma from the inside. Because that’s really what you’re going through. You have to create something for a new audience without the existing audience that you serve feeling like you’re leaving them. And, of course, that’s not what you’re doing.

You’re trying to expand the market that you serve, but it’s inevitable that when you spend resources and put time and effort into the newer version of the software, the lighter version of the software,  your long time existing customers say, “Hey wait, what about us? We matter here too.” And, of course, they absolutely do; and they’re a critically important part of our future; and over time they’re getting the benefits of all of the product development work we’ve been doing for the Keap customers.

Changes in the Organization

Brent Leary: Talk a little bit about the changes in the organization. You had some really top notch executives that were there from the beginning, and then you transitioned to something else. How difficult was it to go through the transition, and how difficult was it to replace the kind of folks that you had at the beginning?

Clate Mask: To me, this is the hardest part. It’s one thing to re-platform and create products that can serve a broader market. It’s another thing to go through the leadership transformation.  Leadership transformation, it’s really tough because you’ve got good friends and people that you’ve worked with and that you care about and love and you’ve done great things together. And I think what happened for us is we recognized that this powerful version of the software that we had created needed its companion product, the light easy version.

And the people who created the powerful versions. It was tough for us to have those same people create the light version. In fact, we tried, as you know. And that didn’t go well. Didn’t work out, and so we needed to blend in some talent from the outside that had the experience of creating great user experiences. And creating an easy to use software product, and in bringing that talent in and blending it with the talent that we had. Some of those people that were with us for a long time aren’t with us today. And some of those people we brought in to blend in aren’t with us.

Great Combination of Long Time Employees

But we created a really great combination of long time employees that really know what small businesses need to grow and then new talent that came in and helped us to simplify. And that really is the word that we focus on. I think you know this, Brent, when we had our 10 year mission that concluded a couple of years ago, we kicked off this new Mars mission as we talk about it. And it’s to simplify growth for five million small businesses worldwide. And that’s the work that we needed to do in order to get the new product out into the market, a platform that includes everything from a solopreneur that’s just getting started in their business, to a savvy marketer, more established business that uses Infusionsoft.

Brent Leary: Are there things that you wish you could have done differently over that transitional period that, now, with time and experience, you’re like, “Man, I wish I had thought about this,” or, “Man, I wish I hadn’t done that.”

Clate Mask: Oh, where do I start? Yeah, this is tough stuff. There’s a reason why software companies don’t try to go “downstream.” It’s really difficult. You know this better than anybody. Almost every software company moves upstream over time. It’s a gravitational pull almost when it comes to software companies.

Finding Their Passion

But that’s not what our passion is. That’s not where our heart is. We’ve always been about helping small businesses succeed. We’re focused very much on businesses that are 1 to 25 employees when they start with us. Our real sweet spot is 1 to 10 employees, as you know. That’s where most of our customers are. And so, we wanted to get it right for those 1 to 10 employee companies that aren’t marketing savvy. How do you get it right for them?

And there’s a whole question about, “Well, why not just stick with the marketing savvy ones?” But that’s not our mission. That’s not what we’re up to. That’s not why we started this company in the first place. So, yeah, did we learn a lot of lessons in the process? Absolutely. And do I understand why most companies move upstream or decide not to re-platform but sell the business instead? Yeah, I understand. It’s really tough stuff.

And there’s only one reason you do it. And that is you really are compelled by the purpose and the mission of the company to go achieve that. It’s not because the shareholders are driving it. Because that’s not what makes the most sense, to be totally honest. It’s not because the market opportunity is … It’s really a commitment and to the purpose that we have as a company, to help small businesses succeed. And in order to do that at the scale that we intend to do it, we needed to create versions of our software that can enable small businesses to grow with us, whatever stage of growth they’re in.

The World of Infusionsoft

Brent Leary: So we’ve had this conversation offline a couple of times around Infusionsoft. All right, geographically you guys are in your own little world.

Clate Mask: Yeah.

Brent Leary: But it seems like you guys are, although you did well and you brought on a ton of small business customers, always felt like you were a little bit separated from the CRM world. As you are now Keap, do you plan on doing things differently? Do you plan on building more brand awareness of Keap in the traditional CRM industry world? Because it just felt like Infusionsoft was a big secret to some folks. And I was like they’re around, they’ve got several thousand customers, but they just weren’t exposed to the outside CRM world. Do you feel like you’re going to have to do more of that as Keap than you did as Infusionsoft?

Clate Mask: Yes. What happened was, one of the mistakes that we made, Brent, was when we put our product into the market 10, 12 years ago, when it was really picking up steam, it was CRM software, as you know, but the marketing automation component of it was really a game changer. And so what happened was these early adopters who wanted that power, their feature request and their demands and their desires for what we did in the software pulled us away from mainstream small business.

CRM is Dead?

And we became known as the marketing automation software for small businesses. And it was funny because all along we’re like, “Well we’re really CRM.” But then we kind of went with it. And you remember there was a point where we said, “You know what? They’re all telling us it’s marketing automation.” And one of my marketing leaders made a provocative statement and said, “CRM is dead.”

And what he was really saying was, “You know what? We’re kind of owning up to the fact that we’re a marketing flavored CRM. It’s really marketing automation.” And so that was the thing that I reflected on. I realized we went down the marketing side of things. And while it’s definitely an important part of CRM for small business, you see that, you know that’s true. You see CRM vendors across the industry or all over the landscape adding marketing automation to what they do because it’s so valuable for their customers. But I think we went too far down that path.

So to answer your question, yes, Keap has absolutely come back to its roots as CRM, and it is CRM first and foremost. And one of the things that we’ll do as we drive Keap to a more mainstream audience is we’re not bringing them right into the campaign builders and the automation and all of the advanced things you can do.

Comfortable in the Day to Day

We’re really comfortable in the day-to-day activities that you do in the software to manage your customer relationships, to follow-up more effectively, to show up and be there for your customer the way you need to. And so, yes, we have both intentionally built the CRM capabilities of Keap at the center of what everything that we do. And we will, over time, not make that mistake of getting pulled down into one avenue or one branch of the broader CRM world like we did with marketing automation and Infusionsoft.

Brent Leary: You started circa 2001, and you started with small business at the forefront. It’s 2019 now, you’re Keap now. How is the small business customer, the marketing small business customer, the needs of the small business marketing customers, what’s been the biggest change from those early days of Infusionsoft to what you’re doing now with Keap?

Clate Mask: I think mobile is obviously a massive thing for people. Social is a massive thing for people. Those two things just weren’t the case. I’d say it was probably 14, 15 years ago that we started to get traction with our Infusionsoft product. So I think those things are massive. But I think, fundamentally, the customer’s expectations are different. Our customer’s customer’s expectations are different. They expect a much faster response.

Expecting Availability

They expect availability from their vendors; they expect to be served very quickly. If Amazon can do it and my local pizza shop can do it, then I expect every service provider that I’m working with to do it. And by the way, over 90% of our customers are service businesses. So we’re very much focused on, yes, focused on small business, but inside of that it’s service businesses and really professional services. That’s where even our tighter focus is.

So, if you’re a service business, you can’t afford to drop the ball, like used to be the norm in small business. What’s different today is you still have lots of different apps that you’re trying to manage, but you’re managing them on the go. You’re managing them in a lighter way with different apps. And I think that the biggest thing that we see for small businesses is if, that wasn’t necessarily the case back when we started, is if they don’t stay up with the expectations of their customers, they lose a client very, very quickly.

Infusionsoft and Small Business

Brent Leary: What do you tell the small businesses that felt like you left for a while and now you’re back? What can you tell them to reassure them that you’re back and you’re back for good?

Clate Mask: I think the best thing I can help them see is all of those things that we were building and creating that were for the lighter, easier version of our software as well as those capabilities, all of those capabilities are coming to them. Now, there’s this, “Well I see Keap over here and Infusionsoft over here,” but it’s all one platform. And there’s this bifurcated view that sometimes our customers have. And over time what they’ll see is, “Oh, I get all of the stuff that they’ve been building, they were just delivering it first to those customers and now it’s coming to me.”

So I think that’s probably the biggest thing, is for them to go, “Oh, okay, the stuff they’ve been building that I didn’t think mattered to me, it actually really matters to me now, and I’m excited about it.” Because, while we’ve been focused on creating that easier, lighter version of software, they’ve said, “Hey, can you modernize my UI and give me more mobile capabilities?”

Features of Keap

They start to hear and see some of the things that we’ve built in the Keap product, and they say, “I want those things, the integrated appointments or this really smooth, easy quotes and invoices and payments.” And so, I think that’s probably the most exciting thing for me to be able to share with customers, is it’s coming soon to an app near you.

Brent Leary: And what do you think about today’s competitive landscape, the different companies that you’re basically competing with for attention and mind share? There’s always going to be Salesforce. But who do you see as your main competitors for the customers that you’re looking to bring onboard?

Clate Mask: We definitely see a hodgepodge of tools that our customers are using before they come on board with us. They’re frequently using an email marketing tool. They’re frequently using some kind of contact manager to keep things straight. A lot of times they’re using different tools for commerce or shopping cart capabilities.

An All in One CRM Solution

And, as you know, the thing that makes us different is, as an all in one CRM solution for small business, we have CRM at the core, but then we’ve got the marketing automation, the sales automation, the e-commerce and payments capabilities with quotes and invoices. So, it’s a little different solution than what we see out there from, say, a HubSpot or Insightly or something like that. Zoho is kind of its own animal because it’s got all the different apps and tools.

But frankly, for most of our customers, that’s overwhelming. It’s like, “Well I don’t want to go get a million different things. I just want this is one platform that I use.” And I know they’re doing some things around that. But I’d say Zoho is a competitor. I’d say a notch above us HubSpot is a competitor.

We don’t see the Freshworks of the world, maybe a little bit of Insightly. But again, the customer that comes to us usually has a marketing orientation. They’re doing some email marketing. If they’re not doing email marketing when they come to us, we’re usually not the CRM solution they’re going to look for. Because they want to combine their marketing and their CRM. And that’s one of the key benefits that we offer.

Moving into the Future from Infusionsoft to Keep

Brent Leary: So, a year from now, two years from now, five years from now, where are we going to be with Keap?

Clate Mask: So, five years, let’s see. We’ll be over a million customers at that point. We’ll have our lineup that enables customers to come in and grow with us. Whether they want to start brand new business getting started with us, or grow with us up to, say, 100 employees or so. We have the platform to enable them to grow. You’ll see us have a much broader partner ecosystem. We’ll be well over 1000 employees. And I’m going to leave open whether or not there’s a KeapCon out there.

Brent Leary: So do you foresee that growth coming organically? You’ve made some acquisitions in the past. Is that going to be part of the equation?

Clate Mask: I think primarily organically. But I do see some acquisitions as well. But I think, first and foremost, we’ll be known as the leading CRM software for small businesses. Where we have, in five years, we have made it really clear there’s a different need for small businesses in CRM than what is being served by HubSpot. Or by some of the other solutions that are out there. Really focused on that 1 to 10 employee company, as we call them.

There’s service businesses in the professional services realm. And we see serving that customer really, really well with an all-in-one solution with integrations to all the key things that we don’t build ourselves. When we say all-in-one, we don’t literally mean there’s nothing else … We mean it’s the CRM at the core, with sales and marketing, payments, and then integration to the other apps that people use.

This article, “Clate Mask of Keap: Leadership Harder to Transform Than Products and Platforms in Order to Reach Broader Small Business Market” was first published on Small Business Trends