On Friday, November 4, 2016, Arizona Sen. John McCain and former Massachusetts Gov. Mitt Romney held a forum with Infusionsoft CEO Clate Mask at Infusionsoft’s headquarters.* Organized by McCain’s office during his re-election campaign, the forum’s focus was on small business growth and policies that enable that growth.
Romney talked about raising wages and strengthening the economy through helping small businesses succeed and what venture capital firms examine when considering making an investment in a company. McCain discussed the Affordable Care Act, the American spirit of entrepreneurship, and providing opportunities to veterans. Mask encouraged politicians to consider small business growth a matter of national security and shared the policies he thinks place more challenges on small businesses.
And of course, McCain and Romney discussed the presidential election and their thoughts on how our next president should work with Congress and the American people.
Mentioned in this episode:
“Conquer the Chaos” by Clate Mask and Scott Martineau
*This event and podcast episode are not a political endorsement from Infusionsoft. We welcome any policy maker of any political persuasion to visit Infusionsoft to discuss small business growth.
Dusey: Hello, listeners out there. I am Dusey Van Dusen, and I am the technical producer for the Small Business Success podcast. I'm talking to you because we have a very different format today. I think we have a very special episode for you today, as well. We were approached to hold the panel discussion featuring Senator John McCain, former governor Mitt Romney, and Infusionsoft CEO Clate Mask. We thought it would be a great opportunity to highlight and champion the needs of small businesses everywhere.
Now, you're gonna hear some political points of view, for sure. This is not a political or partisan endorsement from Infusionsoft, however. In fact, we would love to talk to any policymakers who can help small businesses grow. The event was moderated by Glenn Hamer, president and CEO of the Arizona Chamber of Commerce and Industry. The video is available on our Facebook page at Facebook.com/infusionsoft.
For those of you who are dying to hear the final installment about reengaging your leads, don't worry –
it's coming next week, followed by some more great episodes, including an interview with Pam Slim, who's the author of Escape from Cubical Nation. But for now, on with the show.
Glenn Hamer: Good morning, everyone. I want to first thank Infusionsoft for making this incredible space available today. My name is Glenn Hamer, I'm president and CEO of the Arizona Chamber of Commerce and Industry. It's a privilege to have a chance to be here with three great Americans.
To kick off the program, we're gonna dive right into it, it's my privilege to introduce our host. Obviously, first of all, what a great privilege to have one of the greatest Americans today, Mitt Romney, with us today. Let's give Governor Romney a special...
We'll introduce our great senator, Senator McCain, in a moment. I want to thank one of our great Arizona entrepreneurs, Clate Mask, for making Infusionsoft available today. A couple quick words before I'm going to kick it off to Clate.
This is a great Arizona homegrown story. This company has been recognized as one of the top 100 businesses by Ernst & Young. He has been recognized by Goldman Sachs. Closer to home, Clate Mask and Infusionsoft won a very prestigious awards from the Arizona Technology Council. I would urge you all to listen to a recent podcast from Jason Isaak of Arizona Originals with Clate Mask about how he grew this business. He's also the author of a terrific book that has one of the great aims out there.
It's basically Controlling the Chaos: How to Grow a Successful Small Business Without Going Crazy. With that, I'm going to turn it over to Clate Mask.
Clate Mask: Thank you, Glenn. We are really excited to host this great event. At Infusionsoft, we love helping small businesses succeed, and we know that small business growth is the lifeblood of a strong economy. It's what we do every day. So for us, it's just a pleasure to be able to talk about economic vitality and small business growth. We appreciate you being here and monitoring.
We are so pleased to have Senator McCain and Governor Romney here with us. We're glad that you're all here, joining us.
It wouldn't be very fair if I didn't give a shout out to the over 600 Infusionsoft employees who are the real heroes, helping small businesses grow. So, hats off to all of them.
Glenn Hamer: Thank you, Clate. Now, it's my great privilege to introduce the man who I consider to be the most consequential legislator on Planet Earth. An American hero, Senator John McCain.
John McCain: Thank you. Thank you, Glenn. Thank you, Glenn. Clate, thank you for inviting us here today into this great American success story. This is what America is all about. This is the opportunity that we have, frankly, only in America.
In these rather bleak times, when we're trying to make America great again –
that's a joke – this is what, I think, is so inspirational and makes us proud to be Americans. From an idea and a thought and a team, that you have built one of the most admired companies in the world. What you do is help other people do the same thing that you did: small businesses.
Small business, we all know, is the backbone of America's economy. Small business is 97 percent of all employers in the United States. Obviously, access to capital, education and workforce development, tax policies, red tape and, frankly, health care, which maybe we'll talk a little bit about later on –
your challenges with Obamacare, which unfortunately, Arizona seems to be the poster child for the failure of – I'll be polite – the Affordable Care Act, or the Unaffordable Care Act, depending on what you call it.
So, I'm looking forward to the conversation, but I'm also really honored to be here because as a representative of the state of Arizona. this is one of the reasons why I've been so proud to represent Arizona, because of the entrepreneurship and the opportunity that you have given so many hundreds of employees, but more importantly, given small businesses all around the world the opportunity to better their businesses and lives because of the information and training and knowledge that you impart on them.
Could I also say that I'm very honored to have Governor Mitt Romney with me today. We are old friends, and sometimes enemies. By the way, I don't know if you've ever heard this story. Mitt is given to tell an anecdote or two. I don't know if you ever heard this story of the two inmates in the chow line in the state prison. One of them turned to the other and said, "The food was a lot better in here when you were governor."
With that, I'd like to introduce my friend, Governor Mitt Romney.
Mitt Romney: Well, that's a heck of an introduction, isn't it? My goodness gracious. I'm reminded of your presidential campaign, not to mention mine. I just said yesterday, when we were together, I reminded the senator of that old line that was given by Fritz Mondale –
who had the misfortune of running against Ronald Reagan. He said, "You know, all my life I'd wanted to run for president in the worst way. And that's just what I did."
Clate, it's an honor to be here at this enterprise today. I would not have imagined that you could build a business of this scale with the model you've created and yet, look. It's growing and thriving and making a difference for businesses all over America and all over the world. It underscores something which Marc Andreessen, of a famous venture capital firm, Andreessen Horowitz, said.
He said, "Software eats everything. Software eats everything." By that, he meant that software, the application of intelligence into something which can be repeatable and sold to people, that that will change every business in the world. Of course, we recognize yes, it's gonna change the taxi industry with things like Uber, but it's also gonna change very small businesses, startups of all kinds –
and make them more effective and more efficient, and make those businesses more successful.
Now, I think it's important to underscore why that's such a good thing. The reason I'm conservative, and the reason that I believe it's so important to be conservative, is that the only model I know of that can lift people from poverty and help people in the middle class become more prosperous is the free enterprise system. Conservative principles work.
When we talk about business, we're here saying, "Gee, it's a good thing to help small business and to make them more productive, and congratulations on what you've done here." Clate's just fine, whether this business succeeds or not. But there are thousands and thousands, hundreds of thousands of other businesses that need that expertise to grow and thrive.
The only way you can get real wages to go up for the American worker and the American family is if more businesses are successful –
and therefore, they have to hire more people. To hire more people, they've got to compete with each other and raise wages, raise salaries in order to attract the best people. That's how wages go up. That's the only way real wages are gonna increase.
So, when we conservatives talk about business, when we talk about making business successful, it's not just to make sure that Clate is successful or the venture capitalists are successful. No. It's to make sure that the many, many families that want to see rising wages and good jobs, they have opportunity. That's what it's all about. Sometimes, our friends across the aisle – we respect them, of course, and they want the same things; they want higher wages for folks – they don't understand, the only way to do that is to help businesses be more successful. That's what you're doing.
There are a lot of businesses that I applaud, but this one I applaud in two ways.
You're successful yourself for your own team, but you're also making other small businesses successful for their teams and lifting a lot of people. I congratulate you on that, and look forward to reading more and more about what you're accomplishing because as the senator said, small business entrepreneurs, that's the backbone of how our economy works.
Again, when we say economy, we're saying that's how the American people work. That's how wages go up. We want to see a growing, strong economy not because we care about some GDP number in and of itself, but because a strong GDP number means strong wage growth and income growth.
I love this country; I love the principles that our founders came up with. I think this play on Broadway called Hamilton – I'm sure some of you have listened to it or maybe even gone to New York and seen it – this guy, Alexander Hamilton, he had this idea to take what Adam Smith was talking about, and bringing it to America and making our markets work. Why?
Not to make bankers rich, but to make the American people rich.
I applaud what you all are doing, and hope that you're gonna be more and more successful in bringing more small businesses to the front. Thanks, you guys. Good to be with you today.
Glenn Hamer: Thank you for those comments, Governor Romney.
John McCain: I think you can see why Bain Capital was the success that it was – seriously – with what Mitt just had to say.
Glenn Hamer: We certainly agree with those comments on the free enterprise system. Let's jump right into it. Clate, my first question is for you. Your software is just terrific in terms of helping small businesses with their marketing software. So many companies in Arizona use it, and it's just – a number of companies in this room.
But I'd like to talk a little bit – you were once very small and now you're rocketing up.
I'd love for you to talk about your challenges as a small business. Let me just say, I love how you have the pennants up here, celebrating your continued success. So Clate, some of the challenges.
Clate Mask: Yeah. I think all small businesses face the challenge of getting more customers so they can grow their business. If they can grow sales, then they can hire people, they can increase wages. But getting customers is where it all starts. It starts for the business owner: how do I get my wages up? Well, I sell. I sell my products and services to customers who need them, for whom I solve a problem.
We were just like all other small businesses, myself and two co-founders. The three of us were trying to make things work. What we were doing is, we were actually doing custom software. We were trading hours for dollars, trying to create custom software for small businesses. This was back in 2001, 2002.
The challenges that we faced all had to do with sales and marketing –
with access to capital. How could we make the investments that we needed to make, whether it was a simple thing like the office space that was necessary for us because we were driving our families crazy, trying to run it out of the house, or whether it was being able to hire another employee. Then, the last thing is, access to labor. Getting the right people on board.
Sales and marketing, having the capital you need, and labor, those are common small business problems. They certainly plagued us. We spent about three years just trying to grind it out, figure out how we could make things work. It was a three-year white-knuckle daily fight for survival to make it work.
Glenn Hamer: I'm glad that you got through that turbulence. I just also want to say, for those who haven't attended, the ICON Conference that you hold in April is just a terrific opportunity for small businesses to learn, on a number of fronts, what they need to do to grow.
Clate Mask: Yeah, we have thousands of small businesses that come every year.
I love it because it's in the Phoenix Convention Center, so we get to show off Arizona. We have businesses that come from all over the world. It's a great event that helps small businesses learn and understand how they can do a better job in their sales and marketing so that they can grow their business.
Glenn Hamer: My next question is for Governor Romney. As co-founder of Bain Capital, you know a thing or two about successful businesses. What are some of the things that you look at in terms of when you're investing, looking to invest, in different business enterprises?
Mitt Romney: You may find this an unusual thing to consider, but the most important thing we would consider as a venture capital investor was the character and integrity of the leadership. Because we have found, through sad experience, that even though there are occasions where an idea or a business sounds very exciting, if the people leading it have less than the kind of character you'd want to associate with, you're gonna find yourself unhappy.
They're gonna change the rules along the way. They're gonna get themselves in trouble, perhaps. In some respects, even if it's successful, life is too short to hang out with people that you don't respect. So, that was first for us.
We also looked at people's track records. I've done a lot of interviewing. I used to be in charge of recruiting for a firm I worked with before Bain Capital. I'd interview people in business school. You know what? I found that the interview was kind of important, but more important was their track record. The things they've done, the references of other people. Experience makes a huge difference. So, when we would look at a company, we'd look at the character of the founders and then the kind of experience they'd had.
Now, it doesn't mean that their experience is always up, up, up. The founder of Staples, the office superstore, had been fired by his two prior employers. I spoke to them at length as to why in the world they'd fired him.
They just said, "He was just like a bull in a china shop. All these new ideas, couldn't slow down. He was driving everybody crazy." I said, "That's just what we want to hire."
So, it starts with the folks that are founding an enterprise. I think that's one of the reasons why it's so important to select the people who represent our country and represent you as people of honor and integrity, and people with the kind of experience they can draw on to help make important decisions. That's why I believe it's so critical that the people of Arizona elect John McCain to the U.S. Senate. He is just that kind of man.
John McCain: Thank you, Mitt. Could I just add on one point? I believe in America. I believe the world's on fire right now, and I believe that there's a failure of leadership that has led to unbelievable tragedies, which we won't talk about.
Six million refugees, 400,000 people killed, and all of the things that are happening around the world which are not good for America. But I wouldn't bet against America because when I'm here, there's no place like this in the world, Clate. There is no place in the world where you can find the entrepreneurship, the success story, that is embodied right here.
I would also like to point out that this device here is not invented in China, it's not invented in Russia, it's here in the United States. Now, every six months, Cindy makes me buy a new one and I don't understand the last one. Some of it may be manufactured someplace else, but this company and this success story, I don't think could be repeated anywhere else on earth. That's one reason why we were so pleased to have the opportunity to come here because sometimes we're a little bit bleak in our prospects.
In eight years, this is the slowest growth in GDP since the end of the Great Depression. I know we're gonna get, later on, into conversation about government regulations and its impact, but I still believe that – by the way, if you've ever been to China, as we have been, there are some days in China where you can't see one block because of the air pollution. For a long time, they had a one-child policy? They're gonna have an aging challenge that's –
Would you like to be Russia? Vladimir Putin's running a gas station masquerading as a country. By the way, I was sanctioned by Vladimir Putin. Cindy and I could not go to Siberia again this summer for our vacation.
I think we have to talk a lot about the challenges because, again, a lot of it has to do with the role of government in our society and our economy. But at the same time, this is the kind of inspiration that I think is so important to all of us as Americans.
Glenn Hamer: With those comments about Russia, please secure your servers. We'll get to regulations in a moment, but I wanted to first just point out, we talk about job creation and keeping the world safe. It's so incredibly important that the next president have your counsel. So, we need you to remain as the chair of the Senate Arms Services. I'd point out, being in the East Valley, just your expertise in that area all across the state, protecting the A-10. We've got Boeing, Honeywell, Raytheon, great companies that keep the country safe.
But your role has been instrumental.
John McCain: Thank you. I'd just like to mention, it's not just Raytheon and Boeing and Sargent Controls and all of the other defense industries and subcontractors, but we also have our major bases at Luke, at Davis-Monthan, Marine Corps Air Station in Yuma, the Yuma Proving Grounds.
This brings me to our subject of veterans and employees, that Mitt was talking about finding good people. I'm proud of you, and I'm proud of Arizona, that we make such a great effort to hire our veterans. In fact, maybe our veterans in the audience could raise their hands for me, so we can say thank you.
The fact, Clate, that you've gone so far out of your way to try to provide opportunities for our veterans is something that I know you are very proud of. I thank you.
Clate Mask: We've got one of our favorite Infusionsoft employees that's coming back from Afghanistan next month. He'll be back working with us again. He's already back.
Audience Member: Yes, back!
John McCain: Welcome home.
Glenn Hamer: Governor, from your life in the private sector, I'm curious what lessons you brought from the private sector into your government service. We have a governor here, Governor Ducey, who's doing a phenomenal job. Senator McCain mentioned the change of the iPhones, and I'm with you. Every six months, I have to change it; I never quite know what to do. We've got a nice, very big Apple facility here –
so we've been making a lot of progress with the governor, who's been bringing his business acumen into public service. But, I'd be interested in the lesson you learned, translating private sector success into great success as a governor.
Mitt Romney: Well, as you mentioned, these iPhones, I have to remind you all what it's like when your iPhone says it's time to update your software and I go, "Oh no, please no. No, no. I've finally figured out how to make this thing work, and now you want to change it again." Worst day of the month when that happens.
I can tell you that it's not as big a leap as you might imagine, going from the private sector into the public sector. As a matter of fact, it's a phenomenal experience. If you get the chance to run for president, do it for sure. It's really...
But actually, people think that if you're the Chief Executive Officer, that you just command and everybody does what you tell them to do. That's not how it works.
He's got bosses, he's got investors, he's got bankers, he's got a board of directors. By the way, employees. You may not think you're his boss, but if you're not happy and you start leaving, he's in trouble. The enterprise is in trouble. He has many people he has to respond to and work with and to collaborate with. That's the same thing in the public sector, when it's being done properly.
We have, in the public sector, some people who think they can be like bosses; they can be CEOs and just tell everybody what to do. That's not the way the Constitution was written. That's not the way our country works. We have checks and balances. To make things get done in America, you have to be willing to work with people across the aisle. It's the only way things get done.
That's why Senator McCain has been so successful. He's one of the few left that seems to have the capacity to stand by principle –
to have integrity with those principles, and the things he does, and the way he lives, but then also to find common ground with people on the other side of the aisle. That's the only way we'll deal with the big challenges we have.
Those are the kinds of lessons I learned in the private sector, and they apply in the public sector. The people who are successful in one tend to be more successful in the other.
Glenn Hamer: Thank you, Governor. I want to also point out, we have a great business person, our state legislator, Bob Worsley, who's here with us today. Thank you, Senator.
Clate, just to drill down a little bit. Then, I would love to have Senator McCain's views because he has been a great leader in Washington in fighting over-regulation on the federal level. I would love to hear your thoughts on anything state, local or federal that you find challenging in terms of existing governmental policy that should be improved.
Clate Mask: Yeah, I'm happy to comment on that. I want to preface it with the sentiment that Senator McCain just shared. When we talk about challenges, we can't forget how fortunate we are, and we can't lose sight of the optimism that's critical that we maintain here. As entrepreneurs and as small business owners, you're nothing without optimism. You've got to have that optimism. It's the reason that it's the middle value of our nine values. We face challenges with optimism.
Yeah, I'll talk about the challenges, but I sure appreciate the comment that we are so fortunate, and we have good reason to believe and have excitement for the future in entrepreneurship in America. So yes, we have challenges. I'll talk about a couple of those things.
For small businesses, there are a couple of things that are just really tough in what we've got to navigate. One of those is regulation: in particular, the challenges that it is on a local level to get the –
whether it's something as basic as a permit or something much more significant. Getting through all of the regulation is a daunting challenge for small businesses.
I would say generally, we tend to have a lot of regulation and, in many cases, they're regulations born out of a prior era that just doesn't make a lot of sense today. When you look at some of the labor regulations and laws, they come from a time with the Department of Labor that is being applied to small businesses where it really just makes no sense. In particular, you look at the independent contractor status and the definition of that.
One of the toughest things for small businesses is to get the labor that they need. It doesn't always look like an employee that is a salaried employee. There's somebody that has a specialized skill and the small business needs a little bit of that specialty.
Well, there are challenges for the small business to get that skill because of independent contractor definitions. So, those types of things make it really tough.
I'll finish with taxes. What I'll say is this. If you are a bigger company and you are hiring an employee, you're gonna pay your labor taxes, you're gonna pay your payroll taxes, and that makes all the sense in the world. But if you're a one-person, two-person, three-person company, to pay those same percentages of the employee's salary on taxes, it doesn't work.
It actually causes business owners to not hire, which is the exact opposite of what we want to do. We want to encourage hiring. We want to encourage bringing that labor in. Unfortunately, the way that the tax structure is set up right now, it doesn't encourage small businesses to hire when they're small, when they're just trying to get going.
John McCain: Could I just mention one issue from a national security standpoint?
Perhaps our biggest challenge, which our adversaries have an advantage or are equal to us, is in the issue of cyber security. When you think about cyber security, you think about them stealing our military secrets and getting ahead of us, in many ways, militarily.
But as we were having conversation just off the top of my head, I asked Clate, I said, "Are you hacked?" Maybe you could just elaborate on that answer because I don't think most Americans believe how pervasive are these issues of cyber attacks and the possible impact on your business. Maybe this is a little off the subject, but frankly, I was stunned to hear your answer to my question.
Clate Mask: Yeah, it's constant. We have a security team that's working to prevent hacks.
But we're always getting hit by those threats and by those attacks. Our team does a great job of keeping them out, but you're right, they're not after Department of Defense secrets; they're after private information. They're after credit card information. They're after personal information, and using that to exploit that for financial gain and sometimes just to be malicious, just to do bad stuff.
So yeah, we have a team that does a great job of keeping out the hackers. But it's tough.
John McCain: So, that's part of the cost of you doing business.
Clate Mask: That's right.
Glenn Hamer: It was very interesting to hear Clate's remarks at the meeting this morning, but it's something that we're hearing across the board. You're right, Senator. It's not just simply going into our military computers; it's the private sector that's being hacked on a daily basis.
Not exactly related, but there's been a lot of talk on trade in this election cycle. We also had some interesting side conversations with Clate on the international efforts for expansion, since 95 percent of the world's population lives outside of the U.S. borders. We'd be interested, Senator McCain, Governor Romney, and Clate, on your thoughts on rebuilding the bipartisan coalition on trade that seems to have frayed a little bit.
John McCain: I see a lot of slogans around in our tour, and I think that's great, and quotes from great people throughout history. There's another quote that I haven't seen, but I think is appropriate to this issue and that is, "Those who ignore the lessons of history are doomed to repeat them." The Great Depression was the worst period of the economy in modern times for the United States of America –
had a number of factors that caused it. One was protectionism. One was building walls around America and raising the cost of goods and services that came from outside the United States of America. Any historian will tell you that.
One of the things was called the Smoot-Hawley Tariff Act that raised the cost of imported goods and services to the point where it led eventually to the Great Depression, one of the most painful periods in American history. I think those, frankly, that are against free trade are in violation of that lesson of history. It's based on a fundamental principle that seems to me this protectionism that the America worker can't compete. I'll have your employees compete with anybody in the world on any stage on any way.
People on your team, and yes, there has to be the "level playing field," and there's unfair trade practices and all that, but those are aspects of free trade; they're not an abrogation of free trade.
Friends, I'd like to take you down to Nogales, Arizona today. You'll see trucks and cars and vehicles lined up for miles on one side of the border, and you'll see them on the other side of the border. It's because the finance minister of Mexico told me that Mexico does more business with Arizona than it does with Spain. There are literally thousands and thousands of jobs here in Arizona that are dependent upon that trade. So, I worry.
I'd just like to mention one other point here, and that is what we call the TPP, which is an Asian trade agreement.
My friends, the giant in Asia today is China. If we bow out of the trade competition in Asia, one, they will then be the dominant power in Asia, and, two, we will, over time, be shut out of the growing economy in the world, which happens to be the Asia Pacific region.
I note with some interest, and I don't want to get this political, but our former Secretary of State, when she was Secretary of State, was all in favor of the TPP – that's the Asian trade agreement – and now, strangely enough, she's against it. Maybe some say that she's felt the Bern. I don't know if that's true or not.
Glenn Hamer: It was the gold standard no longer. Governor Romney, what are your thoughts on what we could do to turn the tide on the negativity that has advanced on free trade?
Just as a quick aside, NAFTA has been extremely important for this state. You take a look at our exports. Far and away, Mexico's our largest trading partner, Canada's number two. I would be interested in your thoughts, Governor Romney.
Mitt Romney: Well, I think as Senator McCain indicated, there's the principle of trade, which works for the people of our country and works for people of other countries. It's demonstrated that it helps people on both sides of a trading situation. So, trade itself is something we very much want.
At the same time, as the senator indicated, you have to make sure that trade agreements are being fairly enforced and that both people are following the principles that they agreed to. If, for some reason, a trade agreement doesn't work for you, then you got to go back and renegotiate it. But the principle of trade is very positive for us, and for others.
I say for us in particular, and I say this. One of the things I learned through my business experience and through my political campaign –
is that I've become much more confident and optimistic about this being another American century. I say that because we are going into a period of what will be unprecedented innovation. We've had it in the past, extraordinary innovation, with flying and automobiles and communication and so forth. But now, with the advent of megadata and software and the new technologies that are being developed, the world is gonna change in ways that are hard to imagine. In an innovation environment, the nation that's the greatest innovator is gonna be the most successful, and we are.
I don't know why it is. Maybe it's in our DNA. So many of our ancestors came here because they were seeking opportunity. Maybe it's our legal system. We allow bankruptcy, for instance, in such a way that if people take a big risk and it doesn't work, we don't ruin them. We don't put them in jail, like they used to in places. Our financial system is designed to provide capital in all sorts of ways for startup businesses, for growing businesses and so forth.
Our government, over time, has not put a hand on who the winners and losers are, but instead saying, hey, we're gonna have a level playing field and allow the very best to grow. We are an innovating nation. In a world where innovation is going to drive the success of a country and of a people, you want to be able to trade as Americans because we will succeed. But if we wall ourselves off, guess what? We're gonna be left behind.
Remember those Russian watches that came out after the Soviet Union curtain fell, and the cars they had? Anybody see those Russian cars? Yeah. That's what happens when you don't trade. You fall behind and the people become impoverished.
So, we have to trade. We have to make sure that we have the kind of environment that encourages businesses to grow and thrive here. We have to make sure that we enforce the agreements that we have. But folks, we cannot be fearful of competition because in true, fair competition, America will win every single time.
Glenn Hamer: Thank you, Governor. Yes, there are not many Yugos on the road any longer. Clate, any comments you'd like to add on the international front, how you look at that?
Clate Mask: Well, I would say that for us, it's a matter of not working with countries, but working with people. We have customers in about 70 countries; we've got partners all over the world. We work with our customers and our partners, and help them to grow their business, they help our business. For us, we don't really know a world that's not a global world. We've got about 25 percent of our customers that are outside of the United States, and it's growing and growing fast.
John McCain: What country is probably the most involved with you?
Clate Mask: Right now, I'd say the U.K. and Australia are the countries where we have the most customers.
That's largely because our software, until just recently, was really just for English-speaking. We're beginning to make more advancements that make our software available outside of the English language, but we haven't had time to really build up a customer base there. So, it's primarily Australia and the U.K. where we see most of our international customers.
But like I said, about 70 countries. Brazil is the fastest-growing international segment for us. That's because we've got great partners there who understand what small businesses need to grow, and they're making that possible for Brazilian small businesses to do that by bringing Infusionsoft to them.
Glenn Hamer: Clate, to stick with you on that. I would just open it up. We had an interesting conversation about education and the workplace needs, and really the high salaries people can get in the software area if they have the necessary skills.
Education remains a big issue. Senator McCain played a key role in rewriting, in a very positive way, to give the states and localities a lot more control with the Every Student Succeeds Act. We'd be interested in any of your thoughts, what we should be looking at, and policy makers should be looking at, to make sure we have a workforce that meets your needs.
Clate Mask: I'll talk about it very specifically with respect to Infusionsoft, and then I'll refer to it more broadly in terms of entrepreneurship and a vibrant economy. At Infusionsoft, we write software. So, we need software developers to write that code. We've got 72 software developers today that do an awesome job of writing code, and we're trying to add more and more software developers. For us, across all of the roles that we hire for at Infusionsoft, software developers are the toughest.
They're also very good, high-paying jobs. When you look across the economy, you look at the types of jobs, these are great jobs.
Now, let me talk about more broadly, what do we need to do? I am convinced that when entrepreneurs and engineers – software developers – come together, magic happens. It is amazing. I've watched that in our business. If you look across Silicon Valley and you look across the tech industry, it's amazing what happens when entrepreneurs and engineers come together.
So, if you now take a step back and say, okay, what do we need to do to help engineers and entrepreneurs come together, we've got to do a really good job teaching math and the sciences. We've got to help our young people understand that this is the future of the world they're going into. It doesn't mean that liberal arts aren't important. It doesn't mean that the arts broadly aren't important. But math and science are critical for us.
If we want to maintain that innovative edge, which we have and I believe we will continue to have, math and science is critical. Helping people move into engineering degrees because that is the world that we're moving into.
We think it's crazy right now that once every couple months, we've got to do an update on our iPhone. It's coming faster and faster.
This is the world we live in. We need engineers. We need our people to have that desire to go into those studies, and to join forces with entrepreneurs. To the extent that we can create those engineer and entrepreneurial collisions, where people come together, our economy takes off. It's exciting.
Glenn Hamer: Great answer. We're lucky. The East Valley now is just booming on the tech side. We're very blessed to have such a huge presence from Intel. Senator, I know your work on making permanent the R&D tax credit was a big deal. We have the most innovative university in the country right now in Arizona State University.
Clate Mask: Go Devils!
Glenn Hamer: Governor Romney, don't worry. MIT is right behind us.
John McCain: If they could just get a football team.
Glenn Hamer: All right, no comment on that. With that –
Clate Mask: That hurts.
John McCain: They're great. They're gonna be great. We're gonna make ASU great again.
Glenn Hamer: Now, I'm thrown completely off course. But Senator, you did briefly touch on Obamacare. That's a very serious issue. We're all facing, I don't care what size business you are, some real challenges when it comes to health care premiums. Would love to hear your thoughts on Obamacare and where we need to go.
John McCain: Well, I'll be relatively brief because one of the trailblazers on health care was then-Governor Romney, and I'd like to hear his thoughts on it more than mine. Except just to say this. My friends, it was based on a flawed concept, the whole Affordable Care Act.
That is that we would take money from healthy young Americans and use it to subsidize the health of older Americans. That doesn't work. When you do that to younger people, it shouldn't surprise us when a lot of younger people just say, "Look, I'll pay the fine. I won't pay these incredible premiums." Arizona is the poster child for the increases in premiums that just kicked in on the 1st. My friends, in some cases, it's over 100 percent premium increases.
Clate Mask: Thirty-five percent for us was what was being pushed. Thirty-five percent increase.
John McCain: Thirty-five percent increase and, of course, increases in deductibles and increases in co-pays that is now turned it into an Unaffordable Care Act instead of an Affordable Care Act.
We need to go back and replace it with a free market, entrepreneurial, incentive-based health care system. Whether it be small things like going across state lines to establishing risk pools, where we all would contribute to take care of the health care needs of those with pre-existing conditions. Let people go to Canada and get prescription drugs.
There's a whole lot of actions we could take, and we need to take, because the direction now – I'll end up with this – because of the failure of the Affordable Care Act is they're now saying, "Oh well, let's go to the single payer system. The government-run system." My friends, you were talking about you have clients in England? In England, they have a two-tiered system.
They have single payer – that's the government – and wealthy people can afford to pay for their own health care. The average citizen waits five, six months for a routine operation, a year for another one: a level of health care that all of us in this room would find totally unacceptable.
So, we need to fix it and replace Obamacare, not go in the direction of a single-payer, government-run system, which has failed in every country that it's been experimented with.
Mitt Romney: There's a humorist named P.J. O'Rourke. He said, "If you think health care's expensive now, wait till it's free." That's where our friends on the other side of the aisle want to go without recognizing that when you take competition out, when you have government-run something, it does not become more efficient and less costly.
It becomes more inefficient and more costly, and the quality of care goes down dramatically. You can see that in other countries that have adopted a single-payer system. That's gonna probably be the battle that they would like to wage is, move to single payer because they see premiums going up. Let the government take over; the premium's won't go up so much. Your taxes will.
So, the real answer, in my view, is very much akin to what the senator said. His ideas on changing the national system, I think, are excellent ideas that are worth delving into and taking apart, and seeing if they'll be able to be passed.
One of the challenges I found in my state is that it seems to be harder for the federal government to be able to make minute changes and adjustments as things aren't working very well, as opposed to states. States are more agile. I don't know exactly why that is, but in my state, my legislature was Democrat overwhelmingly.
Eighty-seven percent Democrat. Yet, we got along. After I got elected, I sat down with the Senate president. He said, "Mitt, the campaign's over. The people expect us to do the people's business." We got together every Monday for an hour or two privately, the Speaker of the House, the Senate president and myself, talked about what was going on in the state. That never leaked out. We worked together. My experience is, states work.
John McCain: Mitt's reward will be in heaven, not here on earth, for that.
Mitt Romney: My view was that it works best if states are able to have more flexibility to create their own plans to help people. We created a system that worked pretty well for our people, but we said look, in my state, we have seven percent of our people that are uninsured. We came up with a plan that we thought would work for them. Texas has 25 percent of the people uninsured. What works in Massachusetts is gonna be prohibitively expensive in Texas.
So, you let each state craft their own way. Vermont might say, "We want to be single-payer." More power to you, guys. Go ahead and be single-payer, and your taxes will go through the roof.
But other states are gonna say, "No, we're gonna provide clinics for the uninsured, or we're gonna have a free care pool for those that are impoverished." Let states be the laboratories of democracy. If we can't find a national plan that works hest, that has the kind of market principles that the senator described, let's go back to the way the founders intended, and let states be able to craft their best solutions in the way they think is right for their own people.
Glenn Hamer: Since we're at one of the great emerging companies in the state and the country, and there's such a tech focus, we've touched on this a little bit, but would love just thoughts on the types of things that we need to do to really encourage the entrepreneurial companies to thrive.
In the state, we've done certain things like we've cut the capital gains tax. On the federal side, I mentioned, Senator McCain's worked to make permanent the R&D tax credit. What are some of the things that we need to do to be more competitive as the economy so rapidly evolves?
Clate Mask: Earlier, I said access to labor and capital, those things are critical. For small businesses, being able to get capital is frequently gonna be the difference between making it and not making it. The Angel Investor Tax Credit in Arizona is such a big thing for small businesses to take advantage of. We're in the process of working to get that recreated here. Right now, we're in a period where we don't have that. We were able to take advantage of that. What that does is it gives investors an incentive, a tax credit, to invest in small businesses that are wanting to grow and add jobs.
It's very specific. You have to do certain things in order to qualify. You have to really be into hiring and providing high-paying jobs. We were one of the first eight companies in Arizona, back in 2007, I believe it was, to take advantage under Governor Napolitano of the tax credit. It was a huge blessing for Infusionsoft.
I will go on credit and say we would not be here today if we had not been able to get that private investment that was spurred by an Angel Investment Tax Credit. That's what got us to the point that we could see the growth and the potential to raise venture capital, to raise our sights, and to see how we could really change the world for small business. I look back on that simple little piece of legislation that so many people have a hard time understanding.
In our state today, I've done a lot of lobbying for this, and it's such a critical piece of legislation. If we're serious about the businesses that are going to hire – the small businesses that are getting through that period where now they're seeing a new peak, a new entrepreneurial horizon, they want to go after.
But they need capital to do it. They're not ready for venture capital; they need angel investment. That piece of legislation in Arizona, I would love to see that type of legislation across the country because that is spurring innovation from the private sector through tax credits that go so far, that go such a long way in helping small businesses succeed and add jobs.
That's my spiel on that.
Glenn Hamer: Thank you, Clate.
Clate Mask: Yeah, you bet.
John McCain: Whichever of the two candidates is elected president, for the first time in history, they will be sworn in with a overwhelming lack of trust or favorability of the American people. That's unfortunate. It's very unfortunate. But it's also incumbent, then, upon that elected president to reach across the aisle the way Mitt Romney did in Massachusetts –
to try to get something done for the American people. No elected official likes to be disapproved more than approval.
By the way, the approval rating of Congress is 14 percent. Anyone in the 14 percent that approves of Congress, please raise your hand. I'd like to meet you. If you just raised your hand, please don't drive an automobile here in the area; you're a danger to yourself and others.
It seems to me that the tax code that you just made reference to, it's about that high. No one understands it. It's totally complex. The last time there was any kind of simplification of the tax code was 1986. We need a tax code that the American people can understand and trust.
I would finally add one other point.
Right now, believe it or not, because we have the world's highest corporate tax rate of 35 percent. There's a couple of trillion dollars overseas that is not coming back to the United States that companies that do business overseas leave overseas. I would suggest – and far be it from me to tell them what to do – one of the first things that I would do is say, let's bring that money back to the United States at a much lower tax rate, and with a commitment on the part of the people – the companies, Apple or whoever they are – would invest in infrastructure and also in stimulating businesses, so that we can get this very weak economy some kind of a jumpstart with an infusion of a couple of trillion dollars that could be brought back to the United States.
Again, simplification. People do not trust the government because they don't believe in the tax code and they don't believe it's fair, and they don't understand it.
In these new countries, these small Baltic countries, you know they have tax codes that are one page long? One page, that's all. By the way, they all do their taxes on the Internet. They punch in their code, it comes up on their screen as to what they owe, they punch yes or no. Anybody here knows exactly how different ours is.
Mitt Romney: I'll punch "no" when that comes up, I'll tell you.
Let me do something which is impolitic, but a plea to you in the audience – and Clate, you can add to your lobbying – and that is your education system. Your higher education system is the envy of many around the world.
Your K-12 is not keeping up. If people going K-12 don't have the skills to be competitive, and then they go to ASU or they go to other great institutions of higher learning here, they're not gonna be coming out with the kinds of skills you need. Your K-12 education in Arizona is one of the worst in the country. Did you know that? Did you know you're in the basement? Bottom ten percent or so? That's unbelievable, in a state like this. I don't know how that can be.
People know what it takes to make education successful. I've watched states that have been able to go from very low levels of success to very high levels of success. One of the ways they do that is by hiring teachers that are among the best and brightest coming out of college, for instance, that know how to program, that understand science, that love science and math, that are not just expert in teaching, but expert in a subject that they love.
By the way, to hire the best and the brightest, you got to pay them. You got to have starting salaries that are higher.
There's a great consulting company called Mackenzie, a competitor of mine years ago, but they have an institute that went around the world, understanding why Finland does so well, and Scandinavia does so well, and Singapore and other places do so well in their education systems. They said it comes down to the quality of teachers. They hire from the top ten percent of college graduates to go into teaching.
We typically don't. They go into other enterprises. We got to get serious in Arizona, and our whole country, about the importance of teaching K-12 to get our kids ready for the kinds of jobs to allow us to lead the world.
For those of you in this state, I wouldn't take it much longer. I'd jump up and down. I'd call your state legislator. I'd say, "You know what?" I know this isn't a federal issue. The senator doesn't have to get in the middle of this, but as a former governor, I know how important this is.
Politicians respond to voters. You let them know this makes a difference to you and to your family, it'll make a difference to them.
Glenn Hamer: Governor, your comments in terms of the need to get more dollars into the system, dead on. In fact, this last year, through our governor's leadership, we got three and a half billion dollars through a more creative use of the state trusts over the next ten years, which was a very big deal.
The other point I want to make. In terms of overall funding, we still have a lot of room to go. In terms of performance, I will point out, though, Arizona has three of the ten highest performing public schools in the country. The public school system in Chandler is excellent. The public school system in Mesa is excellent. The key here, though, is replicating that success because the truth is, not every kid has access to those schools.
I think that that's something on a national scale we have to do, and you're dead right that getting more dollars into the teachers' pockets is probably the most important thing we can do.
It has been a great honor to have a chance to moderate this panel. I'd like to give each panelist about 30-60 seconds. Since I'm incredibly outranked, I really can't hold them to it, but I will say that I'll be in big trouble from Senator McCain's team if we don't get the senator out of here. Clate.
Clate Mask: I want to just thank everybody for being here and for taking such interest in economic development, in jobs, in small business growth. I don't think it's a stretch to say that small business growth is a matter of national security. It's economic security.
When small businesses are growing, they grow and turn into bigger businesses. Not all of them; it's a small percentage. But there are 27,000,000 small businesses in the U.S. Out of those 27,000,000 grow big companies that are hiring.
We didn't start as a company that wanted to have 600 – in fact, thousands of employees, which is now what we envision. We didn't start that way. We started with three people that were trying to get something going.
When we work to help small businesses grow, we create economic vitality and we create higher jobs, we create better opportunity for our families, for our kids, for all of those who are Americans wanting to work hard, wanting to make a difference. Small business growth is a major issue and I am hopeful that our political leaders, not only locally here but obviously nationally, make it a bigger deal to have small business growth be a major focus of the future for us.
Glenn Hamer: Thank you, Clate.
Mitt Romney: This election makes a difference, and who represents your state makes a difference. I think John McCain's experience, his judgment, is gonna be critical for the next president, whoever that might be.
I also believe that, perhaps more than we've seen in a long, long time, it's important to have among the people we elect, people of unquestioned integrity and character. This man is an American hero. This man is a model for our kids and for our grandkids.
I'm asking you to go out and vote. We used to say in Massachusetts, vote early and vote often. That's probably not appropriate any more, but I can tell you to get out and vote. Get your neighbors to vote. That's the best way we can reelect a great United States senator, Senator John McCain.
John McCain: As you all know, this campaign is winding down now. There's only four more days, thank you, God. I've always enjoyed campaigning because I've enjoyed traveling around this great state of ours.
Cindy and I, last Saturday night, were down in Tombstone for the Saturday night shootout they have down there. I recommend it. I always had Cindy out in front of me.
Mitt Romney: You're in trouble now.
John McCain: Traveling around our beautiful state and spending time with its citizens is something I always do, but it's obviously intensified in this campaign. I'm very grateful for having the opportunity to have served. I'm also grateful to have made a relationship with this individual to my left, who is dedicated to his country, his family, his church, and to the betterment of this nation.
It goes without saying, I think the world would be very different if we'd had a different outcome in 2012, don't you think?
Mitt and I have this line that we use. After I lost, I slept like a baby: sleep two hours, wake up and cry, sleep two hours, wake up and cry.
Clate, when I come here and meet your enthusiastic employees, seeing what you're doing not only for Arizona, but for America and the world, I'm restored. Sometimes there's a lot of bad news out there. But what you have achieved since 2001, and you began with yourself and two others, this is the great American success story, my friends.
This is what America is all about. I would argue, perhaps, in many ways, only in America.
I look forward to the opportunity of continuing to serve in these very turbulent times. I also remain a great optimist because when I have the opportunity of being in a place like this, it gives me hope for the future of America and a belief that of all the experiments that have been tried, as Winston Churchill said, the Americans try every one, but the one finally that is democracy. It is entrepreneurship, it is free enterprise, it's opportunity, and I couldn't be more happy than to visit this installation and these people and this effort here in my home state of Arizona. So, I thank you, Clate. God bless.
Glenn Hamer: Thank you.
Clate Mask. Governor Romney. Senator John McCain. Thank you.
Clate Mask: Thanks for listening. Don't forget to rate us, write a review, and subscribe to the podcast on iTunes. If you're looking for more ways to grow your business, check out our knowledge center at learn.infusionsoft.com.
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