Episode 3: Mike Devine of Fortra on
How Marketing Needs to Evolve for a High-Growth Company

Episode Transcript

Shiv:
All right, Mike, welcome to the show. How are you doing today?

Mike:
Doing great, Shiv. How are you?

Shiv:
Good, thanks for being on. Super excited to have you. Obviously, you've been clients of ours for many years. So I'm really looking forward to this conversation and for the audience to learn from all the great things that you've been up to at Fortra. So why don't we start with giving the audience an introduction about you and the business and we'll go from there.

Mike:
That sounds good. Good to be here. It's kind of a nice activity on a Friday, Shiv, in the summer, right? I like it. Yeah, so I head up marketing for Fortra. Fortra is a cybersecurity software and services company. So, you know, we help companies, we protect companies, right? So if you're thinking about sending files and you need them to go in an encrypted fashion, we do that. Organizations are worried about ransomware. They're worried about phishing. We help organizations with that. Organizations are worried about domain impersonation. We can help with those types of things. What about those devices on your network? You know, are some of those compromised? We help with that. So ethical hacking… you know, I could go on and on. I won't, because I don't want to bore you, Shiv. But that's the kind of stuff we do, right? Cyber security, software and services, you know, organizations come to us because they've got to get protected.

Shiv:
And that's not entirely how you guys started, right? So when we started working together, this was a few years ago, and you guys were a much smaller business and you were backed by TA and still are, I believe, and you've grown significantly over time. And so back then you were Help Systems. More recently, you've rebranded to Fortra, but talk about how the purpose and the mission and the message and the positioning of the company has evolved over time as you've grown.

Mike:
Yeah, good point. So the company, we've been around for like 40 years, right? And the company got started really helping organizations on the AS400 or the IBM i or the i series, they've changed kind of their name over the years. We were phenomenal with systems management. And then, probably - I'm going to say - 18ish years ago, we got into securing IBM i and we did such a good job on systems management and security and the customer said, ‘hey, in my environment here, I've got plenty of IBM i but I got all sorts of other stuff. I've got Linux, I've got Unix, I've got Windows, could you help us in some of those other areas?’ So we expanded our offering into automation and security solutions in those other areas. And then as you mentioned, a handful of years ago, our customers were saying, ‘security is keeping us up at night. We're worried, we've got problems all over the place. We like working with you. What else do you have?’ So, not surprisingly, we sit down and say, what could we make or what could we go acquire? And so we set off to acquire a number of cybersecurity software companies that fit our portfolio beautifully. So now, fast forward a handful of years, we are a leading cybersecurity provider. We've put together really the best in the business we feel of cybersecurity solutions.

Shiv:
And that journey has been pretty crazy because it's happened in a very short period of time, right? You've gone from being let's say a few hundred million dollars to a multi-billion dollar business, thousands of employees.

Mike:
Yeah, we're like an $800 million business right now. Yeah, but yeah, we've grown. I know when I stepped in here, I think the marketing team was 20-ish. I think we're about 130 now. I think we were 100 million when I started. We're 800 million now. So yeah, the growth has been significant.

Shiv:
Significant and enterprise value wise is obviously significantly more than that. So talk about the planning around that because it's one thing to, you know, decide are we going to buy or build this thing or increase our product offering? How did you go about identifying those opportunities and then integrating them into your core business? And then how did your marketing organization in particular evolve over that period?

Mike:
Yeah, good question. You know, we were lucky to have a lot of really smart people around here. And one of those is a guy by the name of Scott Cole, and he leads up our M&A activity. And he works hand-in-hand with our CEO, Kate Bolseth, and CFO, Matt Reck. And these guys are really good at looking at companies and saying, ‘let's take a look at the software. Let's take a look at the customer base. could we grow this company? And could - together, could we grow this company?’ And they look at culture quite a bit. So if we look at a company, if they've got phenomenal software, they've got great growth, you know, good amount of customer traction, if we don't think there's a culture fit, we'll walk away because - you know, it sounds cliche, but you know, Shiv, it's like, it's so much about the people, right? Who you're working with day in, day out. Can you get along with these people? Can you sit down and, and really develop a strategy together? So, you know, I've been lucky to work with people, like, like I said, with Scott and Kate and Matt and many, many others who take a look at these companies and say, ‘Hey, we think this is a phenomenal organization. We think there's great growth ahead for this company by putting it into the Fortra portfolio.’ We've got an even stronger offering. And a lot of times our customers would say, ‘hey, we could use data loss protection.’ So when we bring that into the portfolio, we have a captive audience already, if that makes sense.

Shiv:
It does. It does. And I guess that's like the corporate dev side and then identifying the targets. But at some point, you actually end up acquiring a lot of these businesses and some of them are really large companies as well. Right. You talked about a few of them, but companies like AlertLogic and Digital Guardian that in and of themselves are massive businesses, some of them north of 100 million. And so it's almost like digesting this huge organization and trying to figure out how to not break things and also scale and capture the investment thesis that's a part of that transaction. So in terms of your organization as it's grown over time, how have you gone about integrating and bringing those organizations into the fold so that you're still creating enterprise value?

Mike:
Yeah, so, you know, we have a playbook, but the playbook changes, right? And you integrate 15, 20 different companies and they're never all the same. So it's a long process. Like I said, we've got a playbook. We want to, first of all, make sure that the people who are part of Fortra understand the mission, understand what we're about and understand how that acquired company fits in so that's really important, because you know people want to wake up and feel like they're part of something, and so, you know, take Digital Guardian. Hey, we acquired you guys because we have we think there's tremendous Market potential for DLP within our customer base and throughout the market in general. We think, together, we can do great things So as long as they understand that value and how they fit in, they get pretty excited. And then in marketing, we look at, okay, not only have we acquired this great company with great tech and great customers, but we had so much expertise. It's really cool, right? Suddenly, you meet all these new friends and they've got expertise, whether it's in threat intelligence or device management. And then from a marketing standpoint, then you meet great content people, great web experts, people who really know ABM, people who really know product marketing. And so in many cases, what we've done is we have sort of centers of excellence and Shiv, you guys have worked with us quite a bit. You know, we have sort of a designated web performance team that serves all the different product lines. We have a corporate communications team and PR team and things like that serve these different product lines. So if we acquire a company and we see, hey, there's tremendous talent in design, PR, marketing ops, web, then we tend to move those people into those roles and they service the company - the product line they came from, but also others. And so a lot of times that's cool for people because they say, I've got a broader world now. So if I'm a web performance expert and I'm working on SEO and working on CRO, I get to work with the people that I've grown up with from the acquired company, but also others. And now I'm not the only web performance expert, but I work on a team with 10, and we get to share notes.

Shiv:
Yeah, and let's expand on that a little bit because the center of expertise is something that I think you guys do really well. And a lot of organizations are trying to grow to the scale where you are already are, and so go into the details of how the teams are actually structured. You mentioned web performance and corporate comms. What are all the centers of expertise and then what are the products specific teams are working on, what are the distinctions?

Mike:
Yeah, cool. Again, not to get cliche, but a lot of these teams, they work well because we've just got just really amazing people in those teams. So let's talk web for a second. So we've got an established web team run by an amazing woman whose name is Kara Zenk. You've worked with her, Shiv. Kara sees the world that she's got her web dev folks, then she's got her performance people. And what she does with that is those people wake up every day and they're looking at traffic, they're looking at primary CTAs, they're looking at keyword management, conversion rate optimization, all of that. The product line teams knock on Kara's door and say, ‘hey, you know, This, I think we need to increase traffic or we're not getting as many primary CTAs as we feel we need to move down funnel, help us.’ And so, that web is probably the most important of those teams. Does that make sense?

Shiv:
It does. And is this happening across the board with all the different centers of expertise?

Mike:
Yeah, it is. Marketing operations, we have a really good demand gen team run by Jenna Moreau and Sarah Prudhom. So the demand gen center of excellence is - they're looking at ABM, they're looking at paid media, and they are really sort of an in-house agency. So if I'm a product line person, I'll knock on their door and say, ‘hey, I think there's an opportunity to take some of these accounts in our ICP from this segment of the business, put it into our ABM platform, and then push some ads and maybe give some of these intent signals or web signals to our salespeople.’ They help coordinate that. They help manage that. When we're building out these teams, you talked about scale. We're building out the web team. the demand gen team, the PR team, design team, we're always looking at ratios. Like, can we support these product lines? Because these product lines come in and they say, I want my design now, I want my PR now, I want my analyst relations now, I want demand gen, I want web, I want all this stuff. And so we've got to have enough people on those teams and they have to have the skill level to really make an impact. And I think one of the coolest things is they're always sharing, right? So we have a lot of brunch and learns and lunch and learns and ‘hey, what have you found from this product line?’ ‘You know, we're doing this with G2.’ ‘Oh, we hadn't done that. Cool, let's try that’. Or, ‘we're doing this with Sixth Sense.’ ‘Oh, I should try that with these other product lines’. Or, ‘hey, we talked to How to SaaS about some cool things to do with landing pages, make them more consistent with our paid search ads.’ ‘Oh, cool. Yeah, let's roll that out on ours too.’ So they're always talking to each other within the center of excellence to get these little tips, what's working, what's not, and then rolling it out to the product line team.

Shiv:
Yeah, that's fantastic. One of the challenges or things that needs to be figured out in a dynamic like that - and I would love your insight on this - is how are you prioritizing one good idea versus another good idea, especially when you have so many different product lines? How many product lines are you at now? It's like 40. I don't know the exact number, but it's got to be a lot.

Mike:
Well, we kind of categorize it into about eight or nine, but -

Shiv:
And then there's subproducts.

Mike:
We've got a lot of different products. Yeah. And you've helped us on a number of different products, but yeah.

Shiv:
Right. And so there's so many different business areas and then products within each. And then there's revenue targets for each of those business units and products. But then you have these centers of expertise and there's only so much bandwidth. So how are you going about prioritizing those against each other and focusing the team on the right thing at any given moment?

Mike:
Yeah, that's always the challenge, right? I mean, I remember a R&D guy years ago told me, you know, we can do anything, but we can't do everything. And so I quote him all the time because in marketing, I feel we can do anything, but we can't do everything. So we ruthlessly prioritize, you know, you - not all product lines are created equal, not all projects are created equal. And so. Those product lines that have the highest potential for growth are going to get more attention from our web experts, our demand gen experts, and PR, AR, design. Another center of excellence that I failed to mention earlier has been just a phenomenal lever of growth for us is our outside North America team. Oftentimes that's called the international team, but if you're them, they're not international, that's just where they are. And so a lot of those folks are in Europe. We have some people down in Argentina and they're really taking those product line stories and pushing them out in their markets - in some cases, many cases, localizing. And yeah, it's all about prioritizing. So we take a look at, okay, this year of all the different product lines we have, you know, which ones are we looking to grow 25%? Well, guess what? They're gonna get a lot of help from the shared services. Which ones are looking at single digit growth? They're gonna get some help, but not as much. So it's all about bookings. It's all about bookings targets, 100%.

Shiv:
Right. And working your way back. And so that's where your role really comes in, because I would imagine, to get this right, you have to be very closely connected with your CEO and CFO and board to know what is the plan for the year, what are we working towards. And you're bringing that information to the team, and that helps the prioritization process.

Mike:
Yeah, absolutely. I mean, we just have to be aligned, right? And, and you know, you drop a plan - I mean, we all do this, we drop a plan in November, December and say, ‘okay, 2023, we're going to go do this.’ And then, you know, after the first quarter, you say, ‘okay, a lot of these things are pretty cool. They're working. Some of them kind of turned into crap. Let's pivot a little bit’, or, ‘hey, we didn't anticipate this particular market to take off. Should we scale more? Should we add more there?’ Or ‘this area is struggling. should we have a little help there.’ So, you know, there are times where we pretty quickly pivot and say, hey, we need more hands on deck over here because either tremendous market opportunity or, you know, a little bit of a slump. So yeah, I mean, I'm always talking, I was just, you know, we had our international sales guy here yesterday and we were talking about how to prioritize in Europe, Latin America, Asia Pacific, etc.

Shiv:
And so those numbers that are being discussed at, let's say, a senior or executive leadership team level or board level, is that being shared with the internal team as well so that they clearly understand what they're working towards?

Mike:
Yeah, 100%. And the way we get pretty geeky about it, I love it. I'm sure this is music to your ears too, knowing you. But we start out with these targets. And so I'll get a little mathy here for a moment.

Shiv:
Yeah, let’s do it.

Mike:
So we start with a target. Let's say that this product line has a $20 million target this year to go get $20 million of new logo. Great. So then we say, ‘OK, of the $20 million, how much has marketing historically contributed in terms of marketing sourced business?’ And we say, just for simple math, let's say, well, of the 20, history would indicate that marketing can go find 10. And my sales guys would be like, ‘yeah, you're not doing the 10, you're warming up the 10,’ whatever. But marketing can go with the... interacting with the market, we feel the market can go contribute 10 million to that. And then we just walk it back and we say, ‘okay, for 10 million, we know we win about one in three deals, so we're going to need enough deals to put 30 million in the pipeline.’ And if our average ASP is X, we know we sell about one in four. We go backwards. from the win to the SQL to the MQL to the lead. And then we say, okay, to go get this many leads in MQLs, we got to do this much in paid search, this much in organic. We're going to go to these events. We're going to run these webinars. We're going to do affiliates. We're going to do G2, you know, you name it. And this is our kind of program to go get those number of leads that would yield that amount. So -

Shiv:
That will eventually help us hit that target.

Mike:
Right. So. Long, long answer to a short question is everyone should have, everyone in marketing has the bookings target on their monitor. What are we trying to achieve?

Shiv:
And in terms of the targets themselves, how active - because what you just described there is almost like reverse engineering from the forecast, right? But one of the things that we see with our clients is that sometimes you have this top-down forecast that's almost done like this math exercise at a board level and done in spreadsheets. And then you get to the product line level or a particular channel, and it's not even possible to generate that much pipeline based on the constraints of a particular business. How actively are you guys involved in the actual creation of those targets to inform the board or the CFO? Like, here's what's potentially possible for 2023 or 2024 based on what we're seeing.

Mike:
Yeah, so what we do is - I would say the answer to that is sort of a triangulation of the, you know, the sales people are the ones who are out there day in, day out, speaking with the market. They've got a good sense of what kind of traction we have. We also have a tremendous product development and product management team. And you've probably talked to John Grancarich before. He's really good at that. So his team in product management, they'll say, you know, ‘here's the addressable market. Here's how much we think we have of it with the products. Here are some new features we're coming out with, or here are some bundles we're coming out with that we think can drive growth.’ So then, you know, marketing looks at all sorts of data that we have to say, you know - so marketing, sales, and product get together and say, you know, with all the data we have, we think these are realistic targets. And... And then there's always a little negotiation, you know, because the CEO and the CFO want more. But, you know, we've been lucky that by putting together strong growth targets, but are also realistic and backed by some data that, you know, we've had good success. You know, do we crush all the time? Of course not. We don't, we absolutely don't. But we definitely know what our targets are and we all are joined together to say, I think we can go hit this.

Shiv:
And talk a little bit about the people that you have to be in these negotiations with because I know Kate, I know TA and I know all those folks and they're great partners to be in the room with. So how important has that been to get this right? Because in other cases we've seen where just unrealistic expectations are put on companies and that leads to very bad results even if somebody did a good job or rolled out the right programs and work within the budget that they've got. Like there's just not enough of an understanding of what was actually realistic.

Mike:
Yeah, that's a good point. I think again, we've been really lucky to work with some very - I'll call them cool PE firms. I mean, cool in that they're just so supportive, you know. Now, are they demanding? You're darn right they are. And they should be, they've got every right to be, but they're very, very supportive. They want to help us grow. They want to help us succeed. They want to help us do it the right way too, right? So, you know, if we feel that, you know, a particular company isn't a good fit, or a particular person isn't a good fit, and that person needs to be removed, these organizations, these investors have been very, very supportive. And so when we go to them and we say - for example, you know, a year ago, we went to the board and said, we want to change the name of the company. And I was expecting to get, you know, grilled like a fat hamburger, like, show me everything. And they were extremely supportive. I think they saw the vision. I think they saw the opportunity to reposition this company no longer as Help Systems - which was a tremendous name for a different era of the company - but as a new company called Fortra. So, you know, we've just been lucky. They've been very, very supportive. I don't think they've ever, you know, given us a target that we close the door and say, ‘holy crap, what are we going to do now?’

Shiv:
Right. And so that's the rebrand. I'm glad you brought that up because I was going to ask like, what if there's an initiative that's outside the budget where you're like, there's a big initiative that we want to invest in that we need funding for that ROI is maybe not completely clear on. We have some idea that it might work, but maybe it won't. And so how does that process go? And maybe we use the rebrand as the example there to give that give details on it.

Mike:
Yeah, well, I think that's one of the exciting parts about marketing and I would say a nimble business. We develop our plans, we execute our plans, we measure the heck out of those and make changes, but things come up, tremendous opportunity, whether it's with a new channel partner, a new technology partner or a new market that we hadn't planned on. And so, in my stint here, I've been really lucky to work with CEOs who are super supportive. Kate Bolseth, I mentioned earlier, Chris Heim before her. You know, they're not shy about saying, ‘put together a proposal and let's take a look at it’. And then we've taken those proposals to the board. And, you know, in many cases, the board has approved those. So, you know, in-year changes are fine. So the rebrand is one of those. Yeah. So we sat down. you know, about a year and a half ago saying, ‘hey, we're a different company today. Are we - is it HelpSystems 2.0 or is it something else?’ We hadn't budgeted for this. So we did a bunch of research with customers, with employees, the market. We hired a couple of really good firms to take a look at this. We presented the board and we said, ‘This is going to be a distraction because the marketing team was going to do all of this. Now the marketing team is going to do most of that, but they're also going to be doing this. And it's going to cost some money because the larger you are, the more open heart surgery it is because it's a culture change, but it's also just a huge inventory of stuff that's got to be swapped out - Invoices, product UI, brochures, signage, yeah exactly. The big sign on the side of the building over here. It's just things creep up even today, almost a year later, like, ‘oh, we forgot about that.’ But we've got 20 some websites that we need to reskin. So it's not for the faint of heart, it's not easy, but you know, we presented to them, it was spring of 2022. And like I said, I thought it was going to be - oh man, this is going to be rough - but they were extremely supportive. They understood the vision and now they wanted updates, right? Like they wanted to know every month how we're doing, how we're tracking the plan and how much had we spent. And - but yeah, I know that's been a supportive, they were very supportive. It's been a good initiative. And I'll say it was cool. We did it for the market, right? We wanted to go to the market as a different company, a different brand. It's been well received by prospects, customers, partners. The thing I didn't count on was employees are stoked about it too, you know, because I think it gives employees, especially if you've come from an acquired company, you feel part of a different mission now. So that's been kind of a nice

Shiv:
It kind of resets the organization. So I think that's great. And we talked about this before you went on this and you know, my -

Mike:
Now's when you get to say…

Shiv:
You know, my take on rebrands in general, I'm like very against it. And I even told you about not going on this journey at the time, but -

Mike:
Yeah, I remember that. I was even inspiration to the blog you wrote. I mean, let's...

Shiv:
I did. I know one of the drawings on rebrands came from that conversation, but I will say that out of all the ones that we have seen, this was the best by far that in terms of a rollout of a rebrand and in terms of potential outcomes that can come from that. So can you talk a little bit about that? Because I think it would be good for - especially if there's platform companies listening or PE investors that have platforms. Rebranding is sometimes essential to tell a broader story. And there's two benefits, and maybe you can touch on both. One is the telling the broader story to the market, so maybe you can drive more pipeline. And I think the secondary benefit, which doesn't get talked about, I think you mentioned this to me in a conversation, is that the platform itself can have a higher valuation if it seems like it's more of a unified platform.

Mike:
Yeah, yeah. I think to that latter point, for sure. I mean, it's tough. You know, I went into the board saying, ‘hey, if I'm asking for a million dollars more in paid search, here's what I'm projecting. We're going to get for leads for MQLs, SQLs and closed won.’ I mean, that's cut and dry. And if I don't hit it, you know… With this is different. I can give you anecdotes about, you know, customer warm and fuzzy feelings. They like the color. They like the logo. Cool. But ROI is a little trickier. But what we're doing - I talked earlier about all the great software that we've combined and all the great expertise we have in this company. We're putting it on a common platform, not to distinguish from the platform for the company itself. So customers will be able to go online, a SaaS model, and pick their different security solutions. In order for that, I mean that's a lot of work to do. That's got to be from a single provider with a really strong name. It can't be, ‘well this is the Digital Guardian component and this is the Vera component and this is the Digital Defense component, here's the Cobalt Strike component.’ Now those are still product line names and they'll live on for a long time because they're very strong, but we needed to have a common platform called - and the platform is called Fortra, and we'll be taking that to market gradually over time. So. It's a huge endeavor. Again, I was lucky to work with, you know, Courtney and Molly and Marissa, who are just phenomenal on, you know, they set up brand champions throughout the companies who had representatives from every single department. Take inventory of where HelpSystems appears and then figure out how much it would cost or take in sort of in terms of time to redo that. So, you know, as we sit here, you know, 9ish, 10 months later, I would say the ROI is there in that we're seeing more and more conversations with customers and prospects about combined solutions, right?

And so we're leading with Fortra. I said at the time we need to major in Fortra and minor in, you know, Digital Guardian or AlertLogic or Terra Nova or whatever. So we're seeing a lot more conversations. One thing that is kind of booming for us right now are bundles. So, I've got this product. I could tack on this product to make it even more secure in my supply chain or whatever. So those are working really well. I think the branding as one unified company really helps that. And then down the road, if that can help the valuation that we are a more unified platform, I think that's really positive.

Shiv:
Yeah, I think you said a magic word there, which is just ‘bundling’. And two companies jumped to mind as one is Microsoft and as the other is Adobe. And we think about Adobe of the creative cloud, you have the marketing cloud and Microsoft, you have Dynamics and, and they're all these different suite of solutions that they've got and they're able to bundle it together because it kind of feels like one company. And I think that looks very different when you, when you look more like a holding company and it's like, well, what's the relation of this business to this other business? So to be able to tell that story over time with bundling, you would have a higher ROI.

Mike:
Yeah, for sure. Yeah. And you know, just even Microsoft Office that so many of us use every day, you know, those they products feel the same, they act the same, and it feels like a unified solution and that's what we're, we're driving toward for sure. Same with Adobe. Absolutely.

Shiv:
Right. That's fantastic. So I think that's a good place to end this conversation. I mean, learned a bunch and obviously we can talk a lot more, but I think for the audience, I think this was super, super great to hear what a sophisticated marketing organization looks like. Every time we meet a platform, I always say, go look at Fortra, look at what they've done. And that's kind of what a good vision for a platform company looks like on the marketing side. So I hope the audience got that out of this conversation. If there is somebody listening who's interested in security software, how can they find Fortra and all the different solutions?

Mike:
Yeah, fortra.com. Go to fortra.com and you know, if you can't find what you're looking for, shame on me.

Shiv:
Right, somewhere along the line the rebrand messed up.

Mike:
All right, exactly, exactly. Well, it's always good talking to you and it's been a pleasure.

Shiv:
Thanks Mike. Likewise, we'll share all the links in the show notes, but thanks for doing this. Appreciate it.

Mike:
Okay cool, take care.

Mike:
See you, bye.