How Copado Grew From 30 to 340 People and Reached $40M in Revenue in Two Years (Interview with CEO Ted Elliott)

Introduction and Jobscience Background

Nathan Latka

00:00Hello, My guest today is Ted Elliott. If he sounds familiar, because he was on the show a while ago building a company called Jobscience. He's since launched into a new DevOps tool that he is building called copado.com. Ted, you ready to take us to the top?

Ted Elliott

00:12>> Yeah. Thanks so much. Glad to see you again.

What Happened to Jobscience

Nathan Latka

00:14What happened to Jobscience?

Ted Elliott

00:16>> I think, like, a couple weeks after I saw you or talked to you, 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. And I I tried 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

00:39>> ever done. But at the time, it didn't seem seem like I was I I didn't think I was hip enough to be a miner. So, I had to find something else to do.

Nathan Latka

00:47I love that. Well, it's funny because I wouldn't say I'm close with Art, but I've certainly been visited his office. I saw his band play. I was very close with Bullhorn and sort of how he went through giving up 60% of the company and then getting it in 1999. Anytime I interview an HR tech person, ping him and Collin Day at iCIMS and say, Hey, you guys should buy these guys. So, it was fun for me

01:07to see the news that Jobscience was acquired by Bullhorn shortly after our interview last time.

Ted Elliott

01:11>> Yeah, and the six months I had between Jobscience and Copado were really, really helped me figure out what I wanted to do with my time. And 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

01:28>> a shock to the system. Turns out my wife had a heart attack.

Nathan Latka

01:32Oh my God.

Ted Elliott

01:33>> 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 there's real consequences. So anyway, that's why it was a rough six months, but I'm

01:56>> glad it's behind me.

Nathan Latka

01:57You did this effectively, though, in terms of capital perspective. I think when you came on, you told me you'd only raised $3,000,000. Right?

Ted Elliott

02:03>> Yeah. No. So it was a great financial exit, 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 started off at Copado as a board member and advisor and investor, and then was asked to join the company by the founders and the investors. So it's a very different journey than last time in my perspective and my approach.

02:32>> It's just a lot of learnings from that last experience.

Jobscience Exit Multiple and Financials

Nathan Latka

02:36Yeah, I wanna dive into Copado, but I wanna close the book officially on Jobscience. You probably can't share the actual cash acquisition number, but can you at least maybe share the multiple on revenues? What multiple did you see?

Ted Elliott

02:48>> Yeah. So, that business was growing at 30%, and 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, it was a good exit.

Nathan Latka

03:05Yeah. No, that's great. I mean, I think when you came on, you said you guys were doing like something like 18 15 or 18,000,000 or something like

Ted Elliott

03:10>> I think when we sold it, we were doing more like 25.

Nathan Latka

03:13Yeah. I mean, look, $75,000,000 exit where your guys and your family and close friends are owning 70%, that's a great business. So it took a lot. So now let's go to Copado. It's gotta take a lot. You've got cash now to 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?

How Ted Got Involved with Copado

Ted Elliott

03:32>> So two weeks so the deal I cut with Art was that within two weeks, I could leave and never look back. And so 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 wanna

03:55>> come 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.

04:04>> 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 us advice and we get to know you. So then the entire rest

04:26>> 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

04:50>> deal? And they're like, it's a great deal. But we think this was in 2018. And they said, but we think this is gonna be really big. And I'm like, I think it's gonna be really big too, and I think you guys are crazy. And they're like, Well, yeah, we're gonna They said, Instead of taking the money, we're gonna take a round of investment from Insight, Salesforce Ventures. They're like, If you wanna be in it, there are

05:14>> a couple other guys. One was from DocuSign, one was from Velocity. So we all threw in and invested in the business. And at that point, had no plans on joining the company. I was just gonna be an active board member.

Nathan Latka

05:24That was a $7,500,000 round, something like that, right?

Ted Elliott

05:27>> 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 execute their North American plan.

05:38>> And it sort of just evolved from there. And

05:44>> about two board meetings later, 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, I'll only do this if I'm in charge. All right, 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,

06:07>> 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.

06:13>> And I said, Great, come on board. And so we started off and my whole plan was to hire as many people as quickly as possible and spend that $7,500,000 as quickly as possible to show that we could scale. And I think when I walked in the door, we had 4.25 in ARR. And we took it from 4.5 to 15,000,000 in the first year. We went from 30 people in Spain to about a 100 people in The

06:44>> US and Spain. I got diagnosed with stage three rectal cancer, my third month on the job.

Nathan Latka

06:49Oh gosh.

Ted Elliott

06:50>> And was told that I was gonna die. And 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?

Nathan Latka

07:03Have you beat it?

Ted Elliott

07:04>> Yeah, beat it. I did 12 rounds of chemo and radiation and four surgeries. 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 colostomy bag that I had to wear for four months. And I can tell you, have probably, well, I shouldn't go there. I've had a lot of cameras inside me and you just

07:30>> don't wanna know how they got there. And so it really for me was a life changing experience in a lot of ways in that the Bullhorn thing 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. And I really came to this honest moment where I was like, I work because I love to work. I love

07:57>> 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 wanna make sure that people don't have to suffer through bad releases. That really bugged me. I hated that. And so that, and then I started saying, okay, what am I gonna be grateful for today? Like, what is it that makes me happy? And I'm like, biggest thing that I loved about Copado was

08:21>> I was able to recruit like 15 people from Jobscience who quit what they were doing, and were like, we wanna 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 wanna tell you, we never got to say goodbye

08:39>> when you went to Jobscience, but you giving me a job at Jobscience changed my life and my family's life. And that's when all of 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. And, you know, COVID hit literally

09:02>> 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, just in case, hopefully you never have to experience it. I make a lot of poop jokes, but 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 you know, Fonz's office. So

09:30>> it's just been a series of experiences I never thought I would have, but I've enjoyed every moment of it. And right now, Copado is at 40,000,000 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 $111,000,000 and we're crushing it. And I am having more fun than ever. I How many customers, Ted? Well, we do something really interesting. We only focus on

09:58>> the top 5,000 buyers of Salesforce in the world. And right now, we've penetrated 400 of them. Okay?

Nathan Latka

10:03I love this. So you've defined the pool you wanna fish in, and now it's clear how you can go monopolize that pool because it's so obvious.

Ted Elliott

10:11>> 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? I'm

Nathan Latka

10:17kinda What about the top 5,000, what was it again?

Ted Elliott

10:20>> It's the top 5,000 buyers of commercial, of enterprise software in the world.

Nathan Latka

10:24Okay, how do you get that How do you get that list of customers?

Ted Elliott

10:27>> Well, I can't yeah. Let me just put it this way. There's a way to get it 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. Chennai, Bangalore. Bangalore is the capital. We so my really

10:55>> close friend and colleague, this guy Sanjay Gudwani, who is our COO, 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, 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 onto something. And that's the fun part of it. It's like, we've

11:17>> got the money to go run any play we wanna run. We can place big bets. It's so different than when it's founder bootstrapped. And I could have never done this without art, basically freeing me from Jobscience. And it wasn't that I love Jobscience. I loved what I did, but I'd done it forever. And six months in the desert thinking about what I wanna do next, I was like, what did art do right?

Nathan Latka

11:41I did I do? Because you guys have Jobscience was, you launched in '99. So I mean, when you say

Ted Elliott

11:45>> Yeah, and we pivoted forever. We pivoted like three times. And in fact, a lot of the guys I hired at Copado, I knew from Salesforce. The guy who sold me Salesforce when I was at Jobscience is now running my sales team.

Nathan Latka

11:59That's right.

Ted Elliott

11:59>> Okay? The guy who I went and did the first pitch at Kelly Services with Jobscience 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 nineteen 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. You wanna get involved? I'm like, Here's kinda where my life is. And we

12:20>> also did this other crazy thing that I would have never done at Jobscience, which is we started off with a very clear mission, which was to make release days off sleep. What does that mean? Means from 6PM to 6AM, no one should have to be at the office trying to deploy software, right?

Nathan Latka

12:35So you're backing like continuous integration teams or what?

Ted Elliott

12:37>> Yeah, yeah, well just know, like when you go to do a Salesforce deployment and it goes wrong, you were up there all night. Yeah. 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 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 COPPA value

12:57>> 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 so, having had cancer, and saying, I just wanna deal with bullshit in my life. Having had my wife had a heart attack, so she's like, gotta 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,

13:21>> guess, on your podcast, but

Nathan Latka

13:22You you can imagine can say whatever you want.

Ted Elliott

13:24>> I was like, fuck it. Let's go big or go home. And so that's the fun part. Now, I don't know where it's all gonna end up, but

Funding Rounds and Valuation

Nathan Latka

13:32Ted, let me get them because I know you could keep telling stories. You're a story.

Ted Elliott

13:35>> Sorry. I'm just You could great

Nathan Latka

13:36You 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 $7.58000000 bucks. You are participating as an angel in that round. What was the valuation in that round? Do you remember?

Ted Elliott

13:48>> Yeah. That that valuation was 35,000,000. Okay.

Nathan Latka

13:51Got it. So you went in there and then I believe you guys recently raised 96,000,000. Is that right?

Ted Elliott

13:56>> Yeah.

Nathan Latka

13:57What was the valuation on that?

Ted Elliott

13:59>> I can't tell you, but it's at least more than 10 times what the first one was.

Nathan Latka

14:03Okay. Got it. So so I mean I mean, are you guys flirting with or close to a billion or that's gonna take another year or two?

Ted Elliott

14:10>> No. We we have our I get calls, multiple calls a week of people who will offer us a unicorn valuation today.

Nathan Latka

14:19Yeah. Well, I mean, if you raise 96 at 10 x 35,000,000, so 96 on my

Ted Elliott

14:23>> I didn't say it. Yeah. So, I mean, the post was even more than that.

Nathan Latka

14:26Okay. Got it. So post money way north of 10 x. I mean, so that's sort of standard, right? You're selling something between like

Ted Elliott

14:31>> And that was in eighteen months.

Nathan Latka

14:33Yeah. You're selling something between 15 and 20% of the business. Yeah. What do you mean that was in eighteen months?

Ted Elliott

14:38>> 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 300,000,000 or 3, it was exceeds €320,000,000 in eighteen months. And I was like, are you guys like high? And then it was so fun when we closed around because they're like, you actually did

15:00>> it and you exceeded. And I said, well, hey, I think we're gonna double revenue. And what was funny is last year during COVID, sorry, there's someone who's, I'm in New Orleans and someone's blowing their weeds on the side, we

15:14>> kept on talking to people and every time we got on the phone, we had like doubled the revenue again.

Revenue Growth and Customer Expansion

Nathan Latka

15:20Mean What was that doubling? So if you're at 40 run rate today, where were you a year ago? 13,000,000?

Ted Elliott

15:25>> So we were at 15, so a little less than, yeah. After this first quarter, we're growing 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.

Net Revenue Retention and Gross Retention

Nathan Latka

15:46Got it. Well, can you quantify that?

15:49So what is expansion revenue, like percentage wise over the past twelve months? Like 100%, 80%, 50%?

Ted Elliott

15:55>> So we're running a 140% plus net revenue retention.

Nathan Latka

15:59What's the gross to go?

Ted Elliott

16:00>> Yeah, well, I mean, we're holding onto about 90% of the logos

16:06>> we're 95% of the revenue. And then we're upselling another 55% on that. On average, our customers come back on average within eight months and buy a second set of products from us that are about 40% of the first sale.

Nathan Latka

16:21Yeah, that's world class. I probably shouldn't

Ted Elliott

16:22>> 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.

Team Size, Engineers, and Sales Reps

Nathan Latka

16:28Yeah. No. It's it's these healthy numbers, Ted. 140% even in a public SaaS. That I mean, that's world class. Zoom is up on that that world. Know, ZoomInfo is in that world. So real quick, on your team, 340 total today, how many engineers?

Ted Elliott

16:42>> 50.

Nathan Latka

16:43Okay.

Ted Elliott

16:44>> 50.

Nathan Latka

16:45That's good. Now, how many quota carrying sales reps?

Ted Elliott

16:46>> 51.

Quota Structure and Sales Compensation

Nathan Latka

16:47Interesting. How do you set quota? Is it like a million dollar quota target or how do

Ted Elliott

16:50>> I take your salary and I'm like, eight times base is your first year with the three month ramp.

Nathan Latka

16:56I love that. It's so clear. Founders can answer that that clearly.

Ted Elliott

17:01>> Well, I'm just like, I don't have time to find. So I bought everyone chess clocks for Christmas. They report to me, and they're like, Why did you buy us these chess clocks? And it's like, Time is running, and if you make no decisions, you die. And I go, you know, I live this. I remember I'm at MD Anderson, they're like, Do wanna sign this thing to say that you're okay taking poison? I'm like, well, what's the

17:23>> choice? Die? I'm like, just give it to me. Let's get going. Start pumping What me with a

Nathan Latka

17:29if I join you today as a sales rep, what is my first year salary gonna be if I hit quota?

Ted Elliott

17:33>> If you hit quota, you'll make like 300.

Nathan Latka

17:35Got it. So I'm gonna be making I'm gonna be bringing in eight times that in terms of ARR. Yeah. Yeah. Interesting. Very interesting.

Ted Elliott

17:42>> No. No. You're gonna be you're bringing in you'll bring in about four times that because it's eight times your base and it's a fifty fifty.

Nathan Latka

17:49I see. I see. Interesting. Interesting. Love this model. Okay. Cool. Anything that I should have asked about that I didn't?

Go-to-Market: Smokey and the Bandit Play

Ted Elliott

17:56>> 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 Smokey and the Bandit is.

Nathan Latka

18:05I was born in '89, I got no idea what So, you're talking

Ted Elliott

18:08>> if you've ever seen Burt Reynolds in Smokey and the Bandit, it's a story about moving beer from Georgia, from Texarkana to Georgia. It's a 1970s cult classic. And in a lot of ways, we were 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 if you just listen to the song Eastbound and Down, I'm sure you can

18:31>> find it on YouTube, and it will play a little video of what Smokey and the Bandit is. 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 gonna be a sales and marketing focused organization, but we never sell anything to anyone, we only show them how it

18:52>> 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 that I, actually Jobscience wasn't my first company, it was my third company that I had been involved with starting.

19:06>> It was fun, but we didn't do it for fun. We did it because we thought we could build something that was gonna be, you know, that we could sell to someone. This one is like, 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 wanna solve this problem. And I think that if I had realized that when

19:25>> I was at Jobscience, we may not have sold Jobscience to Bullhorn, we might have bought Bullhorn. Because we would have been on this holistic mission of who gives a shit. And 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 love yourself first and then go out and give. But that's of, that's this new place I've been at. And

Personal Reflections on Cancer and Purpose

Ted Elliott

19:50>> 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 and fish, and I was a steak eating monster. And honestly, I love being here. So Nathan,

20:13>> I know we're out of time, but I just wanted to have a follow-up with you because I was excited last time I talked to you. Hopefully, someone doesn't call and 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.

20:27>> Maybe that's what it is.

Nathan Latka

20:28You come on the show, you get multi billion dollar acquisition offers. It happens.

Ted Elliott

20:32>> Yeah. Yeah.

20:33>> Anyway, 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.

Nathan Latka

20:40Well, Ted, the show doesn't work unless you come with these stories. So I wanna thank you for being so open and guys, we'll we'll take it on there. Ted Elliott, 1999 launched Jobscience, grew to $25,000,000 run rate, kept 70% of the business. Him and his family ended up selling that for more than a three x multiple to our friends. Art popped us at private equity backed Bullhorn. He did that, call it, a year and a

21:00half, two maybe sorry, two and half years ago ish. Ultimately, ended up getting involved with DevOps tool, Copado, making Salesforce deployments finally stress free. He joined the company. He was doing 4,200,000 in ARR back in '20 It's now doing over $40,000,000 in terms of run rate. They're serving over 400 customers. The team has 340 people, 50 engineers. Last round valuation, they raised $96,000,000 at north of a $350,000,000 valuation. He's growing. We're having fun watching. Ted, thanks

21:27for taking us to the top.

Ted Elliott

21:28>> Alright. See you later, man.

Nathan Latka

21:31One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it. And the buyers try and make a deal live. It is fun to watch every Thursday, 1PM

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