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What's interesting is, Noel, I thought you-
... you have this reputation for being such a tireless worker, right? And that's your background, your heritage. You shouldn't be able to shoot 76-
... on a Wednesday afternoon, but I'm gonna give you the benefit of the doubt and just say maybe you grew up playing a lot of golf but-
You never invite me out anymore, Holden.
'Cause I don't like losing.
That's why. You know, when we got started together, Noel, I realized, or, Thoma Bravo, we had a lot of companies that compete in medium to size markets with the finite expansion opportunity and we don't have that many companies that are dynamic as Conga.
Thank you, Holden. I, I use the analogy with my wife, this'll be a soccer analogy for any Americans, but the opportunity to work with Thoma Bravo's to me was like getting promoted from the championship to the premiership.
Welcome to Thoma Bravo's Behind the Deal. I'm Thoma Bravo founder and managing partner, Orlando Bravo. And today, you'll hear the story behind our acquisition of Conga from CEO, Noel Goggin and Thoma Bravo managing partner Holden Spaht.
Since we acquired Conga in 2020, it has been transformed from a business that focused on digital document transformation to a true intuit solution for digital transformation at enterprise level organizations. For me, the Conga deal is all about leadership. It is, if not the best case study for Thoma Bravo and leadership, it's one of the best case studies on how much leadership matters. The investment in this whole industry for us started with the acquisition of Apttus. And that whole market that Conga operates in and the former company Apttus is a highly evolving, very dynamic, high growth and competitive market.
Throughout the course of that investment we merged and invested, reinvested a lot of money to merge Apttus and Conga and created now the, the surviving corporation. And over the years, the company did okay. And by our standards, it was producing mixed operational results. Until we partnered with Noel. The transformation that he made to the company is something that is unique. And it's a transformation that cut across all important areas of a business. It's a cultural transformation. It's a transformation around the strategy of the business. It's a transformation around the product and the use case of the business, all while delivering exceptional and outstanding operating results.
It's one of those case studies that shows you what we believe in, which is you can be both the most innovative company as well as the best run company. It's not like you have to sacrifice one for the other. And actually, the two of those principles go really well in hand. And Noel is perfect example of combining strategic leadership with a growth mindset and operating discipline.
So let's hear first from Holden Spaht to tell you more of the story behind this deal followed by his conversation with Conga CEO Noel Goggin.
My name is Holden Spaht. I'm a managing partner. I've been with Thoma Bravo since 2005, so going on 18 years at this point. Commercial operations transformation, which is what I think originally Conga's mission or market was, is really meant to describe all the things that happened when a company is generating revenue, right? A document or, or a PO needs to be generated. You need to negotiate that deal. You need to price the deal. You need to configure it, quote it, sign it, then over time you need to renew it and expand all the things that go into generating revenue for a company; that's what Conga's really the leader in automating.
So, one great customer to talk about would probably be GE Healthcare. So GE Healthcare, $18 billion of revenue, big global business selling mainly, you know, medical technology and medical devices. And before Conga, I think they used 18 different systems to produce a quote, you know, of... The more complicated a sale is and the more products it involves, the longer it can take companies to generate, especially when you have to do it manually. So they have people all over the world generating quotes in different ways, it's taking a long time. So, Conga, when they came to Conga, we've actually consolidated those 18 different systems into one system. And that happens a lot because, if we had, the larger you get, you make acquisitions, maybe you don't fully integrate the ERP system, it takes a lot to integrate all the systems and to do a full front to back systems implementation is costly. It takes time. Although, it's generally a very, uh, ROI enhancing thing for a company.
I mean, they had 18 different products generating quotes for their sales people. And as you know, if, if, the longer a quote takes, sometimes, if a quote takes 45 days your deal is basically dead. I mean, a customer's not gonna sit around and wait. So, what we call CPQ configure price quote system, Conga is the leader at that, and we've, we've taken out a lot of cost and generate a lot of value for GE Healthcare.
So, one of the things that really attracted us when we put together two different companies in the middle of 2020, Apttus, which was the leader in enterprise CPQ, what I just described for GE Healthcare, and Conga, which is really the leader in, I would say, document generation, document management, proposal generation for small and medium size companies, was we need to, to see the companies on the front end as they're growing and getting larger, because a lot of times at Apttus, we were only seeing them after these companies were already huge and Sales Force has been in there. And we're sort of at a structural disadvantage.
And so we said Conga's got, is very tied in with Sales Force. They have the num- I think at the time at least, it was the number one app on the Sales Force exchange, was their composer product which had 9000 customers. And for small and medium sized companies that are just, they don't need a really complicated, there's not a lot of configuration when you're selling products, but they still need to generate sales contracts and have signed contracts, uh, but it needs to be quick, easy, quick time to value, that's what Conga did best. And their composure product specifically.
So, when we bought it they had 9,000 customers, including some of our own portfolio companies, especially in the technology verticals. And now, with all these customers, as they get bigger, and they need more complicated configuration tools and they need more contract repository management, more redlining as the contracts get more complicated as they grow, we can sell them more things and we can kinda grow with that customer. But that's really what Conga, um, did for us.
Putting two companies together that are not insignificant companies, they're both pretty sizeable, and especially emerging two different cultures, and it wasn't like, you know, a lot of times where we made add ons, it's kinda big company buying small company. This was more of a merger. And so in a merger, the people issues are very prevalent. I mean, they are in any software company 'cause it's 70% people, uh, in terms of your asset value, but when you're putting two companies together and, and Conga had a very distinct culture, and a great one, but it was difficult, it was difficult. Of course, both businesses were decelerating a bit.
I mean, just like every business in February, March 2020, so that was also stressful. We were seeing a lot of attrition. I give people credit, it was complex and we were doing it all remotely with people in different places, but we just weren't making enough progress. And it finally dawned on us that we had met somebody not that far, long before this, actually we, we closed another deal called Instructure, which was a learning management system company that take private in March of 2020, so another one done during COVID. And after that, we went, we opened up a CEO search and our original choice for that job was Steve Daly who'd worked with us before. He lives in Salt Lake. He's about a mile from the company. He knew some of the people. He was the obvious choice, and we offered Steve the job, he wasn't sure. He was kinda trying to retire, and so we put him on the board, he didn't take the job.
We went all the way down the line in a search and we were about to hire Noel Goggin, who had come from a lot of different retail softwares operations, really complex kind of environments, and we went all the way down, we were really impressed by Noel and we were about to hire him and then Steve suddenly sorta raised his hand, he had been on the board, said, "Wait a minute. Wait a minute. I really, uh, this looks really good. I think I wanna do this." And we were like, ah, man. We're gonna, what are we gonna do? And, but he was the right, he was the obvious choice. And so, we kinda said okay we'll do that.
But we kinda told ourselves, if there's another opportunity that comes along, we should really look at Noel. And five months later we had something that, to be honest, was more complex than Instructure. And we said, we gotta (laughs), we have to convince this guy. Let's go, let's see if we, what, what we can do. We, we, we didn't do a search, we just talked to him, and, uh, we're so fortunate, and even more so now in hindsight, so fortunate that, that he was our choice.
My name is Noel Goggin. I'm CEO and Cultural Leader here at Conga. I joined Conga in October 2020.
First of all, he's a great guy, okay? He's, comes from Ireland, he was, grew up on an Irish farm.
Was on a dairy farm. The days would start just, it was 6:30 and, uh, it would end about 6:30 in the evening and, including Christmas day, so, uh, um, part of my work ethic comes from my farming background, I believe.
So, he's got this kinda humble demeanor, but it belies an absolute animal inside.
I was a product of the Irish education system, and so did electronic engineering. I think I was always had a big curiosity for the big picture. And that probably served me very well. So I got to travel all over Europe working with some of the biggest companies in the world. Got to go to Asia Pacific in the early 90s, um, also working with some of the biggest telcos in the world and book manufacturers in the world. And that, I would say, really set me on my course to being a, probably a lifelong learner. I'm a very curious person, I like to understand how things work. And, and I've always been, you know, I would say a global enterprise software, uh, all my career. So, that probably set me on my way before I moved to the states.
He's always open to better ideas, even if they're not his. He doesn't need to claim those ideas. Also allowed him, for a company that, to be honest, when we hired him, was not performing very well. He went and hired a world-class team, and I was kinda surprised that he was able to bring all these people in, but he wasn't insecure about it, you know? He's a, he, people like working with him and for him. He works long hours. You know, he works very hard. But it was, I was really amazed at how he was able to build this team when the company's performance would've said, you probably can't get all those people. And they were people that weren't exactly all like him.
I guess I've been a longtime student of cultures, organization design, organization hold. I've been a longtime student and practitioner of the principles, um, Jim Collins describes in his book "Good to Great." Jim talks a lot about discipline people, discipline thought, discipline action. And I, I find that to be a very pragmatic proven framework. And for me, building cultures is the hardest part of the job. Getting people aligned would build clarity, building cohesive teams, aligning the organization in its entirety around a singular focus is, just takes a lot of energy, takes a lot of work. But when it's working well together, it can generate, frankly, really transform the results. And I think when you have clarity on that then people can really realize their potential, both which is good for colleagues and is certainly good for customers. So I've been a, I would say a longtime practitioner. Tried a lot of things, failed on a lot of things, seen a bunch of things, so that's, this is part of my playbook.
He's just impressed me in every way. And it took him, you know, four, five months to get a team together, put together a strategy that makes perfect sense. And it wasn't defensive. It wasn't like, oh, we need to be really careful around Sales Force, which, to be honest with you, we were tap dancing around Sales Force for three years. He came in and said, "You know, we have to respect them. They're a great competitor, but we also have to fight. I mean, we're in a fight and we're just not fighting. So, when you're in a fight, you have to fight back."
He's also turned the financial performance around. You know, he's taken kinda flatish growth to double-digit growth while improving the profitability, while giving us a great strategy that's very clear on what we're trying to accomplish. He's brought in some of the best people I've ever worked with. So, we couldn't be more pleased with Noel.
Up next, my conversation with Noel Goggin, CEO of Conga. Thoma Bravo's Behind the Deal will be right back.
Welcome back to Thoma Bravo's Behind the Deal. Here's my conversation with Noel Goggin, CEO of Conga.
Oh boy. We're back.
Oh boy (laughs).
Noel, when we first connected, uh, myself and you, what were your impressions of Thoma Bravo?
I would say I was very impressed with the fact that the team is such a small team. It's a, it's a, such a tight compact team for me, was also, was, to me it was really impressive because that, for me, is people can move quickly, people can make decisions quickly. You were not in analysis paralysis mode. And I just, frankly I just felt, in the early conversation with you Holden, getting to know you, I, I felt very comfortable that we could actually go on a, a really good, uh, working relationship together. It, it felt very natural and I, I talked to a lot of other people at the same time that didn't feel as natural, so.
Yeah, when we got introduced to you, uh, my, one of my first impressions was, you, you ask a lot of questions.
And I think that is a fundamentally a great thing. I mean, the intellectual curiosity to really ask a lot of questions, and to listen for the answers, not just to ask but to listen, that was one of my first impressions. And then as Noel said, the other thing that, for me was immediately apparent was that he's a great person. And I think it starts there fundamentally. You wanna work with great people. Y-you know, the, the Irish farmer background, the fact that he'd been grinding in all these retail software companies. He's asking a lot of questions. He was listening well. He had a good sense of humor. He didn't take himself too seriously, but he was really interested in getting into the details. But fundamentally, I thought this is a great, this would be a great guy to work with.
Yeah. I think when I, when I take a step back (laughs) and look back-
... in hindsight, it was (laughs), it was more work to be done than obviously we thought, as, as is normal the case when someone comes in. Um, it was probably two focal points initially for me. And there was also a bit of a, I, I, think the team was really a bit overwhelmed. There was so many, so much work to do on so many fronts, so part of it was kinda getting a structure in place and getting, you know, frankly what we said was kinda solidified in core, getting the basics, getting the foundation solid. And once we got the foundation solid, then we could start contemplating more ambition and kinda, how do we grow the business again?
And then, as you're growing the business, how do you start planting seeds to kinda really lead the market. And, you know, for the, the core to solidifying the core for me was really culture.
Especially merging two large companies that were, competed a little bit against each other but were in different geographic locations. And I don't think we had really merged those cultures effectively, or been transparent enough with the employee base about what the culture was.
(laughs) Exactly. At a time where people couldn't connect as human beings in, because of no travel due to COVID. So, you had this kind of pretty complex merger that went on right at the start of COVID. And, you know, it's hard doing that in a, on, on any ordinary day (laughs), nevermind about in the, the midst of where people can't spend time together. And so I've, getting the team anchored on that, and that's what led to the Conga OA, getting a single OA working as opposed to one team's way of working being better than the other team's way of working, so.
And the second thing for me probably in the, the first part of the job was really getting our arms around customers. We had a lot of work to do with customers just to g-give them a reason to have confidence in the future. Give them a, a reason to renew, um, products that weren't, maybe we could've done better quality wise, performance wise. And kind of re anchored them, re anchor the customers. And once we kinda get colleagues re anchored and customers re anchored, then we can start going on, how do we take the company on a business that went from, you know, a collection of point solutions to a platform? From point products to solutions themselves.
You know, so for me, uh, from the start, culture, customers, strategy, clearly was, was needed. And strategy was also needed in context for competition, which was a little bit complex. You know, really well funded, uh, startup companies were getting, uh, raising a lot of capital at a time where growth at any cost was really h-hot in the market. We didn't have that privilege of (laughs) growth at any cost. We had to be more scrappy (laughs), more disciplined, more rigorous on what we did. So, just to kind of thread that needle and navigate that needle, you know, now to a point where we have Conga 2.0 that, you know, we're, we're launching which is, you know, I think it's, it's compelling, it's interesting, it's relevant. It's been a great journey.
I think one of the things, Holden, you did, you know, when I came to you initially, I said, "We need to invest in customer success." And, you know, we, we lowered our EBITDA expectations so we could fund the level of investment we need to do to, to look after our customers better. And that has paid huge dividends in the business itself.
I think, you know, Thoma Bravo, over the years, we've developed so many, we have so much pattern recognition at Enterprise Software. We have so many business metrics. But it's, maybe taken me, uh, a lot of time and a lot of years to figure out that by far the most important thing that we do is put the right person in charge of our companies. And when you do that, a lot of good things start to happen. And then you can become more of a consultative partner to the CEO. And these things can get accomplished, 'cause it's really all about execution, ultimately. And this was a very complex situation industry company, you know?
And so, for a while, once you develop the trust in somebody, and again, it doesn't hurt that I like hanging out with you.
I like talking to you. But I'm really just your... I view myself as your, as your thought partner in this journey. And it's, this company, in particular's probably required more strategic thought, just to navigate a complex industry, a complex product portfolio. And then, once you start to see, and we have started to see the results from the work. This was one of our first full years under your ownership, and we're achieving our numbers, we're growing again, our renewal rate is in the 90s. Not just our retention rate, but our renewal rate, which we had some real customer issues that h- needed to be addressed, and so to see that, this quickly, is something we didn't expect. And so it just shows you that it, we know the company's moving in the right direction and we know we have the right leader. We know we have a great team. So, our job is to continue pushing, coaching, but really, it's to support Noel. You deserve the benefit of the doubt as regard to investment and where we're going as a company.
And so, I just appreciate that we're in, we're in the s- mode now where we're trying to position the company for success for the next five to 10 years. We've stabilized the core. We've returned the company to great metrics. And so, now, Noel, I feel like we're just, you know, you, you ha- you have earned the benefit, uh, of the doubt from Thoma Bravo.
Thank you, Holden. And I think, you know, I would say, I, I use the analogy with, with my wife, this'll be a soccer analogy for, for any Americans. But the, um, the opportunity to work with Thoma Bravo's for me was like getting promoted from the championship to the premiership. So, I think the, the fact that Thoma Bravo's close to the business. You know, I would say, when we started, a lot of discussions were very, uh, I would say, operational. But now, I think we've got a really nice balance of discussions that are on both operational and strategic topics. And that, for me, is, as a leader, you know, h- I always use the analogy, leadership is about playing chess. We always have to be looking about multiple moves ahead. And the more moves ahead we can play in our head, then the less whiplash we'll create in our organization as we make, as we make kind of, you know, little adjustments.
So, the ability to be able to be pragmatic, timely, efficient, just creates velocity in the business. And, you know, one of the things I'm, I'm super grateful for is, for me, a lot of the reasons I came here was, can I play a bigger game? Can I learn from the best? Can we be bolder then together? And, even our strategy in going to the Conga platform, which was, you know, having the bigger broader vision around taking control of our own platform, not being so dependent only on, on Force.com from Sales Force. I mean, that took a lot of, obviously, conviction from Thoma Bravo, and I very much appreciate the, the team's support on that. But that's gone to, for us, uh, open up the aperture for such a broad market for us.
And I, I echo your sentiments of trust. And I've just incredible trust in your judgment, your sense of fairness, the sense of kind of the logic of things to do. And like, it just gives me confidence, frankly. And it gives the team confidence that we can, we can move faster and there's re-buy in.
And I think our firm, you know, we, we believe, and all of our CEOs know this, but we believe in data driven decision making. That's a big, big thing. I've learned a ton from you, Noel. But you always, when you present something, it's always very, very, very thoughtful. It's very detailed. It's grounded in operations. If you start from there, you can have a real debate-
... um, about it and make the right business decision and just like you are, we're always interested in building companies that sustain themselves and continue to grow. And we're growth orientated investors at our core.
We just wanna make sure those decisions are grounded in, in data.
And with you, I've found that they always are. And the fact that you and the team are hitting numbers and have been a great partner to us and, and the investments that you've had us endorse or convinced us to endorse, have shown payback-
... gives you more opportunity.
So we appreciate the thoughtful approach that you've taken to presenting us with options.
Thank you, Holden. And I think, for me, 2023 is, to me is a, is a very exciting year. There's kinda three core focuses for us now. First one is getting our platform launched, deployed, customers on it. And our new pricing model. There's a lot of good things happening with that. Our customers are very excited about the move to the new platform. Um, so that's number one.
Number two is we're gonna continue on the trajectory we have around our customer success, which is, gives us a tremendous predictability into our business, and also gives our customers a tremendous reason why to buy more products, uh, from Conga, uh, and Conga's broader ecosystem.
Uh, and the third thing, uh, for Conga is, we really are lucky, I would say, to have a profitable growth profile as a company. The discipline we have in terms of the allocation of capital, the spend of capital, against things that are showing returns, is really important. We feel very strongly this year that our continued momentum we're building out both the market side, our ability to high prosecute deals, increase win rates, go more up market, increase our average deal size, is all, is all coming at a time when much of our competition are taking a step back. They're doing pretty significant reductions in forces, and many of them need ex- additional capital to continue the, the ability to run their operations.
And we feel this year is an exciting year as we go into, uh, 2024, that Conga has the potential now to continue to gain momentum, or, or flight will move faster, and it'll afford opportunities for us to, you know, do very interesting acquisitions, I think, in the, in the latter half of this year going into next year as well. So, those are probably three things I think, for me, that are, will be very key to setting up 2024.
You know, when we got started together, Noel, I, I thought of our company as this series of products-
... and markets, is kinda how I viewed it, you know? There's contract lifecycle management. We help companies, uh, configure and price and quote their products. Uh, we help companies with their e-commerce solutions. And we have competitors in all these different spaces. And what you and, and the team you've brought in have really helped me understand, I think, is that there's a much bigger game here in the revenue operations lifecycle. I mean, that we should do all of that and own that, and you set us on a strategic journey over the next f- however many years, 'cause it's a huge market and we're barely scratching the surface today.
But when you think of what's more important for a company than generating revenue, growing revenue, expanding revenue, facilitating revenue, pricing the p- I mean, it's... And so, that, when, when the light bulb finally went off for me, when you and your team presented that to us, I realized, this journey is barely, we're just getting started. And that's the most exciting thing for me is it's, we normally, uh, or at Thoma Bravo, we had a lot of companies that compete in medium to size markets with a finite, uh, market expansion opportunity, and we don't have that many companies that are as dynamic as Conga.
Holden, thanks for the, the faith and confidence and the, the, the trust. And, um, I look forward to the, the next chapter of our journey together. Thank you.
Thanks for listening to my conversation with Noel Goggin. If you want to learn more about the work that he and Conga are doing to transform operations for clients all over the world, you can head to Conga.com. Stay tuned for more stories Behind the Deal on our next episode. I'm Holden Spaht. Thanks again for listening.
Thoma Bravo's Behind the Deal is produced by Thoma Bravo, in partnership with Pod People. Stay tuned for more stories Behind the Deal. I'm Orlando Bravo. Thanks for listening.
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.