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Clate Mask and he has been educating and inspiring entrepreneurs for over a decade. He\\u2019s recognized by the small business community as a truly visionary leader. His passion for small business success stems from his personal experience, taking Infusionsoft from a struggling startup to an 8-time Inc. 500 and Inc. 5000 winner. As CEO, he\\u2019s leading Infusionsoft on its mission to create and dominate the market of sales and marketing software for small businesses. Under Clate\\u2019s leadership, the company has landed 4 rounds of venture capital including a $55M series D led by Bain, with contributions from prior investors including Signal Peak Ventures and Goldman Sachs. He\\u2019s also named Ernst and Young Entrepreneur of the Year Finalist, a Top 100 Small Business Influencer by Small Business Trends, and one of the 100 Most Intriguing Entrepreneurs of 2013 by Goldman Sachs.

Famous Five:

• Favorite Book? \\u2013 Crossing the Chasm and The Advantage
• What CEO do you follow? \\u2013 Marc Benioff
• Favorite online tool? \\u2014 Thumbtack
• Do you get 8 hours of sleep?\\u2014 Never
• If you could let your 20-year old self, know one thing, what would it be? \\u2013 Clate wished he knew that business, not law, was the path for him AND that building a team and culture is far more fun than making money.

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Time Stamped Show Notes:

• 01:18 \\u2013 Nathan introduces Clate to the show
• 02:28 \\u2013 When you serve small businesses, make sure you have the right target customers
  • 02:35 \\u2013 There are 27M small businesses
• 03:02 \\u2013 \\u201cYou got to get it right. You got to get the market fit\\u201d
• 03:20 \\u2013 Infusionsoft focuses on businesses with 2-25 employees but the sweet spot is 2-10 employees
  • 03:28 \\u2013 Average customer pay per month is $250-300
• 03:54 \\u2013 \\u201cIt\\u2019s CRM, marketing automation, sales automation, e-commerce on one suite\\u201d
• 04:03 \\u2013 Majority of Infusionsoft\\u2019s revenue is SaaS
• 04:10 \\u2013 Infusionsoft\\u2019s $3.4B payments processed
• 04:36 \\u2013 Infusionsoft created their own payment solution 2 years ago
  • 05:04 \\u2013 It triggers all kinds of Infusionsoft\\u2019s automation
• 05:50 \\u2013 Infusionsoft started in 2002, as a software company
  • 05:56 \\u2013 Infusionsoft pivoted in 2007 and decided to really go for it
  • 06:16 \\u2013 \\u201cWe started, like every small business, with no intention to build something big\\u201d
• 06:34 \\u2013 Clate saw how Salesforce moved upfront quickly and that opened up the opportunity for Infusionsoft
  • 06:43 \\u2013 \\u201cWhy not be the Quickbooks to sales and marketing software\\u201d
• 06:53 \\u2013 Infusionsoft\\u2019s dark days
  • 06:56 \\u2013 In the first 3 years, every day was a fight for survival
  • 07:43 \\u2013 The second dark day for Infusionsoft was when their product market fit went off and the churn rate went up to a 8% gross monthly customer churn
  • 08:08 \\u2013 Infusionsoft had raised $17M when their churn skyrocketed
  • 08:38 \\u2013 Infusionsoft\\u2019s churn rate is usually 2-2.5%
• 09:15 \\u2013 Infusionsoft has raised a total of $125M and about half was capital for the business
  • 10:00 \\u2013 \\u201cWhen you create something that\\u2019s growing, there\\u2019s always a new investor who wants to replace an old investor\\u201d
  • 10:27 \\u2013 When the round becomes \\u201cover-subscribed\\u201d, you have to take a percentage of what you\\u2019ve raised and make it available for your existing shareholders to sell some shares
• 11:09 \\u2013 Infusionsoft currently has around 600 employees and still continues to grow
• 11:20 \\u2013 Infusionsoft has around 135K users
• 11:30 \\u2013 Infusionsoft just completed their 10 year adverse completion
• 11:56 \\u2013 There are more things coming up for Infusionsoft
• 12:27 \\u2013 Average MRR
• 13:19 \\u2013 Clate shares why they haven\\u2019t gone public
  • 13:58 \\u2013 What happens is private money is easier to raise
  • 14:06 \\u2013 Historically, public valuation was better than private valuation, but that shifted over the years
• 15:00 \\u2013 When the market changed in 2014, Clate had decided that it\\u2019s better to stay private as long as they could
• 15:30 \\u2013 Infusionsoft is currently between $100M \\u2013 150M ARR
• 15:51 \\u2013 The leverage that Clate pulled to turn their monthly churn
  • 16:10 \\u2013 Infusionsoft is serious about helping small businesses succeed
  • 16:22 \\u2013 The breakage model that results in you having a lot of churn
  • 16:45 \\u2013 Infusionsoft says \\u201cno\\u201d to thousands of businesses every month
• 17:06 \\u2013 The challenge when you serve small businesses is you that have to tweak and adjust to get the LTV-CAC ratio right
  • 17:17 \\u2013 Infusionsoft is currently at $4 LTV for a dollar CAC
  • 17:44 \\u2013 The LTV-CAC ratio is the number that every SaaS business has to manage well
• 18:15 \\u2013 It\\u2019s better to look at your revenue in unit churn
  • 18:42 \\u2013 The upfront fee was the number one factor for Infusionsoft\\u2019s churn moving from 8% to 2%
• 21:05 \\u2013 The Famous Five

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3 Key Points:

1. When you serve small businesses, make sure you have the RIGHT target customers and be committed to helping your customers.
2. Going public requires a deep understanding of how adaptable you can be in an ever changing market.
3. The LTV-CAC ratio is the number that every SaaS business has to manage well\\u2014that\\u2019s the trick.

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Resources Mentioned:

• The Top Inbox \\u2013 The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
• Organifi \\u2013 The juice was Nathan\\u2019s life saver during his trip in Southeast Asia
• Klipfolio \\u2013 Track your business performance across all departments for FREE
• Acuity Scheduling \\u2013 Nathan uses Acuity to schedule his podcast interviews and appointments
• Host Gator\\u2013 The site Nathan uses to buy his domain names and hosting for the cheapest price possible
• Audible\\u2013 Nathan uses Audible when he\\u2019s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
• Freshbooks \\u2013 Nathan doesn\\u2019t waste time so he uses Freshbooks to send out invoices and collect his money. Get your free month NOW

Show Notes provided by Mallard Creatives