From 25k MRR to 1M MRR - Kyle Leavitt, CEO at CustomerHub

Welcome to another CEO Wisdom pod. We have Kyle Leavitt with us today. He's a CEO at Customer Hub, an execution-driven guy helping teams build clarity, momentum, results. Now in Rogers, Arkansas, been 35 years at some other place, has 5 kids, so right in the midst of it. So Kyle, welcome to podcast. Tell us a bit more about yourself and what you're up to.

Thanks for having me, appreciate it. Um, yeah, as you said, um, I've— I'm, I'm running a business, Customer Hub. It's a B2B SaaS, at least it has been for a long time, so we'll talk a lot more about that. I've got 5 kids, 2 off at college, uh, one's a college lacrosse player out in, um, South Carolina, and then my 3 little ones. So I'm remarried And we recently moved out from the Phoenix area. We've been in Gilbert, um, for many years and recently moved out to Rogers, Arkansas, which is in the Bentonville area, Walmart headquarters of the world. So there's a lot of Walmart executives and people around here, but we really enjoyed the, the change of pace and just being in a little bit more of a rural area. And, you know, I'm still able to run my business from here because we're, we're obviously a distributed team. And, um, just, just excited about the next chapters of life and business. Things are going great.

There you go. I love it. You have an interesting background, right? Like, you started in sales, and then you were director of sales of Infusionsoft. Was, uh, back then was a pretty intriguing, very fast-growing company, right? Tell us a bit more about that.

Yeah, it was crazy. Um, so I was selling software for Computer Associates. That was my first sales gig. And my brother, who, who is a software engineer, started working for this little company that was in the back office of an office building. They were called Infusion Software and Consulting at the time. There was like 10 dudes in a stinky office and They were building semi-custom software. They kind of had started to productize it. And so my brother was like, hey, you should check this out. I think we might be on to something. I interviewed. They were looking for a full-time salesperson, and I made the jump. It was a little risky at the time just because they were such a small growing business. But yeah, it was a rocket ship after that. We started growing super fast. And over the 3.5 years that I was there on my first run, uh, we grew, we raised a Series A, um, and grew probably 100 to 200% per year every year, um, if not more. And, uh, I just learned a ton about online marketing, um, running digital businesses. Um, a lot of internet marketers were our customers, and so I was like talking to them all day, understanding their problems. And that's kind of where I caught the entrepreneurial bug, to be honest with you. I mean, I had always wanted to do something, but, um, yeah, it was a, it was a great experience. I learned a ton. And my brother and I broke off after a few years and started our own little, uh, software business. We were doing consulting to kind of pay the bills while we built the software, and then we were a partner of Infusionsoft, and we grew really fast, and we sold to them in 2011, and I was with them again for 7 years after that, fully on the product side of the business after that. And then we left again in 2017 to start a new business. And ultimately we acquired back the original software that we had sold to Infusionsoft. So it's been a long and mutually beneficial relationship with them, but we have a standalone platform now. We're sort of doing our own thing and have a really exciting plan for the future. It's been a wild ride, but it was a great learning experience to be a part of Infusionsoft all the way from pretty much the beginning to over $100 million in annual revenue.

Yeah, it's crazy. But the part that caught my attention is that you went at Infusionsoft and you started the company, then you left your own company to come back to Infusionsoft and coming back again to Customer Hub. Yeah. Tell us a bit more about that move. I've never seen that.

Yeah, it's pretty unique. I mean, I became obviously close friends with the founders of Infusionsoft. Clay Mask was the CEO over there at the time. And then the Martineau brothers, Eric and Scott, were co-founders as well. Became close with those guys, had a great relationship with them. And when we left, my brother and I, who was my business partner, who co-founded Customer Hub with me, we had a specific intention to build a technology that would be useful to and valuable to Infusionsoft's customer base. And part of our plan was to try to sell the business back to Infusionsoft. And I told Clay that early on after we started our business. I'm like, hey, our goal is to sell to you guys one day. And he kind of chuckled at the time. But a few years later, when they were looking for additional growth levers in their business, he's like, hey, let's go golfing. And I don't know, it was around the 9th or 10th hole or something. He's like, hey, so remember a few years ago when you said you wanted to try to sell your business to Infusionsoft? I said, yeah. He said, we want to buy. So it was awesome. It was a really fun experience, life-changing experience. For me and my family. And, um, I just knew at that point, like, growing and building another business was always something I was going to do again. It took a little bit longer for me to do it the second time because I went through a divorce and some other things personally, and I just needed the stability of not, you know, doing a startup at that time. So in 2017, we finally got back to it, and And then we approached Infusionsoft when we left. We tried to buy Customer Hub back at that time, couldn't make a deal. And then they came back to us about a year later and said, okay, let's, let's talk. We haven't found a better deal than what you guys offered. So we did a deal then, and, um, we've been going gangbusters ever since.

So they were called Keap at this time, right?

Yeah, yeah, yeah. They're now— so They, um, they've had a really interesting— we could probably do an entire podcast just on my experience with that, with that business. But, um, they rebranded as Keep when they raised— I think it was either— I think it was a Series D when they rebranded. Um, and, and then a few years after that, so I think it's been 2 or 3 years ago now, 2 years ago, they sold their business in a, uh, private deal to a company called Thrive. So the product that they built is still called Keep, but they're now owned by a parent company called Thrive. Um, so they've had a really interesting journey, you know, from startup to hypergrowth to trying to go public, not being ready to go public, kind of their growth tapering off, and then ultimately ending up being sold, uh, you know, for not a great return, um, to, to the, the people that invested. But, you know, ultimately it's still a really cool success story for those guys, right?

And if they reach $100 mil level of success, like what's been the, the level of success of Customer Hub, um, And I guess a better question is like, yet, how did you reacquire your own company? Yeah, for how much? Was it like that much of a good deal? What was the, the reason to get back in the arena?

Yeah, great question. So the, the summary is when we sold to Infusionsoft, we were just getting hot. Like, we were I think we were maybe at around $15K or $20K in MRR, but we were growing fast. They saw the trajectory, you know, we got a good multiple on that. We also got a 1-to-1 on our service revenue, and we also sold some other assets we had built. So it turned out to be a pretty good deal for us at the time. When, when Customer Hub was acquired, we led the integration of the product back into that business and into their customer base and into their product suite. And it grew to, from, you know, $20,000 MRR to $1.5 million MRR in the first couple years leading that back into the business. And then it was around that time—

wait, can you repeat that?

Yeah, so we grew, we grew Customer Hub from, I think it was $20K or $25K when we sold it to Infusionsoft, uh, and over the 2 to 3 years that we were leading the integration after that, we grew it to $1.5 million in MRR.

Oh my God.

Yeah, yeah.

Okay, continue.

So, uh, and you know, a lot of that was because we now had a big customer base to sell in. Our product already was integrated with their product. Like, that was our whole thesis for the product was build it so that it can be acquired and be valuable. So we were able to grow it really fast, and we had a whole bunch of marketing dollars and a team behind it, where before it was just a handful of us growing it. So, but yeah, that was awesome. It was around that time when it started to reach its height, Customer Hub did, where Infusionsoft was beginning to taper off in terms of growth. Their technology was being challenged by, you know, ActiveCampaign and ClickFunnels and all these new marketing automation systems that were coming online. Um, uh, there was Ontraport even before that. So they just were— they were seeing new challenges, challengers in the market, and then the market was shifting. Um, and their growth really started to slow down. And so it became a top priority. Like, when, you know, when you— when your body sustains an injury and you're losing blood, all focus goes to the vital organs, right? And their vital organ of their business was their core product in Infusionsoft. Customer Hub was not a vital organ. It was doing well, especially relative to its own growth. But all the resources in the business began to focus in on the core product and on fixing that and enabling a future growth for it. And so for that reason, the focus on Customer Hub and another product they had acquired called GrowSocial and anything else going on in the business became like not a focus anymore. So they basically put those products up on the shelf and they started collecting dust. And by the time we left in 2017, Customer Hub was, you know, down from a million and a half significantly. And, um, and it was— they were losing customers. And so basically we saw the opportunity in the market around 2016-17. That's the height of the creator economy coming online and growing fast, and we saw the fit with Customer Hub and the creator economy. That's essentially what is the target audience for it. We knew what Infusionsoft was up to and that they weren't going to be doing anything with that product. And so we just— we always believed— I always believed in the product, in the market. And like I said, we were able to make a deal with them that was mutually beneficial. We got it for a pretty good deal considering, but it, you know, it needed a lot of rehab work. So we spent like a full year or two just trying to rehab the brand, the product, upgrading it, getting it up to speed. And, um, it was a, you know, it was a heavy lift, but we got there. And, um, we actually developed a new platform to replace the legacy software, and, and that's the one that we've, we've been selling over the last 5 years.

What a crazy story you have, uh, and special and different story, right? Because you, you never built in the center of the valley, right? Have you compared yourself with these guys and be like, you're not necessarily building a lifestyle business, you're building with your brother as well? Or you were at least. So it's like, how do you compare yourself to like a Silicon Valley company that grows fast, raises capital, and so forth? Where'd you stand?

Yeah, I, I would say that, um, I've always been a little bit more averse to raising capital, and I think one of the reasons why I've, I've had that orientation is because we were able to grow and sell a business and do well with it without raising capital. And I think we could have grown it even more and probably made more money in retrospect. Like, um, it was, it was the right thing at the time, but knowing what I know now, I look back on it, I'm like, man, we were at $25K growing fast. Like, I should have held on to that puppy and sold it in 3 years for, you know, an 8-figure deal. Um, But, but, you know, like, it was— it worked out the way it needed to work out. I think it was what I needed, what they needed, and I, I grew a lot from it. Um, but I think that I'm just, uh, um, that's— it's a great question. I, I've always felt like we could get the business where it needed to be by bootstrapping it. And over the last year and a half, my perspective on that has changed, um, and I've recognized, look, the market's different, the world's different, um, the way people build businesses now is different than it was back in 2011 when we sold Customer Hub. There's just so many things that are different, and I've gone from a place of feeling we can bootstrap this and do what we want to do and have the impact we want to have to now knowing in order to really do what we want to do, we do need to raise capital. And we're now embarking on that journey and really excited about the impact that we can create. My mindset now is much more about, hey, I just need to create a much bigger pie. And if I have a smaller slice of that pie, my slice is still going to be way bigger than it would be if it was a big slice of a small pie. And I see that that's where we need to go, and that's what I need to do as a founder ultimately to create the impact for the business that we want to have in the world and also the financial impact that I want to have for me and my family.

So, and what kind of impact did you have so far? A lot of folks in your position, they would be satiated, right? Like you had great success. So far for yourself, for your family? Like, where do you stand today? You have 5 kids, you just moved, right?

Yeah.

So what are your levels of ambitions nowadays?

Yeah, I mean, that first sale that we did was like, it whet my appetite. It didn't set me up for— it didn't set me up like, I'm not set up for life. I need to, you know, I need to earn money. I still have goals financially that I want to reach. Um, and so from that perspective, like, there's a lot I want to do in my own life to create, you know, financial freedom and time freedom. But ultimately, what, what I really get excited about is what's happening in the world and in the economy right now and how our product aligns to the opportunity in the market. And you know what I mean by that, and I'm sure you talk AI probably all day every day with every guest that you have, right? Um, but as you know, like, the, the cost of production has been collapsed down to pretty much zero at this point. Anyone can build anything at any time. Product building is no longer the barrier to entry. Creating a product is no longer the barrier even a good idea is no longer a barrier because people can just copy your idea in a weekend. But what's happening now is you have all of these businesses, builders, creators, and agencies creating all this stuff. And what, what we're seeing is that they're building solutions for their own businesses and for other people's businesses But then what they realize and what they don't sometimes realize up front is when they go build a solution for a business, say you're a consultant or an agency doing that, you give that solution to the business. What they're wanting to do is to wash their hands and move on to the next solution. But what they're realizing is, oh crap, I have to support this now. I actually accidentally became a software company and I did not want to become a software company. And so our vision is that, um, there's a huge opportunity there, and the differentiator and the moat of the future is building a great customer experience and helping customers achieve outcomes. Those are the two things that someone can't just copy and build in a weekend. If you have real customers, real data, you've created an experience that's awesome where they're actually getting a result. People can't just copy that, it takes years. And so we want to, we're building the platform to power modern customer experiences and we're providing the primitives for builders to build on top of. So they can build a great solution for their client through cloud code or whatever they're using, hand it off, and have it built on top of a platform that they're not going to have to manage and update and keep secure over time and not have to become a software company to do it. And then their clients have an interface that they can manage the, the data, the customers, uh, and the experience without the, the agency or creator having to go update it every single time. So that's, that's the short and the skinny. I didn't remember what your question was at this point, but that's, that's the vision for our, for our, uh, our company and for the future. We, we believe this is where, where things are going and that every business is now a customer experience business. They, they may not know that yet, but that's what they are. That's going to be their, their moat moving forward.

That's intriguing. Um, and yet, like, on your side, what kind of habits, uh, do you adopt nowadays to sustain this, uh, this grander vision? Like, any weird quirks of yours? At what time do you get up? Like, what's your, your daily performance routine to be the, the best CEO you can be?

Yeah, that's a great question. Uh, I'm, I'm fully aware that I've got to manage and maintain my mental, emotional, and physical health and be, uh, running in tip-top condition in order to lead my team and lead the business. I have to show up clear. Um, you know, I have— I don't have any like bad personal habits. I've never been a partier, drinker, or anything like that, so I've always lived a super clean life. But, you know, I'm in my later 40s now, and I'm noticing changes with my body and with my health, and I'm realizing that I have to be more intentional. I can't pull late-nighters, you know, 3 or 4 times a week and not have it impact me for the following week. I mean, if I, if I pull a 2 AM or 3 AM, I'm gonna feel it for the next 2 to 3 days, and I'm going to be a little cloudy. So I'm optimizing for sleep, health, diet, exercise, and still, you know, spending time with my family and my kids to be able to enjoy my, you know, my, my family and my family life. That's ultimately what's most important to me.

Right. Um, do you still work with your brother? How did you manage to keep that relationship, uh, flourishing in the couple of decades you've been working with him?

Yeah, it's a great question. I get that all the time. I've, I've had I've had a lot of friends that have done business with their family, and 9 times out of 10, it has not worked out well. Um, this is the second time— Nathan is my brother— that he and I have, have run a business together, this business exactly. And, um, I think we have some unique personal attributes and personal, um, personalities, I guess, attributes that allow us to work well together. We're sort of the yin and the yang. Like, all the things that I'm good at, he's not very good at, and all the things that he's good at, I'm not very good at. And so we kind of are very clear, like, that's his lane, This is my lane. We work together, we collaborate, we're both pretty easygoing, um, open-minded. Like, um, you know, we have opinions, we have disagreements sometimes, but we're able to work through those in a productive way. And, um, usually it just takes us having a conversation or two and then we're good to go. But we've been attached at the hip all growing up. We're about 18 months apart, and so we grew up doing everything together. We had all the same friends, we played sports together, we played, you know, we created goofy games and things together all growing up. And so this is just sort of a natural extension to who we already were. We always did everything together, and it's been a great experience running a business together with him.

What do you have your sights set upon this year? What are financial goals of yours? You focus still on recruiting like A players? What's, uh, and what about the product? Where do you want to take it this year?

Yeah, um, so main goals, um, in terms of enabling the business is raising capital. We're, uh, we're going for $6 million on a $15 million valuation, uh, building a team out. So I'm already talking to people and recruiting 4 key leadership roles in the business that I know we will need in order to achieve this next growth curve in the business. Um, for the product, we've already built most of the, the platform primitives and technology that we need to deliver on this new model that we see emerging, and we're, we're vetting that out right now with some internal builds custom builds on top of the platform for a handful of customers to, to prove the model out. And then essentially the next phase after that will be opening the platform up to builders, um, and opening up some distribution models where a builder or an agency can take their own solutions to market built on our platform. And so We're not going having to sell everything direct to consumer. We have feet on the street, agencies and partners out there that are— they're the builders, and they're taking our— their solutions to a vertical market or a niche that they're an expert in, and that'll be built on our platform, saving them a ton of time, money, and maintenance so they can basically focus on selling, and we can handle the back end for them.

Who are you studying nowadays? What's your learning stack like?

Um, I listen to a lot of podcasts. Um, I, I try to read, but I, I don't read— I don't like to read in the evenings because I read so much during my work day. So I mainly listen to podcasts. I mean, I follow a lot of the, the guys that you would be familiar with. Uh, you know, Hermosi, and motivators like Goggins and other people like that on social media. I enjoy, um, and I think mostly for me that's about, um, learning and growing mentally and emotionally, um, and, you know, physically. It's, it's most of my learning and my growth right now is focused on my health and keeping myself in the condition I need to be in to lead and grow the business. Because I just— being in a business every day, you're just, you're learning and growing all in all the ways related to the business just by being in it every day. Um, and so I try to step away in the evenings and focus on other hobbies and interests and, uh, you know whatever it might be, unplugging and getting outside, going on a run or a walk or whatever I need to do to unplug is, is really where most of my energy goes outside of my day-to-day.

Love it. Where can people find out more about you, Kyle?

Yeah, uh, they can check out my LinkedIn, Kyle Levitt 1. Um, our website is customerhub.com. That's soon to be, uh, rebuilt. So we're in the process of deploying a new website and some new assets to start sharing this new vision with the world. And, uh, we're right on the front of a seed raise right now, so we're just beginning to talk with investors and kind of get the process moving and finish out all the assets that we need to, to provide what's needed to do this raise.

Love it. That was Kyle and Charles for another