In the past several years, the church technology industry has undergone many changes that have encouraged some, while discouraging others. As technology advancements continue, new companies start up and newcomers to the church tech industry enter and acquire firms to consolidate and rebuild. More recently, private equity firms have entered the space getting involved in acquisitions and shifting resources to various technology firms in order to position for growth and financial gain. All these moves cause disruption – to tech companies as well as the churches they serve; change is never easy.
I’ve personally been involved in technology communication during my 18 year career, and church technology for 15 of those years. Today, I’m sharing an interview with Steve Caton, a dear friend, former colleague (when we both worked for Christianity.com in the early 2000s), and former sponsor while he was at Church Community Builder, one of the leading web-based church management software companies (ChMS).
1) How has your work over the last 16 years given you an interesting perspective on the church tech industry?
I’ve been working at the intersection of faith and technology since 2000 when I got involved with a fundraising focused dotcom startup in Orange County, CA. The companies I’ve worked with serve mainly para-church organizations and other nonprofits. That changed in 2007 when I started working with Church Community Builder (CCB) so roughly half of my time in the faith technology sector has been working with churches.
My observation at the time I started with CCB was that churches were about seven to ten years behind the rest of the nonprofit sector when it came to adopting technology to support and empower their mission. Keep in mind that the nonprofit sector was about five to seven years behind the business world at that time. That means the Church had a lot of catching up to do. In fact, one of the biggest obstacles to success for CCB in its early days was that churches were still trying to figure out how to do a good website.
CCB was bringing something much more sophisticated than a website to the table. In my opinion, that is why it took roughly five years before CCB started really gaining traction in terms of number of churches they served. They were simply ahead of the curve.
Once we hit 2008, that all began to change. As the real estate bubble burst and the economy tanked, churches learned the hard way that they needed to find a way to equip and empower more people (typically unpaid) in order to further their reach and achieve their goals.
2) As you shepherded CCB from a smaller web-based chms company in 2007 to one of the leading chms companies, what did you notice about the industry and about successful church companies? What are some of the leading factors in a church tech company successfully serving churches?
One thing I noticed pretty quickly was that the church technology market was super fragmented and yet a small handful of companies dominated the space. There were literally new tech companies surfacing every month in those days…..and an equally large number of them closing their doors. It made the decision process very confusing for church leaders and so they gravitated towards the names that had been around awhile.
So, the first answer to your question about “what factors make for a successful church tech company” is credibility. CCB didn’t really have a lot of that at the time so we had to approach the market in a different way. We had to start a conversation no one else in the tech space was having. Everyone talked about geeky terms like data management or data integrity. Some talked about closing the back door.
CCB chose to focus on the value of building community and growing disciples. We were the only church management company talking that way and people really took notice. It was a unique vision and it resonated deeply with church leaders.
Few people are looking for another product to spend their money on, they are looking for a story to belong to. CCB has a very compelling story which between 2008 and today, literally thousands of churches have decided to be a part of.
Finally, in addition to credibility and a compelling story, I think the most important criteria for success is a heart to truly serve the Kingdom by helping the local church be more effective and impactful. This goes to the heart or intent of the people running the company and you can’t fake it! If you say you’re about the Kingdom but you’re really about the money (there’s nothing wrong with making money by the way it just shouldn’t be your primary motivator) that inconsistency will show up in a variety of ways, none of which are positive.
The heart issue is also more important to the church market than any other market I’ve encountered. While there are a lot of church leaders who treat the technology like a commodity and don’t care who makes it, there is a growing number who do care and drive their decision process through that lens.
3) In the past few years, there are have some major acquisitions in the church tech market. Active Network bought Fellowship One, which was one of the biggest acquisitions until Ministry Brands was formed and purchased the Active Faith Division along with many other church tech firms including Shelby Systems, Parish Soft and other leaders in the industry.
This has been super fascinating to watch! Mergers, acquisitions,and private equity investments have not been the norm in the church space until today. I think it will be very interesting to see how this plays out over time. There are many opinions about it but only time will tell. It certainly adds another dimension that church leaders must consider as part of their decision process.
4) How do you feel these mergers will affect the churches these companies serve? How does this go against the grain of what’s been previously done in the industry?
I have mixed opinions about this. There is no question that some of the acquisitions have not gone well for the churches who have been impacted by them. For instance, we have seen a pattern of stagnation in development for at least a year after an acquisition occurs, frequently much longer. We have seen customer support decline. We have also seen companies simply close their doors. None of this is good for churches. On the positive side, we’ve seen some previously dormant companies gain new life and energy on the other side of an acquisition. From my vantage point, however, that has been the exception, not the rule.
5) How do you think churches will be affected by these mergers and how will things shake down over the coming months and years?
I have had numerous conversations with church leaders who simply don’t know what it all means but they know it’s affected them. One church leader I spoke to recently told me that she fears that the current platform they are using may cease to exist in the next two years. She has seen virtually no advancement in the technology for over three years and the customer service has been negatively impacted by high turnover. She wants to make plans for her church that this platform can support but she has almost no confidence that it’s possible. As a result, she is forced to consider other options rather than moving forward with her strategic plans. This kind of situation is playing itself out in churches across the country right now. How will it all shake out? Who knows? And… if the leaders of these acquired companies are brutally honest, they can’t tell you either.
6) Should churches be concerned about who owns the church technology companies that serve them? Why do you feel that there are issues to address?
If we are talking about who makes the desktops, laptops, copiers, etc, not really. But, if we are talking about the church management system (ChMS) …..Absolutely!! When you consider church software, you are talking about the single most important system in a church.
This is the place where churches steward their people, their money and their core processes. That being the case, it is very important to know who is behind the technology and what their vision looks like going forward. Why are they in the business? What qualifies them to understand and serve the needs of churches? Is their presence in the market born out of opportunity or passion? What is their “end game?” What does their history tell you about the direction they are likely to pursue in the future?
These questions should be just as important and the functionality and capabilities of the software. Church leaders have to decide for themselves what the right answers are but most of them aren’t even asking the questions. That leaves them completely exposed and shocked when the software company they partnered with goes in a direction they didn’t expect. It also often results in an expensive and time consuming project to change to a new system.
7) Lastly, what are a few trends that you see happening within the church tech market over the next year and beyond? What advice would you give church administrators, church IT, church techs, etc.?
As a “digital advocate,” I almost always see things to be encouraged about when I look at trends in church technology.
Here are the three trends in church technology that I am most excited about:
1) The continuing development of mobile
I see the mobile app becoming the new gateway for relationships in the local church….replacing the “connection” role that websites have played in the past.
2) New tools for generosity
In addition to things like mobile giving, text-to-give and crowd-funding, I think we will continue to see exciting new developments which make it easier for people to respond with momentary generosity as well as lifestyle generosity.
Like it or not, the church offering plate is being replaced by digital response mechanisms which better fit the habits of our culture….especially the next generation.
3) Metrics and Analytics
This is an area with massive opportunity. Churches are learning how to be more proactive in how they measure the impact they are making on the people God has entrusted to them. In other words, they are asking the all-important question: “are we really making and growing disciples of Christ?” The tools available to help are not currently easy to use or understand. That is going to change in a big way very soon!
As far as advice is concerned, here is the one thing I would say to church leaders, administrators and tech folks collectively: PLEASE stop trying to build your own systems! This is a mistake that the business and nonprofit worlds made and learned from years ago. Why would you want to repeat that same mistake? It’s costly, it’s distracting and it’s not why God created the local church.
Your mission is to “go and make disciples,” not go and make software! In my opinion, doing such a thing is poor stewardship. If you don’t agree with me, consider this: How would you respond to this statement from your largest financial supporter: “Help me understand why our church spent $XX on developing technology last year.” Can you really respond to that inquiry in a way that makes you feel at peace? Will your answer hold true two years from now? Are you prepared to basically become a software development company for the foreseeable future?
The bottom line is that a church’s job is to be THE CHURCH, not a software company–even if you have the resources to do so.