Decoding Chris Baggott

He was bullied. He flunked out of college. His first business tanked—badly. And yet today, he’s arguably the most influential tech entrepreneur in Indianapolis. His secret? An abiding belief that the glass is half full.

July 2018Add a comment

“I castrate pigs.”

Chris Baggott—bespectacled, a bit bookish, and bearing none of the sartorial qualities one would associate with a multimillionaire or a farmer (he’s both)—makes this pronouncement at his downtown office about an hour and a half into a conversation that has, until now, focused on his history as a tech entrepreneur: his cofounding (and subsequent sale) of the digital-marketing juggernaut ExactTarget, and his fast-accelerating food delivery startup, ClusterTruck.

It’s only when the conversation turns to the specifics of Tyner Pond Farm, the Greenfield-based farm he founded in 2010, that the topic of minor, but deeply unpleasant, animal surgery arises. “The first time I did it was after our vet’s dad, who had been castrating pigs for 50 years, had done one,” he says. “And it was terrible. The pig was screaming and stressed, the mother was upset, and babies were running everywhere. And I’m like, ‘Wait, wait.’” As his vet’s father looked on that day, Baggott snagged a three-day-old piglet, placed it in his lap, and pulled its legs up toward its head. It was over in seconds.

“Snip, snip, no fuss.”

How does a tech mogul master something like that?

“YouTube,” he says. “That’s how I learn stuff.”

Most tech millionaires wouldn’t even deign to dirty their shoes in a pig sty. But Baggott takes a hands-on approach to pretty much everything he does. He has an abiding, almost irrational optimism that he can figure things out. What seems like an insurmountable obstacle to an average person seems like “Tuesday” to him. Teach himself to castrate pigs by watching YouTube videos? Hey, why not?

You may not have heard of Baggott. But if you live in Indianapolis, you’ve felt his influence. If Baggott, Scott Dorsey (his brother-in-law), and Peter McCormick had never started ExactTarget, you’d probably still be calling our tallest building “the Chase Tower.” When the trio launched ExactTarget in 2000, Indianapolis was barely a blip on the national tech radar. But the company’s meteoric growth—which culminated in an acquisition by Salesforce to the tune of $2.5 billion in 2013—paved the way for the city’s vibrant startup scene today.

The initial idea for ExactTarget—basically, using email to create personalized marketing campaigns for small businesses—came from Baggott. Friends and associates describe him as a “disruptor,” “futurist,” or ““visionary.” In the simplest terms, he is an idea man. He has a knack for coming up with novel, technology-driven solutions to problems. “I’m kind of a one-trick pony,” Baggott says. “But it’s a pretty good trick.”

The windfall from Salesforce’s acquisition of ExactTarget gave Baggott the means to practice his trick on whatever interested him. And lately, most of his ventures have revolved around agriculture and food. In addition to Tyner Pond Farm, which raises and sells sustainable, non-GMO meat, Baggott owns a grocery store (Tyner Pond Market in Irvington) and three farm-to-table restaurants (The Mug, which has locations in Irvington and Greenfield, and Griggsby Station, also in Greenfield). A gastropub, Bonna Tavern, is set to open in Irvington later this year.

But by far Baggott’s most time-consuming venture these past two years has been ClusterTruck. The on-demand food delivery service, which cooks and dispatches meals from a centralized kitchen (Baggott calls it “a restaurant without a dining room”), has grown exponentially since launching in 2016. It expanded into five additional cities—Cleveland, Columbus, Kansas City, Denver, and Minneapolis—over the past year.

Not bad growth for a startup. But if Baggott had his druthers, he would have gone global with ClusterTruck this year. Patience, he admits, isn’t one of his strengths. “I get distracted easily by shiny things,” he says.

At 58, Baggott has the restless energy—and, at times, also the awkwardness—of a teenager. His personality conveys none of the bravado or arrogance you would expect from a wealthy entrepreneur. If you get him talking about his current fascination, he’ll become garrulous and animated. But more often, he is, by his own admission, an introvert.

He’s especially circumspect on the subject of his personal life. And the more you learn, the easier it is to understand why. Baggott’s early years were marked by the kind of pain, frustration, and failure that would wreck anyone not equipped with his tenacious belief that better things are around the corner.

 

Chris Baggott was born in Pittsburgh, the middle child and only boy. His father died when he was in grade school. His mother remarried a man Baggott describes as “a horrible, horrible person.”

He isn’t interested in getting into the details of his stepfather’s behavior. “There was a lot of abuse in our house,” he says flatly. Unlike him, he says, his sisters never really recovered from it. “I am sure they were abused in a lot of bad ways that I wasn’t,” he says.

Today, one of his sisters is homeless in San Francisco. The other lives alone in Washington, D.C. “I was able to escape, and they weren’t,” Baggott says. “That’s a big burden of guilt that I carry.”

Baggott’s escape hatch came in the form of neighbors Bill and Avis Mohney, who had daughters around his age, but no sons. They took Baggott in and, in many ways, became surrogate parents. “I think we became the family Chris really wanted,” Avis Mohney says. “A mom, dad, dinner on the table. We ate meals together. We did things together.”

Bill took Baggott kayaking and hiking—activities that Baggott excelled in. He was at his happiest when he was either on the river or nose-deep in a book; as a kid, he was a big fan of The Hardy Boys. But at school, he struggled to fit in. Avis says he was an “awkward” teenager who was often misunderstood—and mistreated—by his peers. “By today’s standards,” she says, “he was bullied.”

Baggott also struggled in the classroom, where he rarely earned a grade higher than a D. “He was so smart, but he had a hard time putting that out,” Avis says. Baggott’s academic failures led to punishment and disapproval at home. But at the Mohney house, he felt loved and supported. “They showed me a future,” he says.

But his future wouldn’t be easy. Baggott barely got into college (and “the worst college in Pennsylvania” at that, he says) before promptly flunking out. He was passing the time working as a river guide when a friend recommended he enroll in an experimental liberal arts college that gave narrative evaluations instead of traditional letter grades.

Evergreen State College in Olympia, Washington, was the first academic institution where Baggott actually excelled. He earned a Bachelor of Arts at Evergreen, along with the confidence he needed to function in the corporate world. His first job was for Abbott Laboratories as a salesman. Then he was recruited to the commercial printing giant RR Donnelley, where he rose through the ranks to become the marketing manager of its catalog department. He also met his future wife there.

Amy Baggott—born Amy Anderson—grew up in Greenfield as one of three daughters of James and Patti Anderson. Her father, a former Air Force captain and a widely respected physician in Greenfield, would become a role model and benefactor to an increasingly entrepreneurial-minded Baggott. When the Baggotts moved to Indiana in 1992, Anderson loaned his son-in-law $45,000 and cosigned for a $600,000 bank loan so he could buy a local company called Sanders Dry Cleaners. “In my mind, I thought I would buy my strip-mall dry cleaner and build my empire from there,” Baggott says. “I was naive.”

According to him, 1992 was also the year that “everybody stopped using dry cleaning.” Baggott lost his two biggest corporate clients—Eli Lilly and a major insurance company—within the first 12 months of owning the business. Some of this was just plain bad luck, but Baggott also admits to judgment errors. “I made so many mistakes,” he says. “I knew nothing about the business.”

Still, he was determined to repay his father-in-law. He desperately looked for ways to drive revenue. He implemented home delivery routes. And he started experimenting with a primitive form of email marketing, putting a sign at the front counter to collect customer email addresses. The headline read, “Do You Have AOL?”

Amber Groce, who helped manage Sanders Dry Cleaners and now runs Tyner Pond Farm, thought her boss was crazy. “I was like, ‘Can you please focus on dry cleaning?’” she says. “We are struggling.’”

 

The first sign that Baggott’s email marketing idea might turn into something bigger came during a national conference for dry cleaners. “A bunch of us youngish guys who had bought dry-cleaning businesses were sitting in a bar like, ‘Oh my gosh, we have really screwed up our lives,’” he says. Baggott told the group about his email marketing experiment, and how it had led to improved customer relations and engagement. Soon, his drinking-buddy dry cleaners were asking him to send his marketing emails to their customers for around $300 per blast.

While Sanders Dry Cleaners puttered along, Baggott began exploring the possibility of turning his email marketing hobby into a full-fledged business. He took the idea to his brother-in-law, Scott Dorsey, who had just earned his MBA from the Kellogg School of Management. Dorsey brought in Peter McCormick, another MBA, who Dorsey had worked with at the office furniture manufacturer SteelCase. Together, they launched ExactTarget from a $200-a-month windowless office located behind a McDonald’s in Greenfield.

Early on, ExactTarget operated much like a digital marketing agency, building and sending email campaigns for small businesses. “It was tiny,” Baggott says, “but you could see that it was working.” Larry Zore, who had been a delivery driver for Sanders Dry Cleaners, came to Baggott with an idea to grow the business into a software company. Zore knew two young software developers, John Hurley and Ben Timby. They soon joined ExactTarget and helped transform it from a marketing firm into a software company.

If Sanders Dry Cleaners was an anemic mule, ExactTarget was a thoroughbred race horse. Every year, the business grew. Its first really huge win came when it got the chance to pitch Home Depot in 2003. Baggott remembers sitting with their top marketing brass, who said they planned to grow their email list from 6 million to 30 million. They wanted to know if ExactTarget could handle the volume. “We knew we couldn’t do it,” Baggott says. “So I had to spin the conversation to value. I asked, ‘Is growing your list really the goal? Or is it revenue?’”

Home Depot hired ExactTarget and became one of its anchor customers. Throughout the 2000s, ExactTarget’s client list grew all the more impressive. Gap Inc., Coca-Cola, Papa John’s, and Nike all came aboard. Although Baggott left the company in 2006 to launch a new venture, Compendium, he remained on the board until the company went public in 2012. He recalls attending the IPO in New York and being “in awe” of the entire experience.

“I remember seeing our CFO, Traci Dolan, and she’s crying and talking about how many millionaires we made, and how many multi-thousandaires we made, and how many people were going to be able to pay off their houses or send their kids to college,” he says. A year later, Salesforce agreed to acquire ExactTarget for $2.5 billion—the largest tech sale in the history of Indianapolis. “Every time I see that tower,” Baggott says, “I’m amazed.” Baggott is sheepish about sharing how much he made from the Salesforce acquisition. But according to a 2014 Indianapolis Star report, Scott Dorsey walked away with about $70.5 million. Baggott’s payout figures to be in the same neighborhood.

Baggott and his cohorts aren’t the first local software entrepreneurs to strike it rich. Back in the 1990s, tech entrepreneur Scott Jones made a mint by inventing several new technologies. Although the two men couldn’t be more different in terms of personal style (Jones used his wealth to build a $20 million, 27,000-square-foot mansion that was featured on MTV’s Cribs; Baggott lives in the same Greenfield home where he and Amy raised their children), Jones sees Baggott as a kindred spirit when it comes to risk-taking. “Places like Silicon Valley have had a high tolerance for risk for decades,” he says. “I’m glad to see Indy churning out more dreamers and risk-takers, some of whom will enjoy high rewards when they aren’t brushing themselves off from dismal failures.”

Compendium, the business Baggott launched during the rise of ExactTarget, wasn’t really a dismal failure. But it never took off the way Baggott had hoped. Billed as an SEO-driven blogging platform, Compendium struggled to compete with free open-source competitors like Blogger and WordPress. Baggott says Compendium’s focus on SEO and content marketing created value for customers, but a lot of audiences just didn’t get it. “We were way out ahead of the market,” he says. “And maybe we could have done a better job of marketing it.” Nevertheless, Compendium was sold to the technology behemoth Oracle in 2013.

While running that business, Baggott read Michael Pollan’s The Omnivore’s Dilemma. The book’s exposure of the ills of industrial agriculture hit Baggott like a lightning strike. “It’s kind of hokey, but I got engaged with sustainable farming because of it,” he says. He also believed there was a growing appetite for local, non-GMO food among consumers, and figured he could turn his newfound passion for sustainable agriculture into a successful business. So he bought some land in Greenfield and started farming.

 

After 28 years of marriage, Amy is still bewildered by her husband’s strange immunity to negativity. “He’s been through so much, and yet he’s completely positive,” she says. Maybe Baggott’s difficult childhood steeled him for life as an entrepreneur. It certainly gave him the fortitude to go into a hostile environment fully believing he can make friends and change minds.

When starting Tyner Pond Farm in 2010, Baggott stormed the Hancock County farming community with the zeal of an activist, pushing progressive farming principles on a crowd of traditional farmers, who weren’t necessarily excited to be lectured by a tech millionaire. “I stepped on a lot of toes,” Baggott says. “I presented it as good-versus-evil, and it’s really very, very gray. Farmers are in a system they can’t get out of. If you bought a combine five years ago for $350,000 to harvest soybeans, what are you supposed to do? Pivot? I am not going to change what you grow. But I can influence how you grow it, because I’ll be a customer for non-GMO crops.”

Still, convincing farmers to grow non-GMO crops—even when Baggott is willing to pay for it—has been an uphill battle. “People get stuck in what they ‘know’ to be the truth and can’t look beyond it, and that’s really what is going on with agriculture today,” he says. “But it’s not the farmer’s fault. The epiphany for me was that you have to create new opportunities for them, and they will do whatever is the best use of their land and their time.”

These days, Baggott’s mind is constantly churning on how to create those opportunities. Not all of them have fared well. He calls Husk—the artisanal frozen-food brand he launched with fellow entrepreneur Nick Carter in 2013, and which they sold off in 2016—“a big failure.”

The idea behind Husk was simple: Local food isn’t in supermarkets because local farmers don’t have the means to get it there. So Husk would handle the processing, packaging, and branding of local produce for farmers, starting with Indiana sweet corn. The concept seemed airtight, Baggott says, until he realized that supermarkets don’t stock their own shelves. Only a couple of subcontractors do, and they are often controlled by the large food labels. “We were in over 300 stores, and they wouldn’t restock it,” Baggott says.

Carter disagrees with Baggott’s characterization of Husk as a failure, but he admits that it didn’t yield the returns investors were looking for. “Could Husk still be alive? Maybe,” Baggott says. “But that goes back to a lesson I learned with the dry cleaners: Just being alive isn’t good enough.”

 

It’s a blazingly sunny day in downtown Indianapolis, and Baggott stands outside the ClusterTruck kitchen as cars and cyclists queue up to retrieve orders for delivery. The sleeves of his oxford shirt are rolled up his forearm, revealing a tattoo of some words: “Don’t ship maybes.”

As in, don’t send a so-so tenderloin. Don’t hire just-OK talent.

The company motto is all about striving for perfection. “I love it as a philosophy,” Baggott says, “and I was the first one to get a tat—”

Wait. Other people have this tattoo?

“Sure. Lots of folks. From our COO all the way down to the kitchen. We pay for the tattoo now.”

This phenomenon is one of many ways that ClusterTruck is different than Baggott’s previous ventures. From its name (which rhymes with a popular obscenity) to its marketing (ClusterTruck is boldly positioned as a “revolution” in the food delivery space), the ClusterTruck brand has a fun, subversive edge.

The idea for ClusterTruck—or at least part of it—first dawned on Baggott during a conversation with local chef Neal Brown. Brown told Baggott that delivery would never work for his own restaurant, Pizzology, because its food is meant to be eaten fresh. Meanwhile, Papa John’s hires food scientists to figure out how to make its pizza still taste good after an hour. It got Baggott thinking. “If I can control the delivery people and the preparing of the food,” he says, “then I can time things so that when a customer places the order, I know where the delivery person is, and I know how long the food takes. Then I don’t start cooking until the right time.”

That, in a nutshell, is how ClusterTruck—an algorithm-powered, delivery-only restaurant that serves a six-minute driving radius—works. Made-from-scratch food is prepared in a kitchen, and a software-driven system ensures drivers arrive right as the food is packaged for delivery. The driver never has to leave the car. They pick up orders at a window, and customers are instructed to meet them at their curb.

Is ClusterTruck successful? It seems to be a hit here in Indianapolis. A January 2018 Inside Indiana Business report claimed that ClusterTruck has attracted more than 11,000 customers since launching in 2016. (Baggott wouldn’t confirm the figure.) Its funding numbers suggest investor confidence. According to an SEC filing, it raised $10 million in equity financing in 2017.

For his part, Baggott likes to point to ClusterTruck’s Yelp reviews as evidence of its success. “For our last fundraising round,” he says, “I had one guy who rounded up a bunch of other wealthy investors and said, ‘Go to Google and type in Grubhub Yelp and then type in ClusterTruck Yelp. That is all you need to know.’” ClusterTruck averages well above four stars on Yelp, while Grubhub, the publicly traded leader of the food delivery market, averages a lowly one star.

The company’s expansion into new markets has come with some hiccups. A Bloomington-based ClusterTruck kitchen was shuttered last May (“It’s just not a big enough city,” Baggott says), and its marketing team has learned the hard way that different cities require different strategies and messages. “The reality is, if you live in Denver versus Indy, there is a different story you’re telling yourself about yourself,” he says.

The bottom line: ClusterTruck is approaching household-name status in Indianapolis, but it’s a new and decidedly minor player in an extremely crowded food delivery market. Grubhub, DoorDash, OrderUp, Uber Eats, and Postmates all have vastly more market share. But Baggott believes their third-party food delivery model is deeply flawed—largely because they effectively steal customers from the restaurants whose food they deliver.

To explain, Baggott sketches a hypothetical scenario. “Chris” orders a burger from The Mug through Grubhub. Now Grubhub knows that Chris is a delivery customer and likes burgers. “Now here comes my friend Mike Cunningham of Bru Burger, and he goes to Grubhub and pays for higher ad placement,” Baggott says.” The next time Chris goes to Grubhub, he sees a Bru Burger ad and maybe a deal. Suddenly, Chris is buying Bru Burger. And not The Mug.

“To me,” he says, “that’s a great evil.”

As he has progressed through his entrepreneurial career, Baggott has increasingly looked at business through a moral lens. Ethics matter. With farming, he talks about a hierarchy of goodness. With ClusterTruck, he talks not only about being fair to restaurants, but also about treating delivery drivers “with dignity.” “The worst job in the gig economy is food delivery,” he says. ClusterTruck aims to change that by building a system where the driver is the “number one constituent.”

“In our model, we want to please the driver the most,” Baggott explains. “If we please the driver, we have the driver. And the system works beautifully if we have drivers.” As Baggott greets them outside the ClusterTruck kitchen, a young woman pulls up with a baby in her backseat. She chats with Baggott before picking up her brown-bagged order and driving off. “She can work two or three hours a day and make $25,000 to $27,000 a year,” Baggott says. You can hear the pride in his voice when he adds, “It’s a fantastic gig.”

Baggott believes that as long as the food is good and the drivers are happy—and as long as ClusterTruck continues to forge strong partnerships with local restaurants and food producers in each new market—ClusterTruck will continue to win over customers of Grubhub and its ilk. “Anywhere a third-party model exists,” he says, “we should prosper.”

Chris Baggott knows he isn’t perfect. “I’m easily distracted. I’m a terrible manager. I hate leading meetings. I avoid conflict. I have a freakish need to be liked.”

It’s a need that is often not met, according to his wife. “He always says, ‘People either love me or hate me,’” she says. “He’s just not subtle. He’s not afraid of talking about how to do things differently, and some people are really put off by it.”

Certainly, some people find Baggott’s personal style a bit prickly. Ask around, and you’ll hear stories of awkward social interactions. But everyone interviewed for this story said that, despite his flaws, Baggott is a genuinely decent person with good intentions. And those who know him best—like his former business partner Dorsey—can’t say enough nice things about him. “He has an ability to craft and shape a vision and get other people running with him to execute and act,” Dorsey says.

Back before they started ExactTarget, Baggott and Dorsey were just two brothers-in-law with big entrepreneurial aspirations. At Thanksgiving dinner, they would share ideas and compare business plans. “The thing that’s really unique about Chris is that many of us have lots of ideas for new businesses, but he doesn’t just talk about them—he does them,” Dorsey says. “His tempo of thought and action is really kind of unmatched.” Dorsey describes Baggott as having a “big motor.” What fuels it?

“Probably hubris,” Baggott says. Reflecting on his career, Baggott points out that there really isn’t anything particularly special on his roster of accomplishments. “I haven’t invented anything. I didn’t create any industries,” he says. “I just see these problems, and I think I can solve them.”

“Hubris” is defined as excessive pride. But what Baggott really has a surplus of is optimism. There was no reason for him to ever think he could be this successful. Not when he was suffering the wrath of an angry stepfather. Or flunking out of the worst college in Pennsylvania. Or losing the large sum of money his new father-in-law had gifted him.

“I’m not super well-educated,” he says. But one lesson he has learned: No matter how bad you screw up, “you can recover from it and control your own destiny.”

“If I can do it,” he says, “anybody can.”

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