In this Beyond the Deal mini-sode, Thoma Bravo Managing Partner Seth Boro sits down with SailPoint CEO and Founder Mark McClain and President of Worldwide Field Operations Matt Mills to talk about the effects of AI on identity security, being acquired by Thoma Bravo not once but twice, and what it was like to ring the opening bell at the New York Stock Exchange.
This podcast is for informational purposes only and does not constitute an advertisement. Views expressed are those of the individuals and not necessarily the views of Thoma Bravo or its affiliates. Thoma Bravo funds generally hold interest in the companies discussed. This podcast should not be construed as an offer to solicit the purchase of any interest in Thoma Bravo fund.
AIR DATE: April 4, 2024
Hi, I'm Seth Boro, Managing Partner at Thoma Bravo, and this is Beyond the Deal, a special bonus episode of Thoma Bravo's Behind the Deal, and I'm here with Mark McClain, SailPoint's CEO and Founder, and Matt Mills, SailPoint's President of Worldwide Field Operations. I'm really excited to dive deeper into what drives these business people, and as just people. If our viewers want to learn more about the origins of our partnership, they can listen to your full-length episode of Behind the Deal.
But now, in case anyone is joining us for the first time, can you give us the elevator pitch for SailPoint? And I think we'll start with Matt, given he is responsible for selling products. So let's hear if he can do it.
Matt, what is the elevator pitch?
So the guy that's- that really would be perfect for this is Mark, but I- I'm gonna give it a go. Um, look, w- you- you'd just do such great 'cause you started at the very beginning.
(laughing)
No. Look, w- we're- we're uniquely positioned to solve the complex identity security problems of the largest, most complex multi-national companies in the world, uh, you know, to help them really identify who is doing what to whom with the data, right, access, and the outcomes. Um, it started off in- in, uh, 2005-ish, right?
Mm-hmm.
And it was really about provisioning, right, and life cycle management, right, and today, it's evolved into identity security. No longer is it just about efficiencies. No longer is it just about productivity. It's more than certifications. You cannot secure your enterprise, right, without securing your identities, and to be fair, the identity security is actually a means to an end. What we're really securing is the data and applications, and that's what we do better than anybody in the world today.
You're really good at that. I can see why he got the job.
I- I- I think he got the job-
(laughs)
... 'cause he's really good at that.
I'm actually a ham.
Seth would like to... Seth would like to buy now.
I'm in.
(laughing)
I'm in.
Um, Mark, have you heard of AI?
I have. Do you know what it stands for, though?
I think.
Everybody keeps talking about it, and I'm very confused.
Where does it stand from your perspective in terms of- of importance as it relates to the evolution of cyber and tech and... You've been the identity market, obviously, for-
Long time.
... a long time.
Well, the good news is SailPoint to our credit, and I credit our product team, we actually got into this game pretty early. You know, generative AI is what kind of blew up in the last year, but AI as a technology has been around. And we first, really, started pressing into AI six years ago now, and- and the reason was, if the scale of complexity of the customer we deal with, it's gotten quite clear to us, and I think increasingly to our customers, you cannot solve these problems without lots of intelligence and lots of automation. The days of people thinking they can manage it with a spreadsheet is you over. They know now they're going to need lots of intelligence to sift through mountains of data, see patterns, understand concerns, and help really ensure, as Matt said, that we are securing the enterprise and its data and applications by understanding the identities, who they are, where they are, and what they can access. And customers have really, really woken up to that in the last five to seven years.
That makes sense. I mean, it- it's such an amazing opportunity for the company, and also, of course, as we talk a lot about, there's all sorts of incremental cyber threats that- that-
Of course.
... that, you know, come on the back of AI and generative AI, you know, namely-
Mm-hmm.
... that also create opportunity, but also, um, you know, mean that we have to innovate, continue to innovate aggressively as a- as a company.
Very much.
How do you think... I mean, obviously, Mark, you like this opportunity. You started the company and have been in identity for a long time, but how do you... when you think about what you see ahead of you-
Mm.
... in this identity space, Matt, and, uh, you know, you're-
Yeah.
... you're responsible for all field operations, you're in front of the customers all the time, how is it relative to other opportunities you've seen, just where- where does it stand?
Uh, look, I'm- I get up every day, and I'm on fire. I'm pumped. I think this is a unique opportunity for us. Um, you know, just go back to 2019 when I came here, and one of the first conversations he and I had is, I said, "We- we got out of the governance business," right, and- and we agreed, and we knew where this was going. Uh, little did we know on March 13th, 2020, right, everybody was going to go home and it was going to be on, and- and the pandemic really accelerated with work-from-home. Um, you know, we saw digital transformation at a- at a rate that we hadn't seen in the prior 10 years, and all that fit very nicely into our strategy of identity security.
One of my favorite SailPoint memories and- and, honesty, one of the best days of my career, because it was, um, first of all, the culmination of- of an amazing partnership, uh, in some ways, um, but also, something that I hadn't done before was the IPO of SailPoint-
Mm.
... and being on the exchange floor ringing the bell. What was that experience like for you? How did it feel? It must have been just an amazing day, uh, for you and company after all those years of building the business.
It really was. Yeah, I guess the only word that comes to mind is surreal (laughs). Uh, I remember walking up. We had stayed at a hotel, of course, and we walked around the corner there in New York, and there was the Stock Exchange, and they had this big banner for SailPoint (laughs). It just kind of, like, took my breath away. I'm like, "Wow. Look at that." And then, um, it was really a fun thing. I had no idea this was gonna happen. We had a, like, a little gathering earlier that morning over breakfast before we kind of went in for the bell-ringing stuff. The then CEO of the New York Stock Exchange, he gave what I thought was probably going to be kind of a... I don't know... kind of scripted, "Oh, isn't this nice that we're all here?" You know, felt like something.
Instead, he actually gave quite a (laughs) stirring little speech about America, and entrepreneurship, and the, you know, the things this has done for our country, and the whole world, and building the economy and everything, and then he turned to Kevin, my- my co-founder was with me that day, and said, "And it's just really rare that guys who started these businesses are here to ring the bell." And I got all choked up (laughs), and I was like, "Oh my gosh, I wasn't supposed to get all choked all. This is just a business thing." And, uh-
(laughs)
... you know, it was quite a thing. Okay. Let me flip the question, Seth. What was it like for you? You said it was something you hadn't expected, certainly experienced?
It was so much more exhilarating than I thought it was going to be.
Mm-hmm.
Just the energy around it, um, being on the floor, ringing the bell, being on the platform-
Yeah.
... it felt very historic.
Yeah.
But it also, um... It was so meaningful for you-
Mm.
... and Kevin, and the company that it was just so nice to be a part of-
Mm.
... and we, of course, you know, we- we were along for the ride.
Yeah.
Um, but it was... It was really nice to be there.
A very important part of the ride (laughs) as my guest.
Very... It was a very momentous day-
Yeah.
... and I just remember being so energized-
Mm-hmm.
... that whole day, and, you know, really couldn't wait to do it again. You know, Mark, one- one of the things that was very clear from the- the moment we met you-
Mm.
... uh, many years ago-
We were both much younger.
... (laughs) is, uh-
(laughing)
... is, um, oh, actually, I think we can edit out our age-
I hope so. I hope so.
... very easily. But, um, but it's- it's, you know, it's clear that you're just an amazing leader-
Mm.
... and, um, I think that that's been obvious from day one, uh, from the first that we met, and you see it in the- in the loyalty of your people that you hire over time, you know, to- to the- to the business, and also, how you treat them, um, both on the way in and on the way out.
Mm.
Um, but you wrote a book about leadership.
I did.
Uh, we'd love to hear-
(laughs)
... about your- your leadership philosophy. Um, we won't ask you how many copies have sold.
(laughs) Well, see-
(laughs)
... now that your... Now that your mom bought that one-
(laughs)
... I think I might be up to two dozen, so we're doing great. Um, yeah, no, I- it's, you know... It's, obviously, hard to try to capture, I guess at that point in my life, about 30 years of- of leading in industry and trying to think, "What- what is it that really drives how I think?" And, um, I think a lot of it is just a complete belief that I can only succeed when I'm surrounded by amazing people and- and those people have- have kind of the right kind of attitude, that it's kind of a team first, we win together, we- we help each other, we cover for each other, we- we hold the bar high on the kind of people we want in this business, right.
Um, uh, you know, forget about my book. Let's go to, uh, a guy who writes a lot of books that have sold, a guy named Patrick [inaudible 00:08:48]. He's one of my favorite business authors because of the way he talks about culture and- and, uh, its impact on strategy and performance. One of the things he talks about is the kind of people you need are- are these people who are humble. They're not, like, self-effacing to the point of- of milk toast, but they're highly confident without being arrogant, and then they're really good at what they do (laughs), and they're looking to grow and get better, um, and they're really attuned to what's happening in- in both inside and outside the company, the environment. Is- shorthand for that is humble, hungry, and smart, and we've adopted that, really.
At some point we say, "Look, you know, when we bring a company full of those kinds of people, and we continue to focus on listening to the market and to customers, we're just going to stay ahead," as Matt said, "'cause we're attuned to what's needed, and we're gonna get there before the other guys." I like to say, "The long-term, sustainable, competitive advantage is listening better," (laughs) right? The more you're attuned and listening to where the world is going, you're more likely, as Gretzky famously said, "To go where the punk's going." You're kind of a hockey guy, I think.
Thanks for-
(laughs)
... thanks for talking-
Free shout out for a Canadian hockey player.
(laughs)
You're welcome. Okay, I have get- ask you one question.
Yeah.
Um-
(laughs)
... well, you know, you kinda had part one with SailPoint and part two with SailPoint.
Yeah.
Kind of what's... Uh, what is the old question we always go on essays in school? Compare and contrast, um, kind of SailPoint one and SailPoint two. Kind of what- what do you see that's b- better, different, good? What do you... What do you see that, oh, gosh, you know, we- we really got some things really great that first time, and maybe we need to, maybe, even revisit those? I don't know how you think about it.
I feel like part one was, um, when you have this very young to... maybe think about a sports analogy... like a very young team-
Mm.
... that, um, all of a sudden wins a championship. You're like, "Wow." (laughs) I didn't think that was gonna happen so soon.
(laughing)
Yeah, I- I-
Right?
Yeah.
And now I-
It could be... It could be your local team, maybe, uh, pulling that off here shortly.
And- and now I feel like we just re-... We've- we've got, like, the three P going on.
There it is. There it is.
Um, the thing that's amazing, though, the- the big- the- the... Really, the thing that's amazing is it's really rare to see a company that is growing at scale.
Mm.
You know, let's call it a billion dollars to so of revenue, um, at a growth rate that is not that dissimilar from when we first met you when you were, roughly, 50 million of revenue.
Yeah (laughs).
And the market has become bigger, more complex, more interesting.
Mm.
And today, really, the, you know, all- all kidding aside, I mean, the ex-... The operational execution in the business across all functions is world-class.
Mm.
Um, and doing that, being very profitable while you do it, um, continuing to innovate, it's you, you know, it's- it's, like, such a well-oiled machine at this point, um, but it hasn't lost, the company has not lost what made it so special-
Mm.
... when it was 50 million in revenue.
Mm-hmm.
So it's really incredible to see. Um, it's so mu-... It's so fun to be back. I mean, I can't tell you how happy I am that we re-partnered together.
Mm-hmm.
We were missing you guys.
Yeah. Well-
It had been a... It had been a few- few- few lonely years.
We were wandering out there in those public markets.
(laughs)
We didn't know what to expect out there. No, well, we'll see where it goes from here. It's, uh, some still, uh, exciting times ahead. So, yeah, it's fun, fun to be back. I think that's a pretty universal view of our team.
From myself and all of your followers-
(laughs)
... we would like to thank you for coming back. The popular demand was hard to control.
(laughs)
Uh, we appreciate it. We appreciate the partnership. It's, uh, it's, you know, a special partnership that we have and round two feel even more special than the first one, so thanks to you both.
Thanks, Seth, thanks for having us.
Yeah, it was a great pleasure. Please, do thank both of our followers.
(laughing)
The executives were not compensated in connection with their participation, although they generally received compensation in connection with their roles and in certain cases are also owners of Thoma Bravo portfolio company securities and or investors in Thoma Bravo funds, such compensation and investments subject participants to potential conflicts of interest.
Certain statements about Thoma Bravo made by portfolio company executives are intended to illustrate Thoma Bravo's business relationship with such persons rather than Thoma Bravo's capabilities or expertise with respect to investment advisory services. Portfolio company executives were not compensated in connection with their podcast participation, although they generally receive compensation and investment opportunities in connection with their portfolio company roles, and in certain cases are also owners of portfolio company securities and/or investors in Thoma Bravo funds. Such compensation and investments subject podcast participants to potential conflicts of interest.
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