For those of you who’ve been watching, a major software company in the marketing space just launched a lawsuit, claiming a violation of a patent against a company taking over market share.
It triggered a few observations from the past 30 years in software:
QUICKBOOKS
As a teenager, I remember the first time it hit me that QuickBooks had a monopoly on the market. On one of their updates, I started seeing cracks in their armor that made me suspect they were more eager to defend their monopoly than to create a software product they were proud of.
Years later, they launched QuickBooks online, and they’ve continued their drive to move people onto the platform. When I first moved onto it, it had limited functionality, the user interface keyboard-averse, and it was slow.
This stood in stark contrast to a software project I was involved with early in my career, just as it became clear that “web apps” were the way of the future.
We had two rules:
- It needs to be a native web interface that folks loved to use
- We had to share as much code as possible with the existing product
This meant we couldn’t simply “copy and paste” the software product. We had to make changes to support the web interface, while making sure the Windows platform didn’t fail.
While I don’t know the internal decision-making or culture of Intuit, it became clear to me there were two types of software companies:
- those who build software for a money grab
- those who capture market share with superior software
CLICKFUNNELS
Fast forward quite a few years, and I found myself in the market sphere. ClickFunnels came on the scene.
Over the years of working with software, I’ve developed instincts about software. From my experience, a software’s architecture or design determines 60-80% of its quality, both in the short-term and long-term. The rest comes from skilled, experienced developers, attention to detail, and quality control. And when a project is a on a tight deadline, both areas often suffer.
When CF first came out, it felt like a “let’s get this to market as soon as possible” product. This is a fine decision, depending on the intended lifespan of your product. However, it ignores a critical fact about software, which I’ll get to later.
Early on, I saw enough issues with the page builder and their static website publishing to make me wonder about the underlying quality of their software (functionality & architecture). I’d had enough experience to know some of the challenges involved creating well-designed page builders that are a) easy for non-technical users to use, b) have the necessary features, and c) allow cost-effective feature changes & fixes.
Having said that, CF had a few genius pieces:
- building a cult-like following around funnel hacking
- making it easy to share funnels with others, inviting signups
- strong marketing on the frontend to onboard folks
- loss-aversion techniques to keep people subscribed
Nonetheless, some of my peers had concerns about it:
- CF came from a culture of “funnel hacking” (that is, reverse-engineering marketing campaigns)
- CF implicitly created a mass reservoir of marketing campaigns, with insight into what worked & what didn’t.
The only real safeguard for its users was the equivalent of G’s “Do No Evil” mantra.
Then came CF 2.0.
It was a ground-up rebuild of CF on a completely new platform, according to CF support pages. (Q: Why wasn’t it completely rebranded?)
A skilled software architect will tell you this:
It’s inordinately difficult & expensive to rebuild a software product from the ground up. It’s fun, it’s exciting, but it comes at a cost.
By the time CF released 2.0, they had spent years refining and fixing all the little glitches and issues in CF Classic. I’m sure their developers were tired of making these fixes.
The trouble is, with fixes like these, you can spend 1 day (or more!) to make a minor 1-line change to fix major issues for specific situations. And it’s impossible to take these fixes into account.
Furthermore, it’s almost certain that CF changed the underlying structure of how they store pages. This makes migration imprecise, and from the window I’ve gotten, this has been a challenge for CF users.
But then, there came…
GHL
When it first came out, GHL sales were driven by affiliates, and it’s (still) priced lower than many of the alternatives. Again, a great move to build up a user base and gain adoption. It gave a great incentive for agencies to onboard their clients within GHL.
Not surprisingly, it had much of the same glitchiness of a “let’s push this out to market” product. However, they had no previous version their users were comparing them to, and users were generally more tolerant because they knew they were getting in on a beta product at a low price.
And, they managed to hit the market around the time of CF’s shift to 2.0, and got to take over part of CF’s market share over that time.
Side Note: The marketing space still needs a content-first page/funnel/site builder that allows speed of creation without sacrificing long-term maintainability. AI will help eventually…or it will make pretty but unmaintainable websites. If I had the chance to dive in an redefine this space with the right team, I 100% would…
Ironically?
CF, the company founded on the idea of “funnel hacking” and “copying”, got (partially) copied. And now they’re launching a lawsuit against GHL
This is a bit of a tell about where the digital marketing industry has come from…
From SHINY TACTICS & SHORT-TERM TOOLS
The digital marketing community has been fueled by near frictionless startups, which has also meant near frictionless demises.
Lots of startups and shutdowns.
Many of these software tools were built to meet a short timeline, and because of that, they had to sacrifice longevity. Some of these tools (not CF or GHL) were built on lifetime deals, creating an unsustainable influx of cash. Most of these are now defunct, unless they were offshoot products of successful companies.
For contrast, this is VERY different from the AWS infrastructure that was built & refined for years to support the Amazon infrastructure, then opened to the public only after having been pressure-tested in the most extreme conditions.
I think the industry is shifting, and we’re already seeing signs of…
The ONLINE BUSINESS “ERPs”
“What’s an ERP?”
Common question when I move from manufacturing or larger-scale businesses to digital marketres & online businesses. In very simple laymen’s terms, they’re the “all-encompassing, single software solution for your whole business”.
This is what GHL and CF are after. It’s new territory. And as evidenced by the lawsuit, it’s a valuable piece of territory in the digital landscape.
I believe we’ll see players enter and exit this space. (GrooveFunnels, anyone?) We’ll see a handful of them remain. They’ll compete with each other against market share.
The entrenchment with these companies is deep. It’s one thing to migrate your website. It’s another thing to migrate your entire company.
We’re going to have companies sign on with one company, then discover a critical feature that they need to have to make their business work, and need to either a) change their business model, b) jury-rig a solution, or c) migrate to a different platform.
Because of the vast feature set and social proof (plus, these are built by marketers), it’s relatively easy for folks to walk in the door. It’s incredibly difficult for folks to walk out.
And because of the entrenchment, once they’ve secured market share, they’re motivated to serve their biggest clients. However, most of their users simply need to be okay either waiting for fixes & changes, or adapting to the solution they pick.
The biggest concern is this. When you’ve got companies that:
- have been built on speed to market
- are sustained by client entrenchment
- are motivated by shareholder profits
…they are negatively motivated to make enhancements or changes. First, they don’t drive the bottom line. Second, changes are already inordinately difficult.
The additional concern is that these companies treat the data ethically. With great power, comes great temptation. (Dr. Robert Epstein stories, anyone?)
The alternative for users will be microsolutions + zapier (or custom solutions).
Which brings up one final point:
LOW-CODE & INTEGRATIONS
This will create an opportunity for low-code & integrations for companies who aren’t ready to get into the all-encompassing software solutions. One particular gap this this:
- It’s an incredible amount of work to document low-code solutions & integrations.
This makes them difficult to maintain. And the more complex the business & the automation, the more difficult it becomes. And the more likely that tweaks create unintentional consequences.
For example: a simple shift in marketing strategy can create challenges in the automations that support a sales team’s daily process. (True story, from yesterday).
(Yep – I’ve got a solution for someone who cares. I just don’t care /enough/ to pursue it on my own.)
CONCLUSION
Online businesses are maturing. I believe we’re seeing the shifts in the industry that happen as this evolves.
The people who’ve been willing to invest in a long-term business with built-in moats that can adapt through ongoing change? Good on them!
The ones who’ve been living by the “copy and paste” culture within parts of the online world? At some point, it’ll become too complicated, too complex, and too expensive to copy and paste. They’ll have to jump ship to other opportunities where they can pick off opportunities to replicate.
Bottom feeders exist everywhere.
Just don’t be one.
And don’t be a feeding ground for them.
That’s it for now.
Happy Wednesday!
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