‘How I Work’ Ep 9 with Chip House

Josh Becerra: Hi, everybody, this is Josh Becerra from Augurian. This is episode nine of How I Work. I’m here with the CMO of SharpSpring, Chip House. Thanks for being here, Chip.

Chip House: Thanks for having me, Josh. Super pumped to be here.

Josh: Yes, this is awesome. Before we get into SharpSpring and some martech and other things like that, you have an amazing story, going all the way back to the catalog days of Fingerhut. So, I’d love to hear about some of those early experiences, where you worked and what you picked up a little bit along the way.

Chip: Thanks for the question and thanks again for having me on. When you think about the late ’80s, when I was leaving college, catalog marketing was still booming like crazy. Fingerhut Corporation here in town was a couple billion dollar company, with 4 million loyal customers around the country. Consumer credit was harder to get and there weren’t as many Walmarts in small town. So, there are all sorts of reasons why Fingerhut was just killing it still back in those days. It was still pre-internet, if you think about it, but it was an amazing place to start as a marketer, because they knew their customers so well and it was a highly analytically-driven organization.

I showed up and I had a 10 key on my desk and I crunched product-level break-even analysis and shared an IBM 80 with 10 other people, and ended up moving through that organization, just learning a ton about targeted marketing and how to think about the money you’re spending when you’re targeting audiences and being really cognizant of how you select your audiences for best response, number one, but also, so you just didn’t burn a bunch of money. The other thing I think I’d learned a lot was just the value of testing. We tested like crazy, everything we did, from the wraps on the catalogs, to the incentives, to the involvement.

We did scratch and sniffs back at those days, all sorts of crazy stuff, but it was a great place to cut my teeth. I got into digital in ’95 there and I’ve never looked back from digital, but I’m really glad that I said, “Hey, this web thing is happening and I’d love to be a part of it.”

Josh: From there, where did you go, then?

Chip: Digital River. I had stayed at Fingerhut for nine years, which was much longer than I thought I ever would stay, but Digital River–

Josh: It must have been a good gig.

Chip: What’s that?

Josh: It must have been a good gig. That’s why you stay. You’re learning a lot.

Chip: Yes, smart, cool people there. Those people have scattered around the Twin Cities, I’m sure, some former Fingerhuters yourself. I think a lot of them ended up going the Digital River route. I found the Digital River opportunity in the Star Tribune newspaper, if you think about looking through the job section. I saw that they were hiring for a senior marketing manager and there just weren’t that many people in town. Honestly, I will say, the reason I got the job is I was one of the few people who raised my hand in the first place, but also there weren’t that many people that had e-commerce experience.

I met with Joel Ronning, the CEO, and became the first marketer at Digital River. We were mostly all kids there, if you think about it.

Josh: The wild days.

Chip: It was the wild days, and we were all learning and figuring it out, but the great thing about Digital River is my direct market experience mattered. I knew what a report should look like, I knew that campaign tracking was really going to be important for everything that we did. We were able to build that into our platform in the early days. We ended up, because we took a percentage of everything that our customers sold via the platform, it was in our best interest to help them sell.

I ended up hiring a team of people, which really became the services team. I ended up leading the account development managers there at Digital River, and we were responsible for helping improve websites and doing promotions, email promotions, or banner ads on behalf of our customers. We would figure that out, how the money had to work, but again, we were basically sending emails for them for free because we reap the benefits on the back end when they sold one.

Josh: Yes. I think it’s just amazing to hear about, when we think about Digital River today, and how big it is, and just the depth and breadth of services, and the reach it has, and all these things, and for you to be there on the ground floor, I think that’s really cool. It’s a platform that has evolved over the ages. I was looking at the Chiefmartec landscape, the thing that they produce that shows like all the different MarTech options that are out there for marketing execs. In 2011, there was 150 different logos on that, and today in 2020, they had 8,000 logos. It’s like crazy, crazy growth. I think it’s great for marketers because they have a ton of tools at their disposal, but I also think it’s overwhelming for marketers. Since you’ve had– Now you’re at SharpSpring, which is also a platform, and we’ll get into that, but you’ve been with the platforms growing over the years. What are your thoughts about how this is expanding, and what’s what’s the best way for marketers to make sense of this ridiculous landscape of MarTech?

Chip: It exploded in the early 2000s. For some reason, every year this slide, I’ve seen it used in presentations. I used it myself in a presentation probably in 2011. Maybe it was the Minnesota Interactive Marketing Association, or something. That was one of the speeches that I’d done, but there’s a huge opportunity in SaaS, and for such a long period of time– Going back to Digital River, I had to go bribe my tech people to send emails via Unixmail. In the early 2000s there wasn’t anything for awesome SaaS software for marketers.

It did explode, and it’s a huge space, and because it’s marketing technology focused at making money, I think that’s why there’s been lots of room. Also, in the past 20 years, I’m not telling any secrets when I say, there’s obviously been the move towards cloud suites. That’s what all of the major providers, Salesforce, Adobe, Oracle. Everybody’s got their cloud, and with that, even though all of that roll-up has happened, all these point solutions have continued to, many of them, profit. I really wonder when I look at 8,000 here, are they all still in business, or are some of them just former startups, or are they startups that have made it 100–?

Josh: Or, just a founder team that has a handful of clients.

Chip: Yes, and they’re now at 100K ARR or something, but nonetheless, it’s pervasive. I think what we’re seeing at SharpSpring is we definitely think there’s a difference in having a MarTech point solution solve a problem versus having a platform. We think of ours as a revenue growth platform because we’re able to enable companies to manage the whole of their customer lifecycle on the platform. From the first time a lead sees an ad, to the time they come into your platform, into your CRM. Then, you manage them throughout the life of the lead, at multiple touch points, and score them, and nurture them to become customers, and then loyal advocates over time. You can’t do that kind of thing with a point solution, and you certainly can’t do it unless you’re leveraging heavily APIs and things like that.

Josh: I dug around. Those logos are like microscopic now, because there’s 8,000 of them. Luckily, they have a feature where you can filter. I did some searching, and I did find SharpSpring. They have you in the content and experience category, with like 1,900 other companies, and then there’s the similar category of marketing automation, campaign lead management, and there’s 325 other companies in there. Do you feel like they got it right? Or, besides marketing automation campaign and lead management, what else is SharpSpring bringing as a platform?

Chip: I’m trying to wrap my brain a little bit around the content and experience category that they have us in. I don’t think I would describe it that way. Agencies especially, and small businesses, many of them run their business on SharpSpring. Meaning, all marketing activities, all sales. So, we’re trying to be very different. If you go get a CRM, it doesn’t do anything per se, other than store people, maybe it helps you manage your pipeline a little bit.

You will get a point solution for social. It’s sort of standalone where you’re engaging with people, you might be doing social listening and engaging, but it’s not backed by a CRM, it’s connected to the lifecycle of that lead that you’re trying to engage with all of your marketing activities through no matter what channel and with your sales team as well.

Josh: The whole time like Mailchimp for your email, and it’s like you guys do all of that combined. You don’t need to bolt on the email client and things like that?

Chip: Exactly, whether it’s a chat bot for your site or a landing page that’s optimized with our forms which are progressively profiled, because they are tied into the CRM and they capture the lead in, and then trigger off automated sets of nurture campaigns, then connected to our SharpSpring ads for retargeting if they haven’t converted yet, to still create awareness throughout the lifecycle. Then, maybe they score high enough to be then passed to our sales team. Then, our sales team, it comes into a sales optimizer, which gives them a set of tasks for how often they should follow up via email or phone call, actually, it empowers them with some smart mails, which are actually emails that they can send but they’re created by marketing, sent via IMAP. Anyway, it’s hard to describe it without getting a little down into the feature level, but it indicates what’s different about it.

Josh: I just think for a small-medium size business, to be able to just have one tool that they can go into and start to really become familiar with and they can start to grow within that tool and that everything is available, so they don’t have to be getting all these one-point solutions and three different logins. Then, does this integrate through API or not? All that stuff is just a headache. I think you guys are really on it and solving key problems, especially for a certain size business. With all these other tools in the MarTech landscape, you guys are embedded pretty heavily in there. Are you seeing consolidation or acquisitions? Do you think some of these major enterprise people are in the business of buying versus building? Or, do you think it’s just going to continue to be super fragmented?

Chip: It feels like the acquisitions and consolidations have never slowed down in SaaS. Any SaaS company of size has an M&A team who’s out looking and assessing and things like that. Obviously, I don’t have any news or anything, but that still exists out there. So, I would expect more consolidation over time. It’s why many of those point solutions get into the game in the first place. Their whole business model is built on, “What’s your exit strategy?”. One of the optional exit strategies is they get acquired by a bigger SaaS company who’s doing some sort of roll-up. I don’t know if it’s frothy or not, with the market and COVID and things like that, but it’s certainly still there.

Josh: Yes, for sure. You mentioned COVID. I think you were brought in at SharpSpring kind of around the time when COVID started getting frothy, unfortunately. How, if at all, do you think the pandemic has impacted SharpSpring and your business?

Chip: I joined in May, which was a little more than 60 days after we all went into lockdown in middle of March. My impression of it looking backward was there’s the initial panic, and then some of the realization was setting in for many people that, “Hey, I still have customers that still need my help if I’m an agency. I’m still an SMB. I have things to sell online, or I still have a sales team to support with my marketing activities.” With that said, I think there have been winners and losers.

We did this agency acceleration series this fall where we had a number of agency influencers and broader digital marketing influencers. When I think about the macro names, we have, like Rand Fishkin or Seth Godin or Ann Handley, but then we also had people like Drew McLellan and David C. Baker who are very much focused on helping agencies become more effective and more targeted, and not be the cobbler’s kids and really lean into their own branding and messaging and do the work to find what their specific niche is.

I think there’s definitely agencies that have done that well, that have found really what their niche is and have decided, “We’re going to say a no to all these things that we don’t do well. We’re going to really specialize here.” Those ones, I would say, have done well, unless maybe their only customers may be United Airlines or something [chuckles].

Josh: Never ideal as an agency to have 90% of your revenue tied up in one customer.

Chip: Yes, exactly. I think there’s been some of that, but we still see plenty of interest from our main targets.

Josh: That’s great. You have a great track record in SaaS businesses and in growing companies, so what excites you? What are you looking at doing new or leaning into in 2021 here?

Chip: I guess there’s a couple of things. What’s old is new, right? We started testing some direct mail again. Historically, SharpSpring has done some direct mail. It’s from my past, certainly and obviously. When I was at ExactTarget, we used direct mail fairly carefully. We would only use it for our largest enterprise prospects probably. We wouldn’t use it for everybody because we are targeting a very broad set there, but with the pandemic, we’re wondering, “Are people at home, or are they at work? What’s direct mail going to look like?” It dipped our toe in the water, thinking that, especially with some of the agencies that we’re trying to work with, there’s always somebody going to the office.

Josh: Yes, got to pick up the check.

Chip: Yes, got to go to pick up the check [chuckles] or manage payroll or whatever. It’s been promising, our initial response to that, and which excites me to be able to lean in and create some high-touch dialogue with prospects and customers, frankly. That’s multi-channel now, also in the physical realm. It seems more differentiating now because the digital noise is, I would say, more heightened even in the past 12 months. It’s some of those account-based strategies like that where we’re partnering closely with the selling team.

Josh: Well, that wasn’t necessarily the answer I was expecting, but I do think that that’s a really cool spin on thinking about the pandemic and people’s actual behavior and how gratifying it kind of is to get a physical piece of mail. People are probably paying a little more attention to those things today than they have in the past when they’ve been in the office and a stack of mail gets stuck on their desk, versus today where they might just go into the office to grab the mail and bring it home. Now, they have more at their leisure time to digest some of those things, so I think it’s really cool.

Chip: That’s cool. It’s so much about standing out. How do you differentiate yourself from the noise? Now, that’s sort of emerging as one way and maybe that’ll go away over time. I don’t know if you’ve heard of a company called Lessonly, Josh?

Josh: No.

Chip: They’re a SaaS company in LMS. I know the CMO there, Kyle Lacy, used to work with them at ExactTarget years ago, but direct mail is solid for them, and they have this mascot that’s a llama. They ship out golden llamas for people. I heard stories of the marketing team up at night spray-painting llamas so they could mail them out. I think it’s more of a trend. The other thing I’m excited about and I touched on this earlier, but before I joined, we had acquired a company called Perfect Audience, which does ad retargeting, and that’s now being incorporated into our platform as SharpSpring ads. If you think about the power of that within a platform, tied to your CRM, tied to your selling list to be able to target people and individuals, and maybe even be able to retarget them with a picture of their sales rep that they’ve talked to. That multi-channel targeting is really interesting, now adding in ad retargeting.

Josh: You can send them a postcard with the ad rep’s picture, too.

[laughter]

Chip: Yes. You definitely could.

Josh: Very cool. You don’t get role after role as the CMO in company after company without knowing a little bit about building teams and leading teams. My last question really is, you’ve had depth and breadth of experience. So, any words of advice for other SaaS leaders, because that’s who’s going to be watching this? For those who are building and leading teams, what words of advice might you have?

Chip: I think the first thing I would say is, choose carefully, because the team that you have is just so critical to your success, and really take the time to do it. In my own career, I have made bad hires and it just creates such a problem, mostly a time suck for you because you can’t be as efficient and effective as you want to, because you’re dealing with an HR situation. I think the second thing, we learned early on that you should hire for talent, meaning at ExactTarget, we hired smart people, smart young people who are not digital marketers, but you could teach them how to digital market because they were smart, they’re curious, they could run a spreadsheet like nobody’s business and pivot tables. That’s another tactic.

I think the third thing is really, don’t try to do it all yourself as a leader. When I think about the most effective teams we had, they are A players, that I am just feel like I’m supporting as a servant leader, and pointing and realigning where they’re heading and together setting goals and strategies and things like that, but you need to know the details as a leader, and then you need to find people that can crush them better than you ever could. Hire people better than yourselves and get out of the way.

Josh: Yes. That is the old adage of always have people who are smarter than you working for you. It’s easy for me to do, maybe not so easy for you, but I think it’s great– Curiosity is one attribute that I also believe is a key attribute for any good hire, because the way that this space works and moves, you need people who want to be on the edges and want to be trying new things, because that’s where the biggest opportunity lies. Awesome. This has been great, Chip. I really appreciate it. Thanks so much for accepting to be a guest on How I Work. We’ll just say goodbye for now.

Chip: Josh, I appreciate it. I had a fun time. See you.