How to Innovate in a Hypersocial World: Q&A with Gail Goodman, CEO of Constant Contact

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their customer e-mail addresses, and [data on what’s been sent, opened, and clicked through]—about a petabyte of data. We help customers find co-marketing partners around them. We did a map of Acton, MA, and listed the overlap of our customers. So if customer A and B have 20 percent overlap, they can co-market together. How do we use that data pragmatically, what could we do to make that happen for them?

We also put small companies in the mix. We encourage all executives to mentor smaller businesses. That’s how you stay fresh.

X: So are you still on the board of HubSpot, which seems to be becoming more of a competitor with Constant Contact these days?

GG: We are drifting a little closer, and Brian [Halligan, HubSpot’s CEO] and I are aware of that. It might lead to us needing to part ways. The conversation is active.

X: Talk about the biggest challenges you’re facing with Constant Contact.

GG: There are lot of twists and turns in our story. 2005 was a big inflection point for us. In 2007, when we went public, that put rocket fuel behind the engine. Then we’ve been very high-growth. But our end market, the small business, has been badly hit by the recession. Main Street hasn’t felt the end of the recession. We’ll grow roughly 25 percent this year, but for us that’s a disappointing number, given the size of our addressable market. The last two years has been challenging for us as a mature company, but it’s not tragic.

X: What’s unique about your company culture?

GG: One of the things that makes this company special is we have a “no asshole” hiring policy. Our employees are very results-oriented and very driven, but they do that with a respectful style, and laughter is the name of the game here. You know you’re one of the team here when people starting ribbing you.

We did a senior management team meeting, and one of the icebreakers was to talk about your siblings. We have a lot of last-borns, so you take a lot of ribbing [growing up] as the youngest of four, or youngest of two. It’s not a hiring criteria, it just turned out that way. How does that shape our culture? We all give each other a hard time, and we know how to take it.

It’s super hard to hire good people. Our best weapon is our employees.

X: So what are the most important lessons you’ve learned over the past decade?

GG: I think probably the biggest leadership lesson, as we’ve grown the company, is the focus on hiring great people. And making sure they know what you do and why you do it. Not to constrain ideas, but to give context to innovate in them. Startups, in their hunt for repeatable models, sometimes get all over the place.

We were tempted to go up-market [for example]. But we said no, we’re shaping everything around this customer [small businesses] and this customer market. As we grow, the challenge for us is to really make sure we’re following that customer as they grow and change—not because we talked to them two years ago. So we have to move in advance of our customer, but not too far in advance.

The second thing is, in this hypersocial world, it’s all about customer experience. You have to design your business from the customer inward and make sure you know what your customer experience is. The social viral impact of great customer impact is extraordinary. And the inverse is true. I wouldn’t make a major purchase today without reaching out to my social network. If you’re not treating your customer extraordinarily well, you will definitely hear it.

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Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and Editor of Xconomy Boston. E-mail him at gthuang [at] Follow @gthuang

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