Copado is a DevOps tool that helps eliminate the friction of Salesforce deployments. With Copado, it is not uncommon to reduce errors by more than 50%, and accelerate releases 80% ahead of schedule.
Nathan Latka sat down with Copado CEO Ted Elliot to get the inside scoop. Key metrics include:
- 400 customers
- Team of 340 people
- $40m run rate
Nathan Latka (00:00):
Hello everyone. My guest today is Ted Elliot. If he sounds familiar, it’s 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?
Copado CEO Ted Elliott (00:12):
Yeah, thanks so much. Glad to see you again.
Nathan Latka (00:14):
What happened to Jobscience?
Copado CEO Ted Elliott (00:16):
I think 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. I tried to decide what I was going to do next and I thought I was going to do Bitcoin mining, which in retrospect looks like that would’ve been the smartest thing I could have ever done, but at the time, I didn’t think I was hip enough to be a miner, so I had to find something else to do.
Nathan Latka (00:47):
I love that. Well, it’s funny, because I wouldn’t say I’m close with Art, but I certainly 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 then getting it back back in 1999. And anytime I interview an HR tech person, I ping him and Colin and say, “Hey, you guys should buy these guys.” So, it was fun for me to see the news that job science was acquired by Bullhorn shortly after our interview last time.
Copado CEO Ted Elliott (01:11):
And the six months I had between job science 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… Shock to the system. Turns out my wife had a heart attack.
Nathan Latka (01:32):
Oh my God.
Copado CEO 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 glad it’s behind me.
Nathan Latka (01:57):
You did this effectively though, in terms of capital perspective. I think when you came on, you told me you’d only raised 3 million bucks, right?
Copado CEO 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, in my approach. It is just a lot of learnings from that last experience.
Nathan Latka (02:36):
I want to dive into Copado but I want to close the book on Jobscience. You probably can share the actual cash acquisition number, but can you at least maybe share the multiple on revenues? What multiple did you see?
Copado CEO 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 (03:05):
Yeah, no that’s great. I mean I think when you come on, you said you guys were doing some 15 or 18 million or something like that.
Copado CEO Ted Elliott (03:11):
I think when we sold it we were doing more like 25.
Nathan Latka (03:14):
Yeah. I mean, look, that’s $75 million exit where your guys and your family and close friends owning 70%, that’s a great business. So, it took a lot. So, now let’s go to Copado. It’s got to take a lot. You’ve got cash now just to jump back into something full time versus do your own thing. How the hell did they incentivize you to get back into the game?
Copado CEO Ted Elliott (03:34):
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 want to have dinner with us?” And I’m like, “No. I’m going to Australia for a month. I’m not even sure we’re coming back.” And “Sure, 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?”
Copado CEO Ted Elliott (04:20):
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 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.
Copado CEO Ted Elliott (04:40):
And they called me in, 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?” And they’re like, “It’s a great deal.” But this was in 2018? And 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 they’re like, Well yeah. They said, “We’re going to, instead of taking the money, we’re going to take a round of investment from Insight Salesforce ventures.” They’re like, “If you want to be in it, 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.
Nathan Latka (05:24):
That was a seven and a half million round, something like that. Right?
Copado CEO Ted Elliott (05:27):
Yeah. And I was just going to be an active board member and help them hire people North America so they could go ahead and execute their North American plan. And it sort of just evolved from there. And about two board meetings later, two founders said, “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.” “But this is our business.”
Copado CEO Ted Elliott (06:00):
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 within Insight , you can fire me. If you two agree, you can fire me. But if the three of you can agree, then I’m in charge.” And they 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 seven and a half million dollars as quickly as possible to show that we could scale.
Copado CEO Ted Elliott (06:27):
And I think when I walked in the door, we had four and a quarter in ARR and we took it from four and a quarter to 15 million in the first year. We went from 30 people in Spain to about a hundred people in the US and Spain. I got diagnosed with stage three rectal cancer my third month on the job.
Nathan Latka (06:48):
Copado CEO Ted Elliott (06:50):
And was told that I was going to die. And I was like, Well, do I want to keep doing this or do I want to just focus on not being here? And I was like, No, I’m going to go for it. Go big, right?
Nathan Latka (07:03):
Have you beat it?
Copado CEO Ted Elliott (07:04):
Yeah, I beat it. I did 12 rounds of chemo and radiation and 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 colostomy bag that I had to wear for four months.
Copado CEO Ted Elliott (07:25):
And I can tell you I have… 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. So, it really, for me, was a life changing experience in a lot of ways. And that the Bullhorn thing made it so I didn’t really care about money. The cancer made it so that I really didn’t care about anything that didn’t give me purpose, that I didn’t love.
Copado CEO Ted Elliott (07:52):
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.
Copado CEO Ted Elliott (08:11):
And then I started saying, “Okay, what am I going to be grateful for today? What is it that makes me happy?” And I’m like, the biggest thing that I loved about Copado was I was able to recruit 15 people from Jobscience who quit what they were doing and were like, We want to work with you again. 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 wanted to tell you, we never got to say goodbye 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 a sudden became really clear to me that I am on a mission to do something I think is meaningful.
Copado CEO Ted Elliott (08:52):
And so that has given me just a tremendous amount of pleasure and really grounded me. And COVID hit literally 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, the Fonz’s office. So, 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 million in revenue after two years. We have 340 people in the company. We’re going to have 600 by the end of the year, we’ve raised 111 million, and we’re crushing it. And I am having more fun than ever and I-
Nathan Latka (09:52):
How many customers, Ted?
Copado CEO Ted Elliott (09:54):
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?
Nathan Latka (10:03):
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 obvious.
Copado CEO Ted Elliott (10:11):
Yeah, I just decide. 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 kind of passed this-
Nathan Latka (10:18):
So what is it, the top 5,000? What was it again?
Copado CEO Ted Elliott (10:20):
It’s the top 5,000 buyers of enterprise software in the world.
Nathan Latka (10:24):
Okay. And how do get that list? How do you get that list of customers?
Copado CEO Ted Elliott (10:27):
Well, I can’t… Yeah, let me just put you 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.
Nathan Latka (10:50):
Jai, Bangalore, Burma.
Copado CEO Ted Elliott (10:51):
Bangalore is the capital. So, my really close friend and colleague, this guy Sanjay Gidwani, 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 and he’s like, “It’s 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.”
Copado CEO Ted Elliott (11:14):
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 founder bootstrapped. And I could have never done this without art basically freeing me from job science. I loved Jobscience, I loved what I did, but I had done it forever. And that six months in the desert thinking about what I want to do next, I was like, what did Art do right? What did he do right?
Nathan Latka (11:43):
Job science was you launched in 99. So, I mean when you say 400 for the –
Copado CEO Ted Elliott (11:46):
We pivoted 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 Job science is now running my sales team. Okay? The guy who I wanted who 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 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’ve 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 6:00 PM to 6:00 AM no one should have to be at the office trying to deploy software, right?
Nathan Latka (12:35):
So, you’re talking continuous integration teams or what?
Copado CEO Ted Elliott (12:38):
Yeah. Yeah. Well just, no, when you go to do a Salesforce appointment, it goes wrong, you were up there all night and people are coming in the next morning and they are ready to fire you, right? And we’re like, we’re going to 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 COPA 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 so having had cancer and saying, I just don’t want to deal with bullshit in 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 podcast.
Nathan Latka (13:23):
You can say whatever you want.
Copado CEO 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 going to end up, but…
Nathan Latka (13:32):
Ted, let me get them, because I know you could keep telling story. You’re a story teller.
Copado CEO Ted Elliott (13:35):
Yeah. Sorry, I’m just having a ton of fun.
Nathan Latka (13:37):
You could tell great stories all day long. Let me capture a couple things from you, though. So, back in 2018, you guys do seven half, 8 million bucks. You are participating as an angel in that round. What was the valuation in that round? Do you remember?
Copado CEO Ted Elliott (13:48):
Yeah, that valuation was 35 million.
Nathan Latka (13:51):
Okay, got it. So you went in there and then I believe you guys recently raised 96 million. Is that right?
Copado CEO Ted Elliott (13:57):
Nathan Latka (13:58):
What was the valuation on that?
Copado CEO 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 (14:03):
Okay, got it. Are you guys flirting with or close to a billion or that’s going to take another year or two?
Copado CEO Ted Elliott (14:13):
No, I get calls, multiple calls a week of people who will offer us a unicorn valuation today.
Nathan Latka (14:19):
Yeah. Well, I mean, so if you raise 96 at 10 x 35 million, so 96 on-
Copado CEO Ted Elliott (14:23):
I didn’t say. Yeah. So, I mean the post was even more than that.
Nathan Latka (14:26):
Okay, got it. So, post money way north of 10 x. I mean, so that’s sort of standard, right? You’re selling something between 15 and 20-
Copado CEO Ted Elliott (14:31):
And that was in 18 months.
Nathan Latka (14:33):
Yeah. You’re selling something between 15 and 20% of the business.
Copado CEO Ted Elliott (14:36):
Nathan Latka (14:36):
Well what do you mean that was in 18 months?
Copado CEO Ted Elliott (14:38):
From the time I joined to the time we closed capital, it was really interesting cause when founders, when I joined the company, the founders said, “Why don’t we set up your equity award based on you getting us to a value that exceeds 300 million or it was exceeds 320 million euros in 18 months.” And I was like, “Are you guys high?”
Copado CEO Ted Elliott (14:57):
And then it was so fun when we closed around cause they’re like, “You actually did it and you exceeded.” And I said, “Well, hey, I think we’re going to 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. But we kept on talking to people and every time we got on the phone, we had doubled the revenue again.
Nathan Latka (15:20):
What was that doubling? So, if you’re at 40 run rate today, where were you a year ago? 13 million?
Copado CEO Ted Elliott (15:26):
So, we were at 15. So, a little less than… Yeah. And we’re, after this first quarter, we’re still growing. We’re growing at a hundred percent 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.
Nathan Latka (15:48):
Got it. Well, can you quantify that? So, what is expansion revenue percentage wise over the past 12 months? 100%? 80%. 50%.
Copado CEO Ted Elliott (15:55):
So, we’re running 140% plus net revenue retention.
Nathan Latka (15:59):
What’s the gross term, though?
Copado CEO Ted Elliott (16:01):
Yeah. Well, I mean… So, we’re holding onto about 90% of the labels and 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 (16:21):
Yeah, that’s world class.
Copado CEO Ted Elliott (16:22):
I probably shouldn’t be throwing those numbers out, but I mean, I don’t care because no one that we’re competing with can pull this off.
Nathan Latka (16:28):
Yeah. These are healthy numbers, Ted. 140%. Even in a public SaaS, I mean, that’s world class. Zoom is up in that world. Zoom infos in that world. So, real quick, on your team, 340 total today. How many engineers?
Copado CEO Ted Elliott (16:39):
Nathan Latka (16:42):
Okay. 50. That’s good. Now how many quota carrying sales reps?
Copado CEO Ted Elliott (16:46):
Nathan Latka (16:47):
Interesting. How do you set quota? Is like a million dollar quota target or how do you call?
Copado CEO Ted Elliott (16:50):
I take your salary and I’m like eight times base is your first year with a three month ramp.
Nathan Latka (16:56):
I love that. It’s so clear. Not many founders can answer that that clearly.
Copado CEO Ted Elliott (17:01):
Well, I just, I don’t have time to… So, I bought everyone chess clocks for Christmas that 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, “I live this. 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 popping me with the poison.”
Nathan Latka (17:29):
If I join you today as a sales rep, what is my first year salary going to be if I hit quota?
Copado CEO Ted Elliott (17:33):
If you hit quota, you’ll make like 300.
Nathan Latka (17:35):
Got it. So, I’m going to be bringing in eight times that in terms of ARR.
Copado CEO Ted Elliott (17:39):
Nathan Latka (17:40):
Interesting. Very interesting.
Copado CEO Ted Elliott (17:42):
Now you’re going to be, you’ll bring in about four times that because it’s eight times your base and it’s a 50 50.
Nathan Latka (17:49):
I see, I see. Interesting, interesting. Love this model. Okay, cool. Anything that I should ask about that I didn’t?
Copado CEO Ted Elliott (17:56):
No, I think that what people don’t realize is that 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 Smokey and the Bandit are.
Nathan Latka (18:06):
I was born in 89, I got no idea what you’re talking about.
Copado CEO Ted Elliott (18:08):
So, if you’ve ever seen Bert Reynolds and Smokey in the Bandit, it’s this story about moving beer from Georgia, from Texarkana to Georgia. It’s in 1970s, it’s called classic. And in a lot of ways we are 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 going to pop out the bushes. So, if you just listen to the song Eastbound and Down, I’m sure you can find it on YouTube and it’ll play a little video of what Smoking the Bandit is.
Copado CEO Ted Elliott (18:35):
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 who we love to work with. We’ve decided that we are going to be a sales and marketing focused organization, but we never saw 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 that I… Actually, Jobscience wasn’t my first company, it was my third company that I had been involved with starting.
Copado CEO Ted Elliott (19:06):
It was fun, but we didn’t do it for fun. We did it because we thought we could build something that we could sell to someone. This one is like… This is my opus, this is the one I’m doing for me. I’m not doing it from 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 Jobscience, we may not have sold Jobscience to Bullhorn. We might have bought Bullhorn because we would’ve been on this holistic mission of, who gives a shit? And I think that is so important and it’s so hard for founders to get to that place of why am I doing this? Am I grateful? In love yourself first and then go out and give. But that’s this new place I’ve been at and I’ll leave you with this.
Copado CEO Ted Elliott (19:51):
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, 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,” but-
Nathan Latka (20:28):
Maybe that’s what it is. You come on the show, you get multi billion dollar acquisition offers. It happened, you know?
Copado CEO Ted Elliott (20:31):
Yeah. Yeah. So, 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 (20:40):
Well, Ted, 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 take it on there. Ted Elliot, 1999 launched Jobscience, grew to 25 million 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 Pop at private equity back Bullhorn. He did that, call it a year and a half, two… Sorry, two and a half years ago-ish.
Nathan Latka (21:03):
Ultimately ended up getting involved with DevOps Tool Copado making Salesforce deployments finally stress free. He joined when 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 is 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.
Copado CEO Ted Elliott (21:28):
All right, see you later, man.