Five Growth Lessons From Scaling to $75+ Million in Revenue with Jason VandeBoom at ActiveCampaign

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C K.com as you're innovating your product and service, you should also innovate how you grow a business. And oftentimes a lot of people try to find a lot of different growth hacks and sales and marketing hacks. And those are definitely probably useful. You should look into them. But I'd argue the number one growth hack you probably have that's right there already and nobody thinks of is just people themselves. It goes against the idea of being product first and product solving all, but it can do so much that others can't or won't do. I need some traction. You need some traction. Let's get some traction.

Hey, what's up innovators, entrepreneurs, visionaries and disruptors. This is your Traction podcast host Lloyd Lobo. We're a community of over 100,000 people just like yourself on a mission to help you get the methods, the money and the madness to explode your business growth. Featuring stories and tactical advice straight from those who've done it before, like Shopify, Twilio, Asana and many more.

So I love reading stories about growth companies. Trying to understand all the different playbooks they have obviously drives some inspiration, but it also is a way to find what are the commonalities, what's working for everyone. At ActiveCampaign, we're doing things a little bit differently. We're doing that, we're trying to learn as much as we can, but we're trying to figure out is there a different way? Can we still find our own path and at times just can we take what's known and try the opposite and prove it out? So today I'm going to talk about how we've scaled to date a little bit, some of the lessons learned from that and kind of what we're leaning on going forward, taking that less than obvious path. Lot of things that don't necessarily make sense on paper but have really allowed us to grow in a really efficient manner. Quick background though, because it gives a little context for why we think like this and whatnot. So Gotta go all the way back to 2003. I was doing consulting, repeating a lot of the same work over and over. Did not enjoy that. So decided I'm gonna take something I was building, package it up as on premise software. And then at the same time I'm gonna choose to focus on the small business market. Cause I wanna take two really difficult things and do them at the same time. So I spent the next decade building out tools that had to do with the customer lifecycle. So we started with contact management. When we had our first couple customers, we needed a way to communicate with them. Eventually the inbox wasn't working so well. So instead of buying help desk software, we built it. We kept doing that with every single tool we needed for our entire customer experience. So we went from one to eight products in a decade and one to eight people in a decade, which doesn't make a ton of sense. And maybe isn't that growth story you hear about and whatnot or that is celebrated. But I would argue that type of business, sustainable, growing, profitable, those type of businesses should probably get a little bit more credit now. At the same time we're getting a lot of insights into the customer experience, into growing businesses and we're building automation within each of the tool sets. But we ultimately concluded unifying the customer experience and automating that could provide more value. So we started transitioning over to solving for that and also decided it's probably time to switch over to software as a service instead of on premise. Took us three years to do that. We didn't have funding, we needed to pay for things. And it was critical that we brought our customers along the way for the journey. Since that we've been able to fortunately to be able to help 75,000 businesses with their customer experiences, we've been fortunately able to work with building the team from just 20 people then to well over 500 today, creating a category of customer experience automation. And the key to that, the key to the growth, sustainable growth. And I'd highlight we didn't have to pay for all that growth. Has really been trying to find our own path. So some of this may sound random, some of it may sound early stage, but I'd say these are the things that got us here and continue to help us accelerate further. Lesson one is CX first. So I used to be the biggest believer in being product first. I used to think that if we can't solve it with product, we've ultimately failed somewhere. I came from an engineering background. I really wanted to prove that out I was very vocal about the fact we would never have a sales team. Things like that, things that I sense have changed my mind on and I've realized over time, like product first is well intentioned, you should have that focus. But it's also quite narrow. And we all know this because when we start a business, we start a product, we obsess about our early customers. We spend so much time with them, we're trying to learn where are they finding value, what can we do to get more insights from them. But then something interesting happens. We start getting traction, we start getting more customers, and all of a sudden we start creating distance. Some of it's maybe human instinct. It's like you want to stay away from some of the noise, you want to be able to focus in on some other things. I think it's also this common thought of just as you scale, you have to build out systems and those systems are gonna impact your customer experience itself. So what do we do? We maybe start with support team. Makes sense. Now you're one layer away from talking to your customers. Then you take all that feedback that used to treasure so much and you try to solve so much with tooling. And tooling becomes the answer to just about everything instead of actually talking to them. And it's all an attempt to make this a very quantitative issue. And I'd argue the customer experience is far more qualitative than it is quantitative because you need to get that tone. And I'd say NPS is a really good example of this. And I suggest for everyone starting a business that I talk to to avoid it for as long as possible. You can get the same value from NPS by just asking the question with whatever channel you want. By getting that down to a number, you start to create this culture of thinking about everything in this numeric format. And you start thinking about your customer experience itself trending up or down by that. We take it quite the opposite. In the way of all nps, all churn data goes into my inbox and I just sort of consume through that, scanning through it. So I may never know our NPS number, but I'm fine with that because I actually know the actual tone of current customer experience and the direction in which it's going to. And so that's something that's spread throughout the company. Leadership took that on, started sharing stories of what they were reading there. And then throughout the company, more and more people asked to get that data. Ultimately we found out like it might not be a good idea to send 75,000 emails to everyone. So we built out paths. Some of them are systematic with tools, some of them are human based where we actually routed around. But to get a team to understand the actual person, the tone, the experience that they're going through, to have that in your engineering team, within all your customer facing teams in that qualitative manner creates a culture of engagement and creates a culture of people actually wanting to authentically help. And you can do the same with support. We built similar ways and your customer support is the front face of your company. You should be utilizing them to help spread what their tone is that they're reading. With success, I think we overcomplicate and overthink this. At least with early stage companies we obsess. And at activecampaign we did this. We obsessed about what toolset is gonna make it successful for us and what ACV limit or like what account value can we actually manage an account for. At the end of the day we just chose to use a basic CRM, get started, hire a couple success managers with the mandate that we're gonna have customer success for every single customer account, even the ones going down to $9 a month. Now we've been able to maintain that by having this blended approach of customer success for different types of customers. Now things were going great, retention was improving, we were building this out technically on data, everything was looking good. But we noticed something with that sort of qualitative view into what we were reading, that we still had some opportunities and they were being formed because we were building sales, we were building support, we were building success all independently. And while they were all like in common theme, wanting the same thing, some gaps were forming and I was trying to jump in and fix these from time to time. But ultimately it needed more of a focus. So we created this idea of a CX role and turned into a CX team. The idea here is it does not exist in support, doesn't exist in success sales. No part of the organization, able to impact throughout the organization and really try to improve the customer experience. Also important to note, we did not create this with the idea of bringing in some CX leader that had a ton of experience. We just found some passionate people within the company that really loved the customers, love the customer experience and they've been able to highlight and prove out a bunch of additional changes throughout our customer experience. And now this impact, like we've been able to prove it out from a data standpoint now and a qualitative standpoint. So it certainly worked. What's interesting here is like our chase of tooling. If we would have had a tool that would have shown or highlighted how we would have saved a lot of money or how we would improve retention, we would have paid millions of dollars for that. We wouldn't have second guessed it, but the fact that we're using a team and using humans to solve for this makes us think Second lesson number two is finding your own path. Differentiating with your customer experience is just really the start. I really believe as you're innovating your product and service, you should also innovate how you grow a business. And oftentimes a lot of people try to find a lot of different growth hacks and sales and marketing hacks. And those are definitely probably useful. You should look into them. But I'd argue the number one growth hack you probably have that's right there already and nobody thinks of is just people themselves. And it's counterintuitive because service is frowned upon. It goes against the idea of being product first and product solving all. But it can do so much that others can't or won't do. And I'll give you a couple examples. Early on we had a freemium offering of the platform and we had this idea we're gonna offer strategy sessions 45 minutes and we're talking internally about how we should gate it to the paying customers and whatnot. We chose to do it for everyone. We conducted thousands of these 45 minute conversations just talking about helping people grow their business without a sales push. It did not result in revenue. So on paper it looked like a failure. But it did result in understanding what people are looking to use the platform for. Where are their pain points as they grow a business and and help shape our product roadmap. I always try to question like a business that's growing and whatnot and thinking about is there any one thing within your business, within your product that could be solved in part, maybe it's not the most ideal fit, but allows you to get something out there where you use people. Today we have another good example of we have a migrations team that's growing that helps move data over from. If you're using another platform and you want to go to ActiveCampaign, they'll spend 40 to 80 hours sometimes setting things up and moving data. Now the account that we're spending 48 hours on is maybe giving us $1,000 a year. So on paper it seems like a terrible idea. Internally, a lot of people push for charging for this and whatnot, but we find it creates advocates it gives us an understanding of how people are using other platforms in the ecosystem and it's quite valuable. And the team itself then identifies what areas when we build tooling should we invest in so that we can make it more automatic. And the nice thing is we've never replaced people, we've never had a team be really successful at something and then had to say goodbye. It's more they move on to the next unscalable thing. Now that may sound like scary or unrealistic, but that's the point. And it allows for greater opportunity of growth. We start off the company with a very small business first approach, knowing that if we start there, if we can operate there, stay sustainable, there's, we can go mid market enterprise or they'll come to us. And we're choosing to stay with the small business because it's so defensible. Another example though, where we took a, it took us a little more time, we wanted to spend more time with our customers. So we looked around on the market, what everyone else was doing and we saw user conferences. So let's do that. So we did a user conference, had a ton of customers come in. It was a great event. And I started talking to more and more and hearing stories about how people would fly into Boston, rent a car and drive to Chicago because they were so passionate. They wanted to be there, but they needed to find a more affordable way to get there. So then we started thinking again, okay, let's look at the market. How do we get closer to them? And we're seeing everyone else is doing workshops, maybe a dozen localized events. So we start planning for that. But then we catch ourselves and we're like, okay, we're once again just copying what everything is on the market. So we thought, okay, we need to go a little bit like crazier with the idea here. So we decided this year we're going to do 200 events. They're going to be in markets primarily that are not your obvious market. And we're going to see how that goes. And we're well on track to doing that now. And what's interesting is internally we had a lot of pushback on this. People were very defensive of the idea of this is not scalable, this is not making economic sense, worried that we're just spending cash in an odd way. But we've been able to build advocates, build small meetups around the locales we go to. And we're actually able to attribute about 50% of the event cost within the first 90 days. Like these small Events are phenomenal. And it's not a selling event. It's just taking our customers and helping them get further and further into the product. And so while we do these things, we with intention talk to our team and market internally how it is something difficult, how we are taking a chance, but then also when it's successful, marketing that as well. Because what I really want is a culture of people wanting and seeking that difficult thing. Because that's what will drive engagement and that's what will drive innovation. Lesson number three, don't go global, be global. Our first customer was actually a scuba diving company in Mexico. So we started right out of the gate of having a global presence. We're now 55% international. And when people hear that, it's typically questions about how do I do that? Followed shortly by looking to increase sales x percent next year or something like that. But I truly believe that true sustainable international growth has to be within the DNA of your company. And it's not something I would necessarily bolt on. So if you ever want any form of international, even maybe I would start right now and I would start with product and engineering. And there's very easy ways of doing that. Early on we would in our development and engineering stories, work in localization, use cases and whatnot as we explain how the feature should be built. With customer stories, we with intention highlight and bring in localized stories as well from other markets. And also we work to get customers to us. And so much so that we try to find people we need a translator for because it's a really powerful experience for your teams to understand the difficulties people go through to use your product or service, but also the value that they see, which is why they do it. And now the nice thing is I think there's this misconception out there that if you go global, if you want to go target a market, you have to do it all at once. Meaning you have to get your currency, you have to get your team, set up your website, Everything I would say much more possible if you just do it incrementally. Start with product and engineering, allow it to just be an Easter egg. For years we had the platform translated in 10 different markets. Sales site was English, all of our reps were from here and not speaking all the locales and the currency was USD. We were still able to get some traction in other markets. And what's interesting then is we had a lot of advocacy form in those other markets. And then once you're ready to invest, pick a market and just choose one. Because once you Start introducing different currencies, different good to marketplace. It's going to add a lot of changes to your organization. But when you pick that market, choose a market that is not your number one customer market. Don't choose a market that your customer or your competitors are going to. Instead, talk to any early customers you may have. And I spent a lot of time talking to customers when we chose the first market we were going to go after with intention and find that one that is the highest potential instead of just the most proven. Lesson number four, Pain is not success. So there's a common thought you should struggle. There's articles of people barely making it and pain is like for whatever reason slightly idolized. And it's true, it's a roller coaster as much for the entire team as it is for a founder or anyone starting a company. But that type of thinking makes us look for it, it makes us keep it longer than needed. And it's interesting because it's very ego driven or self validating. When I look at all the time I've spent on things and overextending and doing things well beyond I had to, it was all to really either validate to the outside or validate to myself that I was still the right person. And it hinders our ability to grow. But knowing that like how do you actually combat that? I believe it really requires a true focus and continual work. And just like you think about delegating out, just like you think about creating roles and creating teams as you scale, I think you have to have that same intentional focus on actually creating happiness with an organization as well for yourself. To start at ActiveCampaign, we have a couple things. Some people are in the practice of like once a month having a sheet of paper and just going through your day logging everything on one side or the other. One side higher energy, one side low energy. Sounds so simple, but you might be surprised by what you would actually log throughout your day. And then you can work to find more time to spend on the higher energy moments so you can find ways to scale your business to take off some of that low energy. And this sounds simple and I realize it's a growth conference and like this doesn't really scream growth, but I'd argue that this is probably the biggest growth tactic I've had throughout all the years of activecampaign. Some of you may also be thinking like that's great if you're a CEO if you have unlimited headcount and you can not do anything on like the not so fun side of the sheet. But I believe a company can and should have a culture that supports this. At ActiveCampaign, we intentionally talk to everyone within the company a couple times a year with this sort of theme. We run programs and tests all the time to sort of indirectly work towards this goal and investing in L and D well beyond our peers. But most importantly, possibly it's setting that expectation with everyone that actually, while this is nice, a company cannot create happiness. It can't do that for people. But we can make it a focus, we can make it a theme, we can allow people time to pursue it, and we're there to help guide lesson number five, validators. So when scaling a company, it's normal to compare to peers. What's on the market? We want to know, are we winning, are we losing? Who's going to destroy us? But so much of that is designed to make you feel like you are losing or to trick you down the wrong path. There's a ton of false validators or maybe there are more partial validators out there that a lot of people cling to and that may be employee count. As if that's actually like a validation of something, maybe funding. Turns out that's not always a positive thing. Press speeches, a lot of different noise and data points and we consume all that and we're trying to figure out are we doing okay. And it's a very freeing feeling to just stop chasing that. But once again, that requires intention because the human nature, human mind is going to constantly chase after that. But so having that as a constant reminder and trying to check when that's happening. At ActiveCampaign, we spent so much time throughout the years comparing to our peers in the market and at times it almost started influencing like what we were gonna even do platform wise or product wise. And that's scary. And we ultimately found the very fact that we were quite opposite from a lot of the people we were comparing to was actually an advantage. So knowing that, knowing if those are false or partial validators, what is a true validator? Now this may sound generic and obvious, but it's your customers, it's your attention, it's that tone of your customer experience. That's something you can celebrate, that's something that's long lasting and you can make it something that does not sound generic, does not sound obvious inside an organization if you internally market it. And one check I always have on activecampaign is ensuring we don't celebrate and over celebrate the false validators and stay true to what we believe in is I look at certain milestones like so when we crossed 500 employees, we didn't have a giant party, we didn't have a giant celebration. We didn't even tell anyone. That was by accident. The team found out because someone noticed in the Slack channel there was more than 500 members, took a screenshot and said whoa. With a screenshot of that. And it was good. There's good energy with it. But compare that to the energy and the momentum we have in the channels that are sharing customer stories and sharing how we're going a little bit above and beyond and helping growing businesses every day. Or compare that with our all hands where we spend a good chunk of that time really digging in and understanding a business. The people behind the business that started the business, how they progressed, how they started eventually using ActiveCampaign and how we play a small part of their success. But then also how many people throughout the company has helped them. And highlighting from legal, sales, support, success, engineering, whoever, all helped impact that story, no matter how much of the account value. And that creates a culture of people actually caring about the customer experience, caring about that customer value to a different point, caring about that tone within the customer experience. And so while you do that, I would also just advise like to trust your business differentiation, follow some of your hunches, don't let someone else have to prove it out before you try it. Because I really believe building a high growth, scaling sustainable business is all about finding your own path and innovating upon how you scale a business in addition to your product or service. Thank you so much.

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Focused on the tech stack thinking it was brilliant. Now I know that it's no way for you to.