Bootstrapping Using Services to $40 Million: ActiveCampaign CEO Jason VandeBoom (Part 3)

Sramana Mitra: How did you tackle that change?

Jason VandeBoom: We made the decision to make the switch. This was a big change, but we did it very slowly.

Sramana Mitra: When was this?

Jason VandeBoom: Around 2012. We started offering this recurring option and we just put it in the background and then we started to slowly surface it for our existing customer base. It was really important to me that we don’t damage our brand during this process. I was committed, for years in the future, to supporting the customers and ensuring that they’re still able to run with the platform that they purchased.

By the time we switched on our website with just the SaaS option, it was no surprise to anyone. It was pretty seamless, but it took some time. If we would have just rashly switched over, it could have been better financially but we would have damaged our brand. Instead of having advocates talking about our company, we would have had people talking about their experience that wasn’t so great. Taking that little bit of extra effort in time really paid off in the end.

Sramana Mitra: How many customers are we talking about at this point?

Jason VandeBoom: At this point, we’re talking in the thousands.

Sramana Mitra: What’s the segmentation of these customers? Who were they?

Jason VandeBoom: It was all over the place in terms of verticals but we really had a strong reputation with marketing firms, web design firms, and digital ad agencies. Basically, these were companies that were helping small businesses market their company. We dealt with consultants a lot at that time.

Sramana Mitra: Once you made the change, how did these thousands of customers receive that change? How did they respond?

Jason VandeBoom: It was an education process. Immediately, people thought of it as a negative. They’re going from paying a one-time fee to paying someone monthly. Even though that monthly fee is much less, they’ll do the math and see that as being more.

We solved that problem though by trying to educate people about the value of time. It is really important to assign a value to your time. What people were doing was, they are spending a lot of time installing the software and maintaining it. They all thought of that as free when in reality, there’s no such thing as free.

Sramana Mitra: Did they understand that it was not free?

Jason VandeBoom: Yes. By doing this in a gentle manner, we were able to get people to buy into this in their own timeframe. Ultimately most of those customers moved over to our SaaS platform. We went above and beyond on helping move their data over and helping make it as seamless as possible.

Sramana Mitra: By 2013, you had the customer base move to this subscription revenue product base?

Jason VandeBoom: Yes.

This segment is part 3 in the series : Bootstrapping Using Services to $40 Million: ActiveCampaign CEO Jason VandeBoom
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