Dissecting the Acquirer’s Playbook with Denny LeCompte, CEO of Portnox

In this episode of SaaS Scaling Secrets, host Dan Balcauski interviews Denny LeCompte, CEO of Portnox and a veteran tech industry leader. Denny shares his extensive experience in scaling SaaS businesses, detailing his role in transforming SolarWinds through strategic acquisitions and effective integration. He also describes his journey from academia to becoming a CEO, emphasizing the critical aspects of understanding customer needs and building a coherent go-to-market strategy. The discussion provides key insights into making successful acquisitions and the importance of integrating new companies thoroughly to realize their full potential.

Guest Bio
As CEO, Denny LeCompte is responsible for overseeing the day-to-day operations and strategic direction at Portnox. Denny brings over 20 years of experience in IT infrastructure and cyber security. Prior to joining Portnox, Denny held executive leadership roles at leading IT management and security firms, including SolarWinds and AlienVault. Denny holds a Ph.D. in cognitive science from Rice University.

Guest Links
Denny on LinkedIn
Portnox.com
Portnox on LinkedIn

Transcript

Dan Balcauski: 0:20

Hello and welcome to SaaS Scaling Secrets, the podcast that dives into the trenches with the leaders of the best scale up B2B SaaS companies. I'm your host, Dan Balcauski, founder of Product Tranquility. Today, I'm particularly excited to welcome Denny LeCompte to our show. Denny isn't just the CEO of Portnox, a trailblazer in IT infrastructure and cybersecurity. He's also been a pivotal figure in my own career as he hired me in my first product management role out of business school. He's a tech industry veteran known for his ability to tell it like it is. Equality has served him well in his leadership roles at renowned firms like SolarWinds and AlienVault. During his tenure at SolarWinds, Denny oversaw numerous successful acquisitions and was instrumental in scaling the business from 20 million to over a billion in revenue. Under his leadership, Portnox has evolved from a bootstrapped operation into a dynamic growth oriented SaaS business. Today, Denny joins us to share his insights on scaling businesses, navigating the complexities of acquisitions, and building high performance teams. Let's dive in. Welcome to any of the SaaS Scaling Secrets.

Denny LeCompte: 1:13

Hey, thanks, Dan. It's good to be here.

Dan Balcauski: 1:15

I am very excited. I feel like this one has been a long time coming and I'm sure our listeners will get a ton of value for folks who are listening, who may not be as intimately familiar with you as I am. Can you please just give us a brief overview of your journey in the SaaS world?

Denny LeCompte: 1:32

In the SaaS world I mean, to be honest, I've only been in SaaS for I don't know, seven or eight years. Like, SolarWinds was very much a perpetual business. Everything I did before that was perpetual. But since, pretty much since SaaS became the norm in IT, I've been doing that. We introduced the SaaS product at AlienVault for the first time. And Pretty much what we've been doing at Portnox is turning it from the perpetual businesses started as into a pure SaaS growth business.

Dan Balcauski: 2:03

Yeah, I would love to circle back on those transitions. Cause I think those. Business model, pricing model, transitions from perpetual to subscription are really an interesting area and a place where a lot of folks have struggled and maybe not crossed that chasm. And so you've lived those transitions several times now. If we'll go back to maybe early in your career, maybe even pre career, if someone was. Observing you in a totally non creepy way between like 12 and 18. Would they have noticed anything unusual? Was there anything about little Denny that would portend the career that you've had?

Denny LeCompte: 2:44

No, I think everyone would have thought where I grew up, I was unusual. I grew up in South Louisiana and it's not the most intellectual place, so they thought I was a weirdo. I like to read books. I like science fiction. I, all the things that are kind of cool now were definitely not cool down to value.

Dan Balcauski: 3:02

How does one end up in, from the bayou into a career leading software companies?

Denny LeCompte: 3:08

A series of accidents, I would say, like most people. I ended up I got a degree out of college and then I went straight into grad school in a psychology department, cognitive psychology, although I've learned people think that means that the different kind of clinical psychology, think of it as cognitive science. So I studied, mostly human memory, decision making, stuff like that. And I did that through most of, through all of my twenties, really. And then decided that although that had been my dream, that was not what I wanted to do. And didn't want to spend my whole life as a professor. And so, left academics, really didn't know how to do anything useful, except do experiments. And the closest thing to that is user research. So, I leveraged relationships from Rice, where I went to grad school. And there are a bunch of people who had been doing early usability testing. And they helped me get my first job as a, what we would today, we would call user experience researcher. Back then I think we called it human factors. But from there, I sort of figured out that, software world and then bounce around from job to job. Found out that I just get bored really easily for better or worse. And so I got bored of doing user experience stuff. And then saw what the product managers were doing and thought, well, that seems interesting and Sort of finagled my way into that job. And honestly, I'd only been a product manager for a couple of years when I ended up at SolarWinds. so That's,

Dan Balcauski: 4:48

A, A, B, C, D. Just check the box right into the CEO role.

Denny LeCompte: 4:52

Yes, I certainly at no point up until right before I took the CEO job that I ever think I would be a CEO. But I mostly didn't think I was, so I'm not one of those people, and I assume there are those people who like that as a burning desire of theirs. I was unsure whether I wanted to do this right up until the last minute.

Dan Balcauski: 5:11

Yeah, I was listening I was listening to a podcast the other day and it was, they were talking about Warren Buffett and it reminded me, I'd read his biography, Snowball, and he had a, he started a company when he was like eight years old, like selling, fixing up and selling pinball machines when he was like eight. And then he had like three or four businesses before he turned 18. And I was like, Oh, okay. That's. That's, pretends like a path there. That's very sort of, makes sense for where you ended up.

Denny LeCompte: 5:40

Yeah. I always just wanted to be basically a professor and intellectual. I thought that was been and I still think that was a great life. It just you know, once you've done it, how long do you want to do it? What I've figured out it is a lot more fun to go build stuff. That's what I really ended up loving was go building products with a bunch of people that I like.

Dan Balcauski: 6:03

I want to go back to our time at SolarWinds because I think one of the things that I'm really interested in, I think our listeners would get a lot of value out of this conversation is, SolarWinds did so many acquisitions and I talk about it from my experience. In that, I got to see so many different templates of how companies built products, that we eventually acquired and all the pros and cons that came along with the decisions they made along the way, as we tried to take them and fit them into the SolarWinds go to market model. But, I was just a lowly product manager at the time. And you were actually. looking at a lot of these companies that the acquisitions never even happened. So, I would say you probably saw maybe an order of magnitude more than we we ever acquired. So I was curious, there's probably a lot of listeners who are, thinking about either making acquisitions or potentially looking at in the longterm, how do I make my company an attractive acquisition for maybe a larger strategic acquirer? What were the kind of key factors that you would look at to identify sort of ideal acquisition targets In that role?

Denny LeCompte: 7:28

we were very specific and I think partly I ended up doing that because I had been running the product management team. And I think leadership realized that I knew our customers pretty well and I knew what, I at least had a theory of why our products worked. And so when we started looking at things, because we had done, they had done some acquisitions early on, some of which worked and some of which didn't. Didn't but we developed a pretty specific theory. A lot of it, and I think this is not just true of SolarWinds, this is true of everyone. The most important thing is, are you acquiring something that you can sell to your existing buyer? Because over the years at SolarWinds and then at other companies, I would say the hardest thing to do is to try and stretch to a new buyer, even if they are right next to you, adjacent to your current buyer. They're not the same person. So selling to somebody who's always already shown a propensity to give you money is probably the surest path. So it needs to be the same buyer. It also needs to be something that your current sales team can sell because it has to kind of make sense. Like we looked at things, we had. I always thought, our flagship product, if that is the Big Mac, what are things that I can sell with the Big Mac? You can't get another Big Mac. Like you can't, because customers that's not going to do as well. So what we tried to do was buy things mostly for the first few years that could just tack on to what we had and that the sales team could sort of flash it To an existing customer or to a new customer, like, Hey, we also have this thing now that we just would relabel SolarWinds, whatever. And and that would just, we would take a company that was doing, let's say 10 million in revenue. And it would within a year be doing 13 to 14 million in revenue simply because we put it into our machine. And you had to think about the whole machine, the whole funnel. You had to think about. Can my kit, will it fit into our marketing model? Will it fit into the sales model? And SolarWinds was very specific. It was a high velocity model and the product had to be simple enough that the product did a lot of the work. We would look at things that had really nice businesses, but they required a lot of touch, right? Like you had a different marketing motion where you needed to go and talk to somebody who was like a. VP or C level person and SolarWinds marketing team didn't do that. They sold to the practitioner, to the IT professional. And so you had to look at this and understand. Okay, can this product, regardless of how they do it now, can I just drop it into this marketing model, generate some leads, give it to an average salesperson? Not your best salesperson, right? Like if you have a bunch of salespeople, like you need to think about the average or even the low end. Can this product function with that part of the team? And then think very carefully about your customer. Is this a product that my customer is aware of? Like that they have this need because again, we were fulfilling existing demand. In our model, you had to, you, it was early inbound marketing before they even much called it inbound marketing, but you were waiting for people to start searching for it. So if I don't know that I have the pain and I don't know that I need this product, SolarWinds shouldn't buy it. Could be a great product, could be great for somebody else, but it didn't fit us. Now, if. Portnox is not a high velocity model. We're not big enterprise. We're somewhere in the middle. So if I were buying something. for Portnox, I wouldn't have the same criteria at all. I would know that I need to sell to Network Engineer because that's our guy, like Network Engineer, but I would say, okay, like it could require a little bit of help to get along and you, but we still have an inbound marketing model, so it would still need to be a problem that they're searching for. But it's understanding that funnel and don't, like a lot of acquisitions involve People lying to themselves and telling themselves fantasies about how great this is going to be. And that is why so many acquisitions, I think, go poorly. You have to be just brutally realistic. And we mostly were. We were pretty successful at this, but sometimes, we sort of, the ones that didn't go well were where we sort of papered over the problems. And then those, they there, they were like the shortcomings. We bought a product that did storage and it turns out storage is very hard to manage. And I think you might have touched that product at one point, Dan, and it never quite fit the model because it was much higher touch. You were selling to the storage buyer who is, by the way, not the network buyer. And it, that product just underperformed at SolarWinds relative to what it could have done somewhere else because of that. So it's, it to me, it's all, it's basically what we all know. You need product market fit. Well, when you acquire something, are you going to have product market fit in your super specific market, right? That's kind of how I think about it.

Dan Balcauski: 12:52

That's great. So there's, I mean, that was a huge amount of ideas there that I want to make sure I don't lose track of. So making sure that it's the same buyer making sure the sales team is able to sell it making sure in that case, well, in that case, the Solar was specifically that it was inbound, need so that people were actively searching for it because that was how the sales and marketing machine worked and then. Making sure that it also didn't, was low touch. Because that otherwise would, the end user could not be successful getting the product off the ground, which means they're not going to buy or they're

Denny LeCompte: 13:29

because we didn't have onboarding and we didn't have support. But, just imagine that your marketing model is much more kind of events and high touch and you buy something that's more of a high velocity plate. That won't work either because suddenly your salespeople won't have any use for it.

Dan Balcauski: 13:48

So I'm curious. So about, whether it's a specific example of the product that you mentioned where paper over problems, because I imagine, companies go into an acquisition process, right? Of like, Hey, we want to buy this company. We're looking into the space. Things are, there's obviously some, management pressure and maybe there's some desire from the, the senior leadership team to, to, get things moving. What, do you think happens, either in that specific case where problems are papered over, I guess maybe another thing is what did you guys learn in order to sort of prevent that from happening? Because I imagine, it's maybe not similar, but in many ways, You can make a very similar mistake when you go to hire somebody. You're like, Hey, I want to go hire this person. And they check three boxes. And one of them is like, the fourth box is like, ah, this is a real thing, but they're really good on the other three. And then it, for, the universe proves you wrong every time and says, well, the fourth thing is what means I have to fire this person, because this just obviously is a glaring

Denny LeCompte: 14:45

No, it's a great, it's a great analogy. Yeah.

Dan Balcauski: 14:49

So, so what did you, like, I, I guess, how did you guys sort of, what did you put in the process that allowed you to learn from those mistakes? Like, did you put specific sort of checkpoints or were there like, cause I imagine, right. There's a team effort to bring in a company of several million dollars in an acquisition.

Denny LeCompte: 15:05

A smaller team than you might think. It was me, it was a CTO, and then it was the head of CorpDev. We're kind of the core group that we did we would, we did a lot of screening. Like for every company we bought, I'm sure we talked to 50 companies. And a lot of times you talk to a company, And 10 minutes in, boy, this is totally not for us. And you try and end that call early cause you don't want to waste everybody's time. So part of it is you need to look at a lot of companies and that, I don't know that everybody does that. So you just like with hiring, if you hire the first person you run across and you're like, well, they're mostly okay. I mean, sure. He showed up late and he's kind of. Doesn't seem that well put together but it's going to be fine. Again, you're just lying to yourself. But if you talk to a bunch of people, then you don't get, you're not so dependent on trying to round up somebody and make them work. So we talked to many folks. Back in the, before, before online video got so good, we did a lot more in person things. But it got much more efficient as everybody got access to things like like Zoom, where we could just have a one hour conversation, give me a demo. And that was usually, you see the demo, and if the demo is bad, you're like, well, I think we're done here, right? Or if they revealed in that first conversation that, Oh their product is it's a six month deployment. Okay. That was a deal killer for us. So we didn't get attached to anybody until like, we tried to not bring stuff like that to the boss until it got pretty far along because then you don't want, you don't want people to start getting excited about something that is ultimately not going to work out. Because then they get you, you don't want him and you don't want to get emotional. Like it's again, it's like buying a house too. If you're going to buy a house and you or your partner gets too emotionally attached, like you're going to overpay for that house. You're going to ignore this very serious, expenses that are waiting for you on the other side. So I think it's have a, like don't have a, I got to buy this company. Have an idea of, I have this user, what are some things that user might want? Let me go and canvas the world. And look, if you end up in a company that's got enough money to us to buy something, there is no problem finding people. Bankers and stuff will start introducing you to people because they make money whenever money is transacted. They're hoping some of it kind of falls in their pockets. And so. You usually have tons and tons of people to talk to. You just have to understand your hit rate's going to be really low. But if you talk to 20 companies and one of them is interesting and you can move forward it's a sales cycle. It's a sales funnel. You gotta have a lot of stuff at the top of the funnel. It's.

Dan Balcauski: 18:12

of the volume that Denny is talking about, I think when I was there we were acquiring, so completed acquisitions, probably one a quarter. We're on pace. It was probably three to five a year during the time I was there. So, so you're, for each of those, you're talking to 50 companies. So, you're talking to, you're like, you're doing a lot of shopping

Denny LeCompte: 18:29

It was about half of my job for a couple years. It was about half of everything I did was just doing M& A. But again, it was a really small team and we all talked about all of these and had a clear idea of kind of what we were looking for. But it wasn't a specific company or even a specific area. It was who's our user, could this fit, and then we were, so we were pretty open about that. And again, like we got more right than wrong.

Dan Balcauski: 19:01

Yeah. So there's a muscle and a process and, there was, maybe one was going to be bad, but you were going to, you were going to continually refine the process and it was not about any one specific company. Let me ask this because you said you were on the. Opposite of Zoom or a phone call or in person of a lot of these demos, et cetera. Right. So, if there's a CEO that's listening, that's going to find themselves on the other side of that call from someone like yourself, like, I, did you have a list of notes of like, man, like, These folks really should know this when they come talk to somebody like me. Like, were there any sort of like broad ideas of like, if you're going to have a conversation with a strategic acquirer, like have this sorted before you have this conversation?

Denny LeCompte: 19:44

You should be able to clearly articulate how you make money. That seems obvious, but was surprisingly, you would ask them questions about like, where do the leads come from? Who are your, who do you run into in competition? The question I always ask and do not always get a good answer for is some variation on, well, one day your buyer was not looking to buy anything. And then the next day, he or she woke up and started to look. What happened between those two days? What is the trigger on their end? Dan Balcauski, CEO, B to C, B to C. Or maybe it's an auditor who came in and it's horrified by the state of your security. And the auditor is like, no, you have to do this or we're going to fail you again. So, but there's something that happened and like with monitoring, like we, we did a lot of it at SolarWinds. A lot of times there was a the network went down and they didn't know about it and it was disaster. And so. That very ugly event meant somebody's like, no, you're buying some monitoring software because you just can't happen again. So you should know really basic things like, like, who is your buyer? If you understand that well enough, then you can answer most questions because, what any acquirer is trying to understand your funnel. From the who is your ideal customer to how did they buy? What is the buying motion? The most common answer I get that is useless is like, who's your, who is your ideal customer profile? Right. I think we would all, and people are like it's, there is they're, it's, they're all completely different. Okay. You've just told me you don't know anything about your customer base and I'm going to have to work around that. And so I'll have to try and figure that out. Because you don't know.

Dan Balcauski: 21:42

Oh,

Denny LeCompte: 21:42

not necessarily a deal killer, but it does mean that the buyer, you're asking the buyer to figure you out as opposed to you, you educating them.

Dan Balcauski: 21:52

Yeah. Yeah, that I imagine, and that, that filters through probably the rest of the company. If they can't answer that question for you, they've probably made some unideal decisions all over the place because with that sort of idea in

Denny LeCompte: 22:03

But again, that might be okay. Like sometimes what you want in an acquisition is the technology and the fact that they run their business very poorly is a feature, not a bug because their technology, and sometimes a technologist build the company and they just invest and you'll see, and they'll have like 20 engineers and they built the hell out of the product. And they've got one 24 year old marketer and two salespeople. And they're like, I don't know why this thing isn't selling. And so that's great if you wanted the technology because you are going to pay less for it. Then you're going to put it into your, hopefully better, sales and marketing machine and get more money out of it. So, now if you're looking for them to drive business and they don't know what they're doing, then you shouldn't buy that.

Dan Balcauski: 22:50

so explain how you make money, who's your buyer, and why did that buyer wake up in the morning and decide to go searching for your product? So, that's kind of the three critical questions I heard. Correct me if I'm wrong.

Denny LeCompte: 23:03

Yes it, yeah, when you say it that way, it seems incredibly simple. Well, it is kind of simple to be honest, but again, not everybody. On the sell side knows this.

Dan Balcauski: 23:14

Yeah, it's I, it is not as common to have that knowledge. I've lived it in many lives at this point. You've talked about the acquisition process as a sales funnel. And so, okay we make the sale, we ring the gong, the deal's closed. I find a lot of companies, maybe they're good at buying the company, but then not necessarily good at like integrating it or dealing it with it once it's bought. What is your perspective on, what is the right approach to ensure those Acquisitions actually get integrated successfully. Like what have you seen go wrong? And like, what do you think was some of the things that SolarWinds or other companies you've had have really got right in that regard?

Denny LeCompte: 23:59

Someone's definitely got really good at this. I would say better than most companies in acquisition, because it does start with knowing why the heck you're buying this, because in very large companies, sometimes there's a corporate team and they make decisions and they're like, Oh, this will be cool. And there's somebody somewhere who has a thesis and then they give it to another part of the business. who may not know or agree with that thesis and then that acquisition tends to go sideways because they don't even know why they've bought this. So assuming that you're not a giant sort of let's say Cisco or Huge strategic, like that. Then when you're buying it, you need to know what are you trying to do? Am I just buying the technology? Because if you're just buying the technology, then you should act accordingly. Like SolarWinds was most often buying the technology. We did not place a lot of value on their go to market, so we didn't keep their go to market people around very long. But we kept all their engineers as long as we could, because That's what the product was. It is a bunch of engineers who know how to make it better. And you might want to keep their support people because you got to keep your existing customers that you paid for happy and those people know the product and can solve problems. So I would say one of the things I believe, having seen it so we're going to do it both ways, is that you should get rid of the CEO of the acquired company as quickly as possible. You might want to keep him on the payroll. And use them as a consultant in the background. But if you keep them around, you don't get integration. And I say that believing that the most important thing is that you integrate this new entity into your culture as quickly as possible so that they function as part of the company. Some people will, when we buy this company, we kind of leave them to be their own thing for a while. And. Then they don't integrate because now they feel like, Oh, I've got my whole boss and we still got our culture and we're still doing our thing, but that's great. That's your thing. The acquiring company needs to be as kind as possible, but also don't lie to them. I've once heard somebody tell and I won't name names, but I heard somebody on the SolarWinds side tell this company we were buying, nothing's going to change. I'm like, well, why are you lying to them? Everything's going to change. Of course, it's going to change. We didn't buy them to leave it the same so that when we were successful, we would integrate them. We'd pull the thing apart and say, okay, the engineers now report to our engineering people. The marketing people, if we keep any, report to our marketing people. You pull them into the departments and then teach them how to be part of your company. and do it that way. The longer they stay intact and still think of the old CEO as their boss the less inclined they are to do that. So I think you, you have to get pretty, pretty aggressive and I'm just, I just don't mess around, like get it done.

Dan Balcauski: 26:59

Let me ask you about this, because I've, had, I spent all my time these days in the pricing and packaging role, and it's not uncommon for someone to ring me up wanting to work together. And the problem is they have significant indigestion for, from a bunch of these acquisitions. And what I find when I open up that door is, they've made a series of acquisitions over the last several years. And this particularly relates to pricing and packaging, but I imagine it could apply to any number of different elements of a company where they just sort of. Left it as is. We're like, Hey, we acquired this company and we sort of brought it in. And the rationale there is, Hey, we bought this business. It has a revenue stream. We don't want to break that. And we don't think that right now is the time to mess around with that because we don't fully understand how that all works. And so we're going to wait. But what I found is that there's sort of a critical period. It's like, you've got like, cause then what happens is it lingers and you make another acquisition and they're no longer kind of the primary focus. And so now that just all the, That debt starts accumulating where you haven't made those, you've sort of delayed those harder decisions. And now you've just got this mess. So how do you, how would you sort of address that fear or like, Hey, like we, we bought this, it's got a revenue stream. If we touch it, we might break it. Like, is there any, is there validity to that? Or like, how

Denny LeCompte: 28:25

You might break it. But you know, like if you, I guess I'm not a big fan of fear driven decisions. I would say, we used to say when we bought something that right away we had a free move. We could do something and say, hey, we just bought this thing, we're changing pricing, or we're changing packaging. And we almost always did. Because we said, Oh, everything at SolarWinds is priced a certain way. There was a style to the pricing, if you would. And so we ignore whatever their pricing was and put it in our framework. Because, again, our salespeople knew how to deal with that. Marketing knew how to market that. Like, we, that's why, again, I thought we had to be pretty aggressive and make it look like us as quickly as possible. Because if you go past that free move period, Then, the pricing change becomes hard because all, as all pricing changes are challenging. You could raise prices 3 or 4 percent, no one really complains too much, but if you completely redo the packaging, or you completely change the way, like the thing you count, You're going to anger a lot of people. Some people will be happy, but some people will be upset because they feel they're being screwed. And then you have to decide, oh, do I assuage their anger by grandfathering everybody in? So then my bid for, decreasing complexity is actually thwarted because I've actually increased complexity because I've kept all the old one and I've added something new. Like it's a nightmare. But if you believe as I do, that you get a free move. And you can just say, well, we bought them and we're changing this and people may or may not be happy. And you take a certain amount of risk. And so he, I mean, we would try to make the pricing better for customers. So we didn't, we were sensitive to, well, we're not going to suddenly make everything much more expensive. Cause then that will make people upset. You couldn't make it radically cheaper either because then you're going to lose a bunch of the revenue. So, we mostly focused on trying to make the packaging difference. And there were some winners and some losers, and you tried to make it so that overall it was better. But we had a very strong belief in our in our ability to just grow the thing if we made it look like the rest of the machine. Quick. I can't, like, that was really a big part of what we believed, is we do things a certain way. Yeah,

Dan Balcauski: 30:56

I think a deeper point within what you're saying. I agree with everything you said. I think a deeper point is, people sort of feel like the status quo is risk free. And that's actually not the case. Like there is a cost of doing nothing. And what I've seen is that it's not that like, Oh, over time, we're going to really learn about this business and then have a better view on it. It's like, at some point there's going to be a project there to do it. And you should probably just bake that project in to do it right when you make the decision, because otherwise it's going to be really painful. The longer you delay it doesn't go, the dragon keeps on, eating and getting bigger as you're sort of not looking at it. Right.

Denny LeCompte: 31:32

And I think people believe they're going to learn more over, like, I think most of the learning happens pretty quickly. If you've gotten all the way through diligence, and you've signed the thing, and you don't really understand the vast majority of it, what are you doing? Why are you buying this? Buy it and figure out how it works. Come on. Businesses, I mean, they're not that complicated. If they're very big, then that's a different story. But if you're buying something that's making less than 20 million dollars, like, it, you should be able to understand it in a few days. I'm sorry. Like, it's not that complicated. You don't need all the nuances. And you can figure out what risks you can take. But Pricing does not get better. Nothing, changes don't get better. Like, make all the changes right up front. Kill their website. Change their prices. Redo the packaging. We would try to have all of that done on like within the first few days that the deal closed. So we would do most of the work up front. Now we were probably maniacs about that. Because the goal was to see if we could, maybe, yeah, but we would, we occasionally like would close a deal the day that, we would close a deal on the new product the day the deal closed. That was sort of the un, unstated goal, to see if you could make that happen. Which meant you had to have all the new SKUs into the system, and so you do need a lot of people, and You can't have, I think the other thing is you can't have a separate integration team. That's just crazy. The integration team, everyone will hate that team. That's not how you do it. The right way to do it, in my opinion, is that the people who run this, who run these functions, That's your integration team. The people who run marketing, who understand how, that's who does marketing. The sales leader has to figure out what they're going to do with the sales people. It has to be the functions. Otherwise, some separate team is going to make a bunch of decisions and then they're going to get remade later when it's fully integrated. So you have to have, I mean, it's one of the reasons when we were doing four to six a year, the team was fairly stressed about it because they had to run their existing business and they were like, Hey, we're giving you a new thing. And there, they would just be groans because they're like, Oh God, again?

Dan Balcauski: 33:48

Yeah, I yeah I was, you probably got some of those grodes from my direction.

Denny LeCompte: 33:53

Yeah. Yeah, I mean, but it's I don't think most companies should do what SolarWinds did that was probably, two standard deviations above above normal but for a

Dan Balcauski: 34:04

really is. It really was a unique place in that regard. Like I, I tell people it looked like a software company. It was not a software company. It was like some sort of private equity hybrid thing. I don't know what it was.

Denny LeCompte: 34:13

Yes, it was it was kind of like running our own PE firm on the acquisition side, because you thought a lot about the financials. Like, how is this? How is this going to make the financials look? But if companies don't, like every company should do that to some extent. Again, like the one thing about private equity is that they are very kind of, steely eyed about looking at the facts. This is what the data says. And, like they understand what a company is actually worth. Now, they might lie to themselves about what they can do with that company. I certainly see a lot of that, but they don't have fantasies about, like, this thing is going to change the world. They're like, no, it's growing at this rate. You can change that from, 20 percent to 40%. It's worth this much. There you go. Like,

Dan Balcauski: 35:08

Very

Denny LeCompte: 35:08

has to convert to money. Yeah, Like, if you're buying a company, it can't be, It can't be loosey goosey. You have to really understand what's it going to do for your business and what's it going to be like for the long term.

Dan Balcauski: 35:24

Well, this fascinating thread. I do want to, I do want to shift a little bit into Portnox for the end of our conversation here. So, it's Portnox, cybersecurity space. You've been running this company for what, like two years now, three years

Denny LeCompte: 35:37

It's two and a half it'll be three this fall. And actually, it's a good segue because I ran into Portnox when I was at SolarWinds. We talked to the founder. It was one of the many companies we didn't buy. But I knew the founder from there. And it just didn't fit SolarWinds model. But I thought it was interesting. I thought they had a cool product in there. And so when I started working with Elsewhere, they also knew Portnox. It was a company they had looked at. And we looked at a bunch of companies together. We like to tell, like we kissed a lot of frogs. It was not the first company we looked at. We probably looked at 20. And we got to Portnox and it was, again, it was a bootstrap company. Started in Israel, bunch of ex Israeli defense guys who started the company. And because it's bootstrapped, bootstrap companies can, generally, they only get so big. Like there are exceptions, but generally, if you can't spend to grow, then you can get to. A handful of millions of dollars, and then it gets really hard. They also were not good at marketing or sales. Which is kind of elsewhere's MO is go find a company with a good product and bad go to market, and then acquire them, build a go to market machine, and then grow that thing. And that's kind of what we did with Portnox. But It was very much like what we had done at SolarWinds, except that there wasn't all the SolarWinds and machinery. It was just me and the people I hired. But we understood that we needed to take this bootstrap thing that had just been puttering along and build a go to market machine around this very excellent product. Also, very, what success they had was all in Israel. And Israel is a tiny market in the global scheme of things. And let's take it to North America because they had tried it. But imagine you needed to go and grow a business in Israel. What do you know? Like nothing. I don't, I know nothing. So when the Israelis would try and build it in North America, they didn't have anybody. They didn't know who was good. They didn't know how to hire marketing here, hire sales here. It was hard. And so that's really the value we brought is we built this kind of ready made go to market machine around a great product. And just that from day one, we're just scaling because we already had knew it had product market fit because It had grown reasonably well without sales or marketing. So the product had to be doing the work.

Dan Balcauski: 38:03

I want to ask you, so obviously you've been a senior executive for a long time at other companies in the software space. What surprised you about stepping into the CEO role?

Denny LeCompte: 38:15

Ah, it wasn't a surprise. Like. But it's still, it's if you go to someplace really cold, it's not a surprise that it's cold, but the actual experience of it is still sort of bracing. And it's just how invested, how involved the CEO has to be with sales. Like I knew marketing reasonably well, obviously came out of the product world, but I had never had a number really. And You suddenly have a number. You are a sales guy in some sense, because the board is like, so where are we at this quarter? And so if you weren't interested in sales, let me tell you, you get interested in sales, because you're living quarter by quarter. And I'm, any sales leaders living to the, listening to this would just laugh at me as they have when I tell them this. But it is, it's different because, if you live in the back of the house building stuff. Quarters don't matter that much. Engineering does not work on a quarterly system, right? You have deadlines and you have, crunch time, but it's more driven by what you're building and and longer time scales. You're not like, okay, like it's the end of the month and we're at this number, but we need to be at a bigger number. And so what are we going to do about that? that? is probably the biggest change. When people would ask me, do I like being a CEO? I'm like, where are we in the quarter? Because at the end of the quarter, I do not like it. I don't like it much at all. But if we have a good quarter at the beginning of the next quarter, I think it's great.

Dan Balcauski: 39:43

I heard once that all successful careers ultimately end up as sales jobs. I don't know if that's true, but it seems to be, it seems to be mostly true in my experience.

Denny LeCompte: 39:53

Yes, well the other thing where that's true with CEO is you do spend a lot of time just pitching your company. You're pitching your company to the people you want to hire when you're starting off. Like, I'm going to ask you to leave your job and come work with me, and so I need to convince you. that this company is not a bad idea. Like, or that you're going to enjoy it and you're going to make money and your stock's going to be worth something. So I pitch it there. And then when you have to go raise money, you are 100 percent a salesperson. And so I have an elevator pitch. I have, all those things. I, again, never did sales. Don't know that I'm any good at it. But I can at least be passionate about the company, why I think it's a great opportunity. I can, I could do that in my sleep at this point.

Dan Balcauski: 40:42

I could talk to you all day about this stuff. I, we are running up on time. I want to close out with a couple of rapid fire questions. Are you ready?

Denny LeCompte: 40:50

Sure. I'm not going to be very good with lightning questions. I'll just warn you up front.

Dan Balcauski: 40:54

All right. What is the so nobody of any level of success gets on their own. Obviously, I think you're very successful. Has there been a close mentor, leader who's really helped you along your journey?

Denny LeCompte: 41:06

You have, I would go all the way back to graduate school. I know you have an MBA and I think it works differently there. When you're getting a PhD in the sciences, you have a major professor or we would call them an advisor. And that is a very close relationship. So, for years and years, he was very much like a father figure to me, and I would say he taught me, to some extent, I was 22 when we started, and maybe 26 or so when we finished, and so, like, he might have taught me how to be a grown up, but he definitely taught me how to think, and he taught me to be a much better writer than I was when I started. So, I still keep in touch with him 30 some odd years later. I don't think he was thrilled when I left academics, but everything I learned there still kind of informs who I am.

Dan Balcauski: 41:57

Do you recall about the writing thing that you mentioned? Do you recall any specific advice he gave you on how to improve your writing?

Denny LeCompte: 42:04

Oh no, he didn't give me advice he gave me criticism because I would write and then he would rewrite it to be better. The other thing he did is he found out that I was a very fast typist and he was not and so he would dictate his papers to me. Because again, graduate school. is a bit of an indenture. So when he was writing his papers I would type them. Like, and so he's thinking out loud and I'm typing them up and correcting them. And so I just was so deeply involved with his process, and he's a beautiful writer, that I just picked up a lot from him doing that.

Dan Balcauski: 42:40

Interesting.

Denny LeCompte: 42:40

He didn't want to let me graduate because he said I was such a good little typist.

Dan Balcauski: 42:44

Well, well, we're glad you did. If you could, I give you a billboard, you can put anything on it for other B to B SaaS CEOs trying to scale their business. What would you put on it?

Denny LeCompte: 42:53

Know your customer.

Dan Balcauski: 42:55

Know your customers. Love it. Danny, this has been fabulous. If folks want to learn more about Portnox or follow you around the internet any place we could point them to

Denny LeCompte: 43:04

obviously portnox. com and then I'm sure we have a whole bunch of socials that we'll put in the notes, but I don't keep track of that. You can follow me on LinkedIn and we post a lot of Portnox news through my my feed.

Dan Balcauski: 43:18

Awesome. Well, we will definitely put those links in the show notes for listeners. Everyone that wraps up this episode of SaaS Scaling Secrets. A massive thank you to Denny for sharing his journey insights and invaluable tips. For our listeners, if you found this conversation as enlightening as I did, remember subscribe so you don't miss out on future episodes. Until next time, keep innovating, growing, and pushing the boundaries of what's possible.