This episode of Beyond the Deal features a conversation with Thoma Bravo Managing Partner Holden Spaht, Thoma Bravo Partner Brian Jaffee, and Instructure CEO Steve Daly.
AIR DATE:
June 26, 2025
LENGTH:
14:28
DISCLAIMER:
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 of any Thoma Bravo fund.
Transcript
[DISCLAIMER]
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 considered as an offer to solicit the purchase of any interest in any Thoma Bravo fund.
HOLDEN SPAHT:
Steve, good to see you again. Always great to reconnect. For those listeners who may have missed Behind the Deal last week, can you give us a quick high-level overview of Instructure?
STEVE DALY:
Sure. Instructure is the company that makes the Canvas learning management system, where we provide the core technology foundation for teaching and learning, and particularly remote learning. About 60% of all U.S. higher ed students use Canvas, and about a third of all school districts use Canvas. We — our vision is to not only be that core infrastructure, but also all of the pieces that touch that — turn that into a platform that will enable teaching and learning for a learner wherever they're at — whether they're going through the traditional learning process or they're maybe going to work after high school and coming back and retraining or whatever that path is for the learner, we wanna be there for them along that way.
BRIAN JAFFEE:
Steve, let's transition to talking about you now. So, I understand you studied mechanical engineering and you actually used to design HVAC and plumbing systems for commercial buildings before getting your MBA. Maybe talk about how that influenced you coming into your business career and as a leader.
STEVE DALY:
You know, my entire education journey was, was pretty, pretty interesting in that I really didn't know what I wanted to do when I went to school. I think I changed my major like six different times and then I started as an engineer and did plumbing design for commercial buildings. One of the things that I learned early on in that career was we would design systems for commercial buildings, usually for tenants that were moving into those commercial buildings, and we had one tenant that — it was a big high rise and it was in Portland, Oregon — and we were, I was designing all of the systems, plumbing and HVAC systems for the locker room and the workout rooms that were there.
And so I went through that process and I — you know — in the showers, I spec’d this shower head. And one of our guys that I worked with, who was a designer, actually worked out at that place. And so, he came in, it was probably six months after I had done the design and they built it out, and he came into my office and he said, “You know what, those shower heads suck. And he was like, I try to adjust them and it's super loose and it doesn't work.
And that was terrible.” And what it kind of helped me recognize was, you know, I was very focused on, you know, did it meet all the specs, right? Did it have enough flow? Did it have – you know – was it a big enough head? All that, all that kind of stuff. But I hadn't really thought of it from the user's perspective.
So when I, you know, really started me thinking differently about it. I wouldn't just look in the book and say, “Oh, that looks like a good one.” Right? I'd go actually experiment with it and see it in other places and it's really helped me, you know, particularly in software, right, to understand that you've always gotta start with the end-user experience. You gotta understand how that person that you're trying to solve the problem for is going to experience this. And so it was kind of one of those seminal moments that I've been able to apply to a lot of different areas in my career.
BRIAN JAFFEE:
Yeah, I'm gonna let you ask Steve this next question.
HOLDEN SPAHT:
Well, they're probably tied together.
BRIAN JAFFEE:
They're tied together.
HOLDEN SPAHT:
There’s something about career hurdle, but I don't remember this, Steve, but someone has told me that when you worked for Intel for 10 years after getting your MBA, and you were actually fired and the reason why involves Lord of the Rings, question mark? Now, I don't — again — I dunno if you omitted that from your background. I don't know if we missed that or if you missed that, but I would say, you know, I'm interested in learning more about that. And I also would say from personal experience, sometimes you learn a lot more from failures or than from successes, right? But maybe tell us what happened and what you learned.
STEVE DALY:
Yeah, no, I didn't bring that up in the interview, I don't think. So I was at Intel, and like I said, I'd been there for 10 years. And this was before streaming was really big. And the Academy that does the Oscars, right, they would send out these disks of movies for the year to people that would judge them, right? The judges. And somehow a friend of mine got a copy of one of those. So this was — Lord of the Rings had come out — there wasn't yet out on DVD. There was no streaming service, and he gave me a copy of it and so I took it in, and I gave it to one of my employees. My employee ended up uploading it on a shared server so that everybody could download it and then it took down our segment of the network for Intel. So they traced it back, the source of the DVD was me, and so they fired me.
It was really, really hard. I was — I had tied up a lot of my own self worth in what I was doing. I had just been promoted. I was in kind of that, that senior level within Intel, and I was feeling really good about myself, and then it was all kind of ripped out from underneath me. And so, to your point, those are probably the best learning moments for me was when something didn't go the way that I had planned, and it caused me to really think through a couple of things: one is, one, I tied up my self worth in what I was doing, right? And I really had a chance to think, “Okay, what do I wanna be? You know, who am I? And what's important to me? What do I wanna be known as? Is this where I'm gonna get my value or is it gonna be through other things?” And so it causes a lot of reflection. It helped me to really get grounded in what was important to me, and how I wanted to show up, and I recognized that I wanna to be part of a company that's results-oriented and gets stuff done. It really changed, kind of, my leadership philosophy about how to lead. You know, how to do it with a sense of grace and a sense of relationship — the importance of relationship — and it helped me to create cultures that, you know, people want to come work at and not just because, you know, we're going to kill it, but because we actually like coming to work every day and being around the people.
You know, and as I've made choices about my career, a big part of it since then has been who am I going to work with? You know? Do I like these people? Is this a place where, you know, I'm going to spend 10, 10 hours, 10-12 hours a day at, is this what I want to be? And so, yeah, so it was, it was great. You know, somebody told me afterwards — so, so the division that I worked for was called LANDESK at Intel — and I guess I told somebody afterwards, I said, “I want to go – I am going to figure out how to buy this division.” And so I did the startup after that and then I went to — you know — we got acquired by Avacyn and then Avacyn ended up acquiring this LANDESK division that it already spun out of, of Intel, and I came back to run it.
BRIAN JAFFEE:
So you're based in Utah, as is Instructure, and one thing I remember vividly when we originally signed the deal, I think it was the first company that Holden and I had ever had the chance to work with in Utah. And we were — at least I was — so excited, like, “Wow, we might get an opportunity to like have board meetings and maybe ski, do something really fun.” And then the pandemic hit and we didn't get to do that once. So that was a real letdown. But about Utah, maybe talk a little bit about the tech ecosystem there. Because now it's starting to become a lot more well-known, the Silicon Slopes. But you're a big part of that ecosystem. But talk about the business environment in Utah and why it's starting to become a real tech hub in the country?
STEVE DALY:
You know, it is so when I first came here with Intel back in — it was, it was 30 years ago now — we had basically — from a tech perspective — we had some stuff coming out of the University of Utah, some graphics, Evans & Sutherland, stuff like that. And then we had WordPerfect and Novell. And, you know, as those companies kind of went through their lifecycle, and as some of them imploded, they really spun out a lot of really talented people. And so, kind of after the tech bubble crashed, I started to see a lot of people that maybe we've been happy and comfortable in their corporate job at Novell, now, you know, had to go figure out how to make a living and a lot are really creative people.
So I think we're seeing — and at the same time, I was working with a group that was called the Utah IT Association, Information Technology Association at the time, and they worked really closely with the government — the government was, like, very supportive of how do we bring businesses here? How do we diversify in tech because a lot of natural resources here, mining and things like that prior to the tech boom, and the business environment is just really conducive to doing business, right? The government really is trying to keep taxes low, good infrastructure, make it compelling. And then you have that married with this kind of diaspora of talent that kind of blew out from these, these kind of original companies here, and you see you've really seen a — an explosion in the tech opportunities.
Now, it's unique in that, you know, I grew up on the West Coast: Bay Area, Oregon. But the culture here, you know, I think Utah is the number one charitable state in the Union most time and resources that are dedicated to helping others and so what I have found within this ecosystem here is that everybody is really open to just helping each other, right?
There's not this kind of cutthroatness with the different startups and that kind of stuff. Everybody wants to kind of give back to the ecosystem. And there's a little bit of a — we're the underdogs type of culture here where we want everybody to be successful and to succeed and so it really has been fun. And then to your point about skiing, right. I mean the quality of life is amazing, right? I can run 20 minutes from a ski resort. I can run behind my house and there's mountain bike trails run off of those, and you know, if you really like being outdoors, it's a great ecosystem for quality of life too. So it's been fun to watch it kind of explode over the last 20 years.
HOLDEN SPAHT:
Amazing, well, only one more for you here, big man, and we'll let you go. But what's something you wish you'd known at the start of your career?
STEVE DALY:
You know, when I started at Intel, Andy Grove was the CEO, and I looked at those people that were running Intel, right, as I kind of put them up on a pedestal and said, “Wow, these guys are, like, superhuman.” And they were smarter than me, right? They had more experience than me. But I think what I did early in my career was, I think I was intimidated or, you know, I lacked confidence around the senior leadership with an Intel.
So what I really wish I would have recognized is, look, we're all people, right? And some of us have more experience and some of us are smarter. But we're all really just trying to get to the answer. And we're trying to grow the business, we’re trying, you know, we are trying to just do what we think is right, and I wish I wouldn't have kind of idolized, you know, put these people up on a pedestal earlier, because I think I would've had more of an impact earlier in my career. So yeah, I think that was, that's probably the thing, if I were to go back and tell myself that's something, that's what I would say.
HOLDEN SPAHT:
Well, Steve, thank you so much for sharing all these insights and some really interesting learnings there. Thank you more importantly for your partnership with Thoma Bravo for two now — two great successful investments — several board seats. You've been a great partner to us. You're so highly regarded and respected within our firm. We really appreciate the partnership and wish you and Instructure all the best.
STEVE DALY:
Thank you.
ORLANDO BRAVO:
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