How Copado CEO Ted Elliott grew to $140M revenue and 1.5K customers in 2024.

hello everyone my guest today is ted elliott if you sound familiar because he was on the show a while ago building a company called job science he sends lunch into a new devops tool that he is building called copado.com ted you're ready to take us to the top yeah thanks so much glad to see you again what happened to job science uh i think like a couple weeks after i saw you or talked to you um i had one of our competitors call us up and make me an offer i couldn't refuse and so we sold them the business and i went on vacation uh and i i try to decide what i was gonna do next and i thought i was gonna do bitcoin mining which in retrospect looks like that would have been the the smartest thing i could have ever done but at the time it didn't seem to seem like i was i i didn't think i was hip enough to be a minor so i had to find something else to do i love that well it's funny because you know i i'm i wouldn't say i'm close with art but i certainly been a visit at his office i saw his band play i was very close with bullhorn and sort of how he went through giving up six percent of the company then getting it back back in 1999 and is anytime i interview an hr tech person i ping him and colin day at iceland and say hey you guys should buy these guys so it's fun for me to see the news that job science was acquired by bullhorn shortly after our interview last time yeah and um the six months i had between job science and capado were really really helped me figure out what i wanted to do with my time and uh i have to say it was the worst six months of my life because when you don't know what you're doing with your life it can be really uh you know a shock to the system um turns out my wife had a heart attack because she said that i was stressing her out because i didn't know what i was doing with my life and i don't know if you know this but sometimes your spouses act as an amplifier to your own feelings and so that's when i had sort of this wake up moment of hey i better figure out what i'm doing with my time because uh there's real consequences so anyway absolutely uh that that's why it was a rough six months but um i'm glad it's behind me you did this effectively though in terms of capital perspective i think when you came on you told me it only raised three million bucks right yeah no so it was a great financial exit um and it's really interesting to me how my perspective about business has changed dramatically from when i was scrapping it with my own company to start off at capado as a board member advisor and investor and then was asked to join the company by the founders and the investors um so it's a very different journey than last time in my perspective and my approach um it's just a lot of learnings from from that last experience yeah i want to dive into the product but i want to close the book efficient on job science you probably can't share the actual actual like cash acquisition number but can you at least maybe share the multiple on revenues what multiple did you see yeah so that business was growing at 30 um and you know it was a multiple that was over three it wasn't a great multiple but because the ownership was 70 myself my dad and my sister uh it was uh it was a good exit yeah no that's great i mean um i think when you come on you said you guys were doing like something like 18 15 or 18 million or something i think when we sold it we were doing more like 25. yeah i mean i mean look 75 million exit where your guys and your family and close friends are owning 70 that's a great business so it took a lot so this now let's go to kapato it's got to take a lot you've got cash now just to jump back into something full time versus like do your own thing how the hell they incentivize you to get back into the game so two week so the deal i caught with art was that within two weeks i could leave and never look back and so uh i stuck around at my desk and i would go for these cocktail luncheons at noon and no one would call me and i'd sit at my desk and one day one of my friends called me and said there are these two guys from spain in town they're doing devops for salesforce do you want to come have uh have dinner with us and i'm like you know i'm going to australia for a month i'm not even sure we're coming back um and after i'll come to dinner and we went to dinner and started talking to the guys and they're like we make it so that deployments don't blow up on salesforce and i was like yeah right tell me more right and by the end of dinner i was like can i invest in this company and they're like no you can't invest in our company unless you give it us advice and we get to know you so then the entire rest of the week that they were in san francisco we were basically going to dinner going to lunch hanging out learning about the product and i ended up going to australia and said here's my cell phone number if you need anything call me i'm happy to be a resource for you and they called me and they said salesforce is offering to buy us what do you think we should do and i'm like well is it a good deal they're like it's a great deal this was in 2018. and and they said they said but we think this is going to be really big and i'm like i think it's going to be really big too and i think you guys are crazy and and they're like well uh yeah we're gonna they said we're gonna instead of taking the money we're gonna take a round of investment from insight salesforce ventures they're like if you want to be in it um there are a couple other guys one was from docusign one was from velocity so we all threw and invested in the business and at that point i had no plans on joining the company i was just going to be an active board member that was a seven and a half million dollar round something like that right yeah yeah and i was just gonna be an active board member and help them hire people in north america so they could go ahead and and execute their north american plan and um and it sort of just evolved from there uh and um you know about two board meetings later um two founders said you know we're really struggling to get a foothold in north america we really need someone who can help us and i said okay guys um i'll only do this if i'm in charge all right but this is our business i'm like yeah well i said i need to be in charge you guys can fire me anytime the two of you can agree i go if one of you agrees with insight you can fire me if you two agree you can fire me but if the three of you can't agree then i'm in charge um and and i said great come on board and so we we started off and my whole plan was to hire as many people as quickly as possible and spend that seven half million dollars as quickly as possible to show that we could scale and i think when i walked in the door we had four and a quarter in arr and you know we took it from four and a quarter to 15 million in the first year we went from 30 people in spain to about 100 people in the u.s and spain i got diagnosed with stage 3 rectal cancer my third month on the job and was told that i was gonna die um and um i was like well do i wanna keep doing this or do i wanna just focus on not being here and i was like no i'm gonna go for it go big right how do you beat it um yeah i beat it um i did uh 12 rounds of chemo and radiation and [Music] four surgeries and i just had a follow-up surgery last week that was not related to the cancer but i had a hernia as a result of them poking a hole in my abdomen for a uh colostomy bag that i had to wear for four months um and i can tell you i have problem well i shouldn't go there i've had a lot of cameras inside me and you just don't want to know how they got there um and so so it really for me was um a life-changing experience in a lot of ways and that the bull horn they made it so i didn't really care about money yep the cancer made it so that i really didn't care about anything that didn't give me purpose that i didn't love that and i really came to this honest moment where i was like i work because i love to work i love building things i don't do it for the money the money's great who cares about the money though it's like i'm doing this because i want to make sure that people don't have to suffer through bad releases that really bugged me i hated that um and so that and then i i started saying okay what am i going to be grateful for today like what is it that makes me happy and i like i love the the biggest thing that i loved about capado was i was able to recruit like 15 people from job science who quit what they were doing and we're like we want to work with you again right i remember i was on the gurney at md anderson getting my first round of chemo and i get this text message from this woman who worked for me who works for bullhorn now didn't know i had cancer and she said i just want to tell you we never got to say goodbye when you went to job science but you giving me a job at job science changed my life in my family's life and that's when all of a sudden became really clear to me that i am on a mission to sort of do something i think is meaningful and so that has given me just a tremendous amount of pleasure and really grounded me um and you know covet hit literally uh a month after my last surgery when i was told i was clear and it's amazing when you don't have a rectum your life changes a little and just in case hopefully you never have to experience it i make a lot of poop jokes but um it took me a good six months thank god i could work from home because you need to have your own private office off your private office yeah and uh you know the fonz's office um so i i uh it's it's just been a series of experiences i never thought i would have but but i've enjoyed every moment of it and right now capado is at 40 million in revenue after two years we have 340 people in the company we're gonna have 600 by the end of the year we've raised 111 million dollars and we're crushing it and i am having more fun than ever and i how many customers ted well we do something really interesting we only focus on the top 5 000 buyers of salesforce in the world and right now we've penetrated 400 of them okay i love this so you've defined the pool you want to fish in and now it's clear how you can go monopolize that pool because it's so it's so obvious yeah i just decided i don't like selling stuff to people i like to explain hey this is what's cool about this are you on board um top 5 000 what was it again it's the top 5 000 buyers of commercial of enterprise software in the world okay and how do you list how do you get that list of customers well i can yeah let me just put you this way there's a way to get it um and we've figured it out it's part of our secret sauce we've actually leveraged a ton of ideas from recruitment software in our entire selling methodology we found out that 80 of the world's devops community on salesforce lives in india in one of three cities they go to one of three schools bangalore bangalore is the capital we so uh my really close friend and colleague this guy sanjay guani who is our ceo i said you know sanjay i think someone needs to go to india and throw a training and see who shows up and he calls me from bangalore and he's like it's like a dead concert dude there are people lined up for blocks trying to get into the training center and i was like okay we're on to something and that's the fun part of it it's like we've got the money to go run any play we want to run we can place big bets it's so different than when it's uh founder bootstrapped and i could have never done this without art basically freeing me from job science it wasn't that i loved job science i loved what i did but i had done it forever and and i that six months in the desert thinking about what i want to do next i was like what did art do right yeah job science was you launched in 99 so i mean when you say yeah and we really pivoted we pivoted like three times and um in fact a lot of the guys i hired at capado i knew from salesforce the guy who sold me salesforce when i was at job science is now running my sales team okay the guy who i wanted the first pitch at kelly services with job science at salesforce is now running my sales ops and sales insurance so i've taken all these people that i've collected relationships with over the last 19 years and i call them up and i'm like hey this is what we're doing i'd love to get the band back together do you want to get involved i'm like here's kind of where my life is and we also did this other crazy thing that i would have never done in job science which is we started off with a very clear mission which was to make release days obsolete what does that mean it means from 6 p.m to 6 a.m no one should have to be at the office trying to deploy software right so you're backing like continuous integration teams or what yeah yeah well just know like when you go to a salesforce appointment it goes wrong you were up there all night yeah and and people are coming in the next morning and they are ready to fire you right and we're like we're gonna make that go away that's that's our core mission and then we said okay let's develop some values that will drive us and so we're like okay we developed this thing called the copper value system it's customer success over deliver people are the code which really means our ecosystem is the secret and then always build trust and and so having had cancer and saying i just want to deal with ulcerative my life having had my wife had a heart attack so she's like you got to go find something to do having bullhorn buy my company so i had some money in my pocket i'm just like you know i can't use the f word i guess on your podca casper you can imagine you can say whatever you want i was like it let's go big or go home and so that's that's the fun part now i don't know where it's all going to end up but um ted let me get them because i know you could keep telling stories you're still sorry i'm just you could tell us you could tell great stories all day long let me let me capture a couple things from you though so back in 2018 you guys do seven half eight million bucks you are participating as an angel in that round what was the valuation in that round you remember yeah that the evaluation was 35 million okay got it so you went in there and then i believe you guys recently raised 96 million is that right yeah what was the valuation on that i can't tell you but it's at least more than 10 times what the first one was okay got it so i mean i mean are you guys flirting with or close to a billion or that's going to take another year or two no we uh we have our i was just i get calls multiple calls a week of people who will offer us a unicorn valuation today yeah well i mean so if you raise 96 at 10 x 35 million so 96 online i didn't say yeah so i mean the post was even more than that okay got it so post money way north of 10x i mean so that's sort of standard right you're selling something between like and that was in 18 months yeah you're selling something between 15 and 20 percent of the business yeah what do you mean i was in 18 months from the time i joined to the time we closed capital it was really interesting because when the founders when i joined the company the founders said why don't we set up your equity reward based on you getting us to a value that exceeds 300 million or three it was exceeds 320 million euros in 18 months and i was like are you guys like high and then it was so fun when we closed the round because they're like you actually did it and you would see it and i said well hey um i think we're going to double revenue uh and what's funny is last year during covet sorry there's someone who's i'm in new orleans and someone's blowing their weeds on the side but um we we kept on talking to people and every time we got on the phone we had like doubled the revenue again i mean what was that doubling so if you're at 40 run rate today where were you a year ago 13 million we were so we were at 15 so a little less than yeah and we're after this first quarter we're still growing we're going at 100 plus on new revenue what's really interesting about this business is the number of customers and this is really the sign that you're making customers successful we generated 50 of our new revenue in the fourth quarter of last year on customers who are coming back and buying more got it well can you quantify that so what is expansion revenue like percentage-wise over the past 12 months like 100 80 50 so we're running 140 percent plus net revenue retention what's the gross yeah well i mean we're holding on to about 90 of the labels um and uh we're 95 of the revenue and then we're up selling another you know 55 percent on that on average you know our customers come back on average within eight months and buy a second pro set of products from us that are about 40 percent of the first sale yeah that's world class i probably shouldn't be throwing those numbers out but i mean i don't care because no one no one who we're competing with can pull this off yeah these are healthy numbers ted um 140 percent even in the public sas uh that i mean that's world class zoom is up on that that you know zoom info is in that world so real quick on your team 300 340 total today how many engineers uh 50. okay 50. that's good now how many quarter carrying sales reps 51 interesting how do you set quota is like a million dollar quota target or how do you i take your salary and i'm like uh eight times base is your first year with the three month ramp i love that it's so clear no there you know the owners can answer that that clearly well i just i'm just like i don't have time to so i bought everyone chess clocks for christmas you know there are that report to me and they're like why did you buy us these chest clocks i was like uh time is running and if you make no decisions you die and i go you know i live this um i remember i'm at md anderson they're like do you want to sign this thing to say that you're okay taking poison i'm like well what's the choice die i'm like just give it to me let's get going start pumping me with the poison so if i join you today as a sales reps what is my first year salary going to be if i hit quota if you hit quota you'll make like 300. got it so i'm gonna be making i'm gonna bring in eight times that in terms of ar yeah yeah interesting very interesting you know you know you're gonna be you're reading and you'll bring in about four times that because it's eight times your base and it's a 50 50. i see i see interesting interesting i love this model okay cool anything that i should have asked about that i didn't no i just i think that what people don't realize is that we're we call our current business play the smokey and the bandit play now i know for some of your audience they might not know who's smoking the bandit i was born in 89 i got no idea what i'm talking about so if you've ever seen burt reynoldson smoking the bandit uh it's a story about moving beer from georgia from texarkana to georgia it's a 1970s it's called classic and um in a lot of ways we're drafting behind this big truck called salesforce and we don't think most of our competitors see us coming down the road and we're gonna pop out of the bushes so uh if you just listen to the song eastbound down i'm sure you can find it on youtube and we'll play a little video of what smoking the band it is um i think you'll enjoy it but that's kind of our attitude it's like the clock is running we're always running out of time we're living in the moment we're working with people we love to work with we've decided that we are going to be a sales and marketing focused organization but we never sell anything to anyone we only show them how it works and we're having a lot of fun and i think that's really the key to the whole damn thing is the first company i actually job science wasn't my first company it was my third company that i had been involved with starting [Music] it was fun but it we didn't do it for fun we did it because we thought we could build something that was going to be you know that we could sell to someone this one is like this is the this is like my opus this is the one i'm doing for me i'm not doing it for the money i'm not doing it for anything else except for i want to solve this problem and i think that if i had realized that when i was at job science we may not have sold job science the bull horn we might have bought bullhorn because because we would have been on this holistic mission of who gives a and i i think that is so important it's so hard for founders to get to that place of why am i doing this am i grateful and you know love yourself first and and then go out and give but that's kind of that's this new place i've been at and and i i'll leave you with this i never thought having cancer would be a gift but i decided it was either a gift or a sentence and i wanted it to be a gift not a sentence and that doesn't mean i don't have days when i'm hurting i haven't had a drink in two and a half years i can only eat chicken you know and fish and i was a steak eating you know monster and and honestly i love being here so nathan i know we're on a time but i i just uh wanted to have a follow-up with you because i was excited last time i talked to you um hopefully someone doesn't call make us an offer to buy the company in the next two weeks and you're like what the f ted i thought this was your opus man but uh maybe that's what it is you come on the show you get multi-billion dollar acquisition offers it happens yeah yeah so so anyway um i had fun talking to you last time when you reached out to me i was like hey sure let's get the band back together well ted that the show doesn't work unless you come with these stories so i want to thank you for being so open and guys we'll we'll take it on there ted elliott 1999 launch job science grew to 25 million dollar run rate kept 70 percent of the business him and his family ended up selling that for more than a 3x multiple to our friends art pop us that private equity back bullhorn he did that call it a year and a half two may uh sorry two and a half years ago ish uh ultimately ended up getting involved with devops tool capado making salesforce deployments finally stress free he joined in the company was doing 4.2 million in arr back in 2019 it's now doing over 40 million in terms of run rate they're serving over 400 customers the team has 340 people 50 engineers last round valuation they raised 96 million bucks at north of a 350 million valuation he's growing we're having fun watching ted thanks for taking us to the top all right see you later man one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder 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