1. Business, Funding, and Leadership
Lessons from the Front Lines of
Growth at Constant Contact
Gail Goodman
CEO, Constant Contact
ggoodman@constantcontact.com
(781) 472-8150

2. Sharing the Constant Contact Story
Three Major Phases:
 Finding the Customer / Market / Solution
 Struggling with Go to Market / Repeatable Sales Model
 Driving for Market Leadership

3. Sharing the Constant Contact Story
Each Phase Presented Very Different:
 Business Challenges
 Funding and Cash Flow Challenges
 Leadership Challenges: Evolving Role of the CEO

4. 1999 – 2002: Finding the Customer / Market / Solution
Key Business Challenges:
 Who is our target customer?
 What problem are we solving for the them?
 Can we make $$$ at $35 a month?

5. 1999 – 2002: Finding the Customer / Market / Solution
Funding and Cash Flow
 Raised $10m in May 2000 ~ $27m post-money valuation
 Hired up to 50 employees
 Got a great space (ping pong, air hockey, etc.)
 Spent the cash
 Needed more money in 2001!
 Small inside round – learned about anti-dilution
 Needed an outside round in November 2002
 Complete cram-down recap – UGLY!!!
 Revenue run rate =$2m, pre money of $2.5m

7. 1999 – 2002: Finding the Customer / Market / Solution
Role of the CEO
Eye on the customer / market / product
 Need to believe in the business deep in your gut
 Firm hand on the tiller – make directional changes but don’t swamp
the ship
Build the team
 Find and motivate great people
 Keep tight alignment – strategy to daily priorities
Manage the investors
 Great communication at the right level
 Do not let them drive
Do whatever is needed

8. Business Scorecard – October 2001 and 2002
October 2001 October 2002
New Customers per Month = 100 550
Cumulative Customers = 1,200 6,000
Monthly Run Rate = $42,000 $200,000

9. 2003 – 2005: Go to Market / Repeatable Sales Model
Key Business Challenges
 Conversion: Turning touches into customers
 Barriers to customer success
 The conversion funnel
 Customer touch model
 Surviving the spam challenge
 Getting our mail delivered = new relationships / team
 Policing our customers = new technology and process
 Driving the regulatory solution = bringing the industry together

10. The Customer Funnel
Channel Partners Direct Viral
-Global -PPC -Referrals
-Business -Regional -Powered By
-Affiliate -Paid programs
Trials Website Conversion
Trial to Paying
Paying Conversion
Referrers Passionate,
Satisfied Customers

11. 2003 – 2005 Go to Market / Repeatable Sales Model
Funding and Cash Flow
 Living on the cash flow line: recurring revenue growing ~$30K a
month
 Good news
• Very predictable revenue = confidence to hire
• Tight cash = tight prioritization
 Challenges
• Valuable projects not getting funded
• Team really stretched

12. 2003 – 2005 Go to Market / Repeatable Sales Model
Role of the CEO
 Team Building / Transition
 Dramatically changing view of key skills – Marketing; call
center
 Direction setting
 Final vote on toughest trade-offs – with confidence and
empathy
 Need to move quickly on spam issues
 Getting out of the details
 Board communication

13. Business Scorecard – 2003 - 2005
October 2003 October 2005
New Customers per Month = 1,000 3,200
Cumulative Customers = 13,000 45,000
Monthly Run Rate = $400,000 $1,450,000

14. 2006 - Today: Driving for Market Leadership
Key Business Challenges
 Scaling our go-to-market formula
 How to reach small businesses and get them to try email
marketing / Constant Contact
• Testing lots of new channels
• Investing in market development
 Understanding the economics
 Revenue per customer per month
 Customer lifetime
 Cost of acquisition
 Cost to support / host a customer

15. 2006 - Today: Driving for Market Leadership
Funding and Cash Flow
 2006 revenue plan = $27m ; cash balance = $2m
 Ready to scale faster but need upfront $$
Customer Economics
$800
$600
$400
$200
$0
-$200
-$400
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10Q11Q12 Q13Q14Q15
 Final venture round – May 2006; post money > $100m

16. IPO – October 2007

17. 2006 - Today: Driving for Market Leadership
Role of the CEO
 Team Building (It never ends)
 Driving team culture down into the organization (no silos)
 Building the next level down
 Chief of Culture
 Maintaining customer focus and passion at scale
 Communications, communications
 Change Leader
 Become a multi-product company
 Growth through acquisitions
 Manage Board and Investors

18. Business Scorecard 2008
Monthly Revenue (2004 – Q2 2008)
2003 2004 2005 2006 2007
Revenue $4.5m $8.1m $14.7m $27.5m $50.5m
Y/Y Growth 131% 81% 82% 88% 83%
Q2 2007 Q2 2007 1H 2008 1H 2007
Revenue $20.7m $11.4m $38.9m $21.1m
Y/Y Growth 82% 84%
Note: monthly numbers unaudited
Please review the discussion on Page 2 of this presentation regarding the risks associated with forward-
looking statements. Do not rely on this presentation to make investment decisions. 18

19. Questions?