Rich Veldran Transcript
Clint Betts
Rich, thank you so much for joining the show. You are the CEO of GoTo. It seems like you have held that job for about a year. You came in there in January. Prior to that, you were the Chief Financial Officer and the CFO since 2020, and you also worked at Boston Consulting Group, which I'd like to talk to you about. And then you were also the CFO at Dun & Bradstreet, so you've had a pretty incredible career up to this point. Tell us, why GoTo? How did you become the CEO? Give us your background.
Rich Veldran
Yeah, no, absolutely. As you said, I had a relatively long career at this point. I started at Procter & Gamble, so P&G, then I was over at ADP, then D&B, and then BCG, so always acronyms. I wanted to break away from the acronym thing, so I decided to come on board here. But if I think about where I came from, I was at Dun & Bradstreet for almost 15 years, and I was the CFO there. I took that company private and then thought I was just going to work for BCG doing some consulting work. I got the call right when the pandemic started from Francisco Partners, who was taking LogMeIn, a public company, and private. It was too fascinating and exciting an opportunity to really pass up. Because of what LogMeIn did, we've rebranded it to GoTo, but we deal with essentially all of our products being geared towards remote, hybrid work. Billion-dollar company, 800,000 customers, 3,000 employees. We do the full range of business communications, such as meetings, cloud telephony, contact center, IT support, and management, all the kinds of things you need to do to have a remote organization. Very timely, as we were entering the pandemic.
I literally started here in the midst of the pandemic. I didn't meet a soul for the first year, and I started as CFO. The whole concept was to transform the company and drive more growth. Then ultimately, at some point, perhaps you will go out public again, or there's some other trend. But it's been a fascinating ride. I took over as CEO about a year ago, so at the beginning of January, it's been great. It's a terrific ride so far.
Clint Betts
Well, it's such an interesting company and such an interesting path. As you said, it used to be LogMeIn, and then there was GoTo Meeting. I believe you guys also acquired a company called Jive.
Rich Veldran
That's correct.
Clint Betts
In the state of Utah, which was a really great company here in the state. I'm obviously wearing my Utah hockey jersey, right? So I followed this a little bit, I believe we're actually customers. What was that like? What does it mean and how do you manage merging all these different companies and brands together, and get it to a point where it becomes one offering?
Rich Veldran
Yeah. Well, that was interesting. That was somewhat the secret sauce of the company. Interestingly, if you go back to the history, LogMeIn started as a very tiny company about 20 years ago in Budapest, just having the ability to access your work computer from home. That was the original concept of the early days of the internet. We had a product called GoToMy. We still have it, and there are still a lot of customers for it. But what the company realized at the time, this was all before I got here, was that there were so many services that companies can use to do things like remote work, that there are some best-in-breed products out there that if you could acquire those and bring them together, you can have a seamless set of them.
That's really the journey that the company's been on. We did buy Jive. Jive was a relatively small company back when we bought it. It's now about a $400-million product line. It's a really great product. That's all the cloud telephony, that is contact center, that kind of. Really terrific. It's been a high-growth product, so that's been great. We also acquired a company called LastPass years ago. LastPass is a password manager. We actually, after the privatization about a year after I got here, we carved that out separately, the company. We felt that that was better off. It was a little bit different from a use case, one that didn't lend itself quite as much to enterprise sales, so we carved it.
And then, on the remote support side, that was more homegrown. Again, we're one of the leaders in remote support through a product called Rescue. Lots of companies, in fact, I've been a customer of many a time where I've had to call technology companies to fix something in my home computer, and they get in there with our tool. They take over, and they'll help you fix it, which is terrific. It's been really interesting. Then, the key is to bring these in and try to integrate them as quickly as you can without losing that entrepreneurial spirit. It's a balance and live that world throughout. How do you balance an acquisition, making sure that you can integrate it so everything's seamless, but at the same time, don't lose that spark of innovation that was one of the reasons you bought it in the first place? It's an art and a science.
Clint Betts
Some of these technologies are actually really complicated. Cloud telephony is no picnic. That's actually really difficult. There are not a lot of dev shops that do telephony, and even a lot of developers do that. Once you focus on that, which is really interesting, it must feel like a little bit of a moat, right? I don't know how that's changing with AI, and maybe you could tell us how you're looking at AI and stuff, but telephony is a whole different ballgame. That's a complicated thing.
Rich Veldran
Yeah, and you need more expertise in that than in some SaaS-type technologies because there are regulatory concerns. There are use cases that you need to be an expert in so that people can set up contact centers, for example, that fill all their customer needs. That's where AI really plays a role for us. One of the things we've been able to do is take a lot. By the way, our philosophy towards AI is that it's table stakes in the future, so we're investing pretty heavily in it. But what we try to do is make it about; we call it practice. Make it around things that are actually going to make a difference to the customer versus some kind of shiny new toy that just looks good but doesn't do anything because, yeah, there's some kind of vaporware out there that looks good but doesn't really do much.
If you think about what we're doing say in the cloud telephony, our AI will automate lots of routine tasks that otherwise a representative needed to do. It'll do call summaries for sentiment analysis so you can sense, "Hey, where was that customer angry? Were they happy?"
Rather than humans having to take all of that sentiment analysis. In many cases, it'll graph the message back to a customer, but there's always still a human element to it. You don't want the machines to entirely take over. What we try to do is allow it to help the representative take a lot of work out of the system but ultimately have the final call on, "Hey, do you send this?" It's been great for us. We've been pretty happy.
Clint Betts
How are you thinking about AI in the future? I know everybody's grappling with that question, and there's probably not; if somebody knew the answer to that, they'd be a trillionaire, right? But what are we looking at, do you think, and how are you preparing for it over the next five or 10 years?
Rich Veldran
Yeah, no, it's interesting because if I go back two and a half years ago, we were just doing very little, dabbling AI. Now, well over a third of our resources are dedicated to AI. It's for a number of reasons. One of them is to make the products better, as we just talked about, and we have the same kind of thing, support products. Work that's taken just things done [inaudible 00:09:20] through AI. One of them is to be competitive in the workplace and in the product.
But the other is internal, which, again, most I think companies who are going to do it right are looking at it for both reasons. For example, in our own customer service, we now use AI solutions to help take some of the work out of the thing for our own service. That's extremely helpful. On the R&D side, it does take; you'll use some of it for programming, but not entirely. Again, you don't want machines building the world, but they help facilitate getting work done quicker, and I think that'll become an increasingly big part of the way we... I think about every function, say finance. Prior world, there's a lot of stuff that's done by road, right? Lots of things that you could use AI to get an answer faster with fewer resources. It's going to be a big part of the way we think about our cost structure, our profitability, how we get done faster, and our speed to market, right? Accelerate that; it's great.
Clint Betts
Because you've been public, you've been private, you've been putting people, not people, but companies together like we talked about previously, how do you think about financing the company and public versus private?
Rich Veldran
Yeah, no, it's funny because if you think about my whole career prior to this, it has been in the public arena. I would say it's not as different as one might imagine. There's obviously a little bit more depth, privacy, and leverage. But the reality is when you manage your business to make sure you can invest in the future, make sure you can invest in the right innovation, but make sure you can service your debt and do all those things that you need to do, so cashflow matters. As a SaaS technology business, for the best businesses, if you're thinking about trying to manage cash flow, you do create a lot of margins. Generally, SaaS products are going to have a very low cost of goods. They're going to have what you're spending on [inaudible 00:11:40] spending something, but you want your cost good. That allows you to service the debt and still invest income. For us, it's a big part of the way I think about my mandate. I have to create value and do that through investment. I also have to do that by being smart about allocating resources around it.
Clint Betts
Yeah, that's interesting. I wanted to ask you actually about this SaaS model, which is going through a bit of a change. Obviously, AI is probably pushing some of that change and to figure out the best model. Do you have your normal SaaS model, which is the subscription model, and now a lot of SaaS companies are going to consumption model, how have you been thinking about those two things?
Rich Veldran
We are thinking about that because if you think about it, I'll give you an example of one of the paradigm changes. If you think about remote support, for example, historically, you might charge based on the number of seats you service. Well, in an AI world, you may not require as many service seats, so you'll need a different type of pricing. Consumption is an alternative, and there are a few ways to do that. But yeah, because you have to think about all aspects of what AI will bring to the world. One of them is it might change the pricing model. The consumption patterns change. For example, I might have fewer agents required, but the people who are there might need more sophisticated capabilities, so I can charge more for those more sophisticated capabilities and maybe fewer seats. But yeah, it's a big part of the entire strategic plan, and you have to think about where the world's going. We're planning for three years out now so that we can evolve our business strategy. The old Gretzky.
Clint Betts
Yeah, for sure. Yeah, that's the consumption versus subscription. And, as you said, there are a couple of other models that people are thinking through. It is really fascinating, and it seems to be changing the SaaS world a little bit. I know that that's a hot topic. What does a typical day look like for you as CEO, and how is that different from when you were CFO?
Rich Veldran
Sure, yeah. I would say that if I think about any given day, it obviously will bring its own challenges and things that are going on. But I would say that what I try to do is make sure that I spend some time in at least three specific arenas, every part of every. Specific meetings will change, for example, but I like to make sure that I'm touching on operations in some way. Business operating reviews, calls with customers, and something around the near term. Here's what's going on right now. I do like to make sure that I have some time dedicated to working with the innovation team, thinking about strategy, and thinking about multi-year plans, so I am sometimes dedicated to that.
And then the third thing that I always make sure I touch on is the team in some way. One-on-ones, skip level meetings, which is actually the best way you can get a pulse on the ground, particularly in a remote hybrid world again, cell removal solutions. We operate in a hybrid world, and we come in remote. 60% of my employee base is actually outside the US. We're a pretty global dispersed organization. Taking that time to spend time with the team in a real one-on-one group setting is extremely important. I touch on each of those, and, to some degree, every day, I have to be flexible because things come up.
Clint Betts
Yeah, I would imagine this whole hybrid, remote, everybody back to the office has been an interesting thing for you as a leader, particularly coming in there, starting with COVID where everybody had to be remote and now figuring out, do we go back to the office? And obviously, your product is very much for people who have various offices or remote and things like that. How have you thought about it as a company?
Rich Veldran
Yeah, no, it's really interesting, we've leaned into it. I would say I've had a personal change over the years. As I think of myself 10 years ago, and I still remember a conversation I had literally about 10 years ago with, I was CFO at the time, Bradstreet. We had a new head of HR who wanted to hire from everyone, "Hey, we can get the best talent, hire remotely."
And I was like, "That'll never work. People have to be in the office."
I was like the old stodgy, and I'm not, tending not to be old and stodgy, but in that particular instance, I was. And so we did a little bit, but not a lot. When I came here, again, [inaudible 00:16:56], it required to actually operate. And again, as a company goes private, generally, the C-suite has changed, so the people who came in were all from all over the place. And I will tell you, it worked so tremendously well and seamlessly that I was an instant. I cannot overstate how easy and shocking it was to operate in a remote setting.
Because there are advantages, right? Yes, you could all be in the office together, and that's all. You run into someone in the hallway, and good things happen. But here, you take so much wasted time out of the day. Going to meetings and waiting for people to show up, those kinds of things just eat a lot of time. Chatting in the hallway is useful, but it also takes a lot of time. Here, I find we're much more, and everything we've looked at says we've been more productive over [inaudible 00:18:03]. Again, we have the tools, and we know how to use them, so that actually helps us quite a lot. But we have everything that we need because we do. I think it's been great, and I can understand companies by the way that want to go the other way, but for us, we're leaning into it. It's a great model, we're very happy.
Clint Betts
Yeah. And what was the idea around, you said 60% of the people are outside the country. I mean, when you can open up your talent pool to the world, it's pretty interesting, right?
Rich Veldran
It's literally amazing. If I think about it, there is tremendous talent all over the world, but if you try to isolate your hiring to one specific location or even a handful, you're going to sub-optimize. We have tremendous resources in R&D in Budapest, Germany, and India. We have wonderful customer service financial operations in Guatemala. We are truly global, and it works very, very well. And then, for me, one of the things that I'm trying to do as CEO is to spend more time going out to the various locations just to meet with the team. During COVID, there was less of that. Last few years to ramp that up because there is still something, but you don't need to do it every minute or every day. You actually need to do it in a way that's effective, going out to locations, spending some time with folks, but then having regular meetings that are virtual. It works well.
Clint Betts
What do you read? What reading recommendations would you have for us?
Rich Veldran
Yeah, so I'm. Actually, I would say I'm a bit of a voracious reader, both in terms of reading and running and I listen to audiobooks. I don't run very fast, as you can imagine, because I'm listening to audiobooks. I like history quite a lot. Right now, I'm reading Ron Chernow George Washington's biography. Now, I was a big fan of the Chernow Hamilton biography, which the play was obviously inspired by. I read it long before Lin-Manuel Miranda wrote the play on it. But I am generally a history student. I like American history; just finished a Henry the 5th book, and it is quite good as well. And then, fiction-wise, do a lot of fiction. I happen to don't read too much into this, but I'm a big Stephen King. I do a lot of Stephen King; I just think he's a great writer [inaudible 00:20:49], and things aren't always good.
Clint Betts
Well, he's a prolific writer; he's great.
Rich Veldran
It's unreal. Probably read 20 books. Probably halfway through. Amazing.
Clint Betts
Yeah, what his output has been is incredible. What do you think about leadership and how has your leadership style changed? You developed your leadership style. Particularly going from CFO to CEO, how do you think about it nowadays?
Rich Veldran
Yeah, I think it's the same tenets of what matter I think matters, regardless of the specific rules. These are things I've always thought about. I think about what really matters to me as a lead. What do you need to do? The first, and these may sound obvious, but to me, I live by them. The first is to set the bar high and never settle. For me, you have to do that. You've got to find the right talent, you've got to cultivate that talent, got to retain that, and you have to leverage it to make a difference. That is absolutely critically important.
I'd say the second thing that really matters to me is that I'll call it humility, right? It's not about you. It could be the CEO; it doesn't matter. The mission is really what matters; the company is what matters. And you have to look for people, at least in my view, who they are, and I'll call them relatives. I try to find talent that is really just not about checking every box in their career. If you do it right, you'll check them. That shouldn't [inaudible 00:22:42].
I'd say that the third thing if I had to pick just three things, which I will, is I'll say you have to be intellectually curious. You have to continue to learn. I'm 58, and I still feel like I'm learning something every day. If you ever stop learning, then it's time to hang up the spikes because when you learn, you bring more of the, you actually break through the thinking [inaudible 00:23:12], and you better yourself. So, to me, those are the things that I live by, the way I think about recruiting, the way I try to be.
Clint Betts
How are you thinking about AI agents? And are you developing any of those? I mean, that's becoming an interesting topic as well.
Rich Veldran
Yeah, no, we are for sure. Again, there's always a human element. AI, if I think about a contact center or if I think about remote IT servicing, you can have agents that will do much of the work. You're still going to want a human interaction as part of a bot. You don't want the machine to make every decision totally. For us, it's an incredibly important part of what we're trying to build, but we try to have a human element as part of it. One of the things that we do with all of our AI capabilities is that it is the user's choice, the company's choice of where they want to turn that on. It's not thrust down the throat. Now, people are adopting it because it's incredibly helpful, but we still like to make it; I'll call it the user's option, whether they want to enable it.
Clint Betts
Yeah, that makes sense. What did you think about this year? It was an interesting year from a financial perspective and from a market perspective. You had some industries doing really well, some really poor, we had high inflation, we had elections, uncertainty, all of this type of stuff. And now we're past a lot of that, at least the political stuff, and we're looking at 2025 with a little bit more certainty. How are you thinking about 2025 versus 2024?
Rich Veldran
Yeah, it's interesting. Although the context of what's going on in the world matters, at the end of the day, at least, my philosophy tends to be that the world will change around you. You have to stick to your strategy and your philosophy of how you want to drive the business because you have to build something that's going to last regardless of any economic, political, et cetera, climate. I will not operate much differently in terms of what I'm focused on. We have a multi-year strategy that we are unrolling for the company. We're living that every day. We're driving that every day. And yeah, there'll be potholes in the road as economic things happen or there's political upheaval anywhere, but the core of what we need to do doesn't change regardless of the.
Clint Betts
Yeah, that makes sense. Yeah. Sometimes, we get a little bit too focused on outside stuff when you really just got to focus on the [inaudible 00:26:13].
Rich Veldran
You have to focus on what you can control, right? So, at the end of the day, that's the thing. Yeah, you have to adapt, right? If there are things that do impact, such as huge inflation, whatever, you have to adapt and deal with those things. But at the end of the day, focusing on what you really can control is everything. It's one of the things that we always talk about; you have to almost sift through and get to what you can focus on.
Clint Betts
Finally, we end every interview with the same question, and that is at CEO.com, we believe the chances one gives is just as important as the chances one takes. When you hear that, who gave you a chance to get you to where you are today?
Rich Veldran
I do have some. Now, you won't know this person, but when I originally joined Dun & Bradstreet, it was long before I was CFO, but I came on as North America CFO. But the CFO at the time was a woman by the name of Sara Mathew. She was CFO, then she became CEO, and ultimately [inaudible 00:27:20]. I worked for her on and off for about a decade in a variety of roles, including chief strategy officer, treasurer, operations re-engineering group, and all these different things. She set the bar unbelievably high, was literally the hardest boss to work for, and was quite demanding. But I learned so much under Sara. She challenged you, and you're either going to live or die under that very high bar, but it made all the difference in who I am. It absolutely did. So that's someone who probably never actually gave her enough credit or thanked her, but that's something I think about.
It was a hard experience but an incredible experience [inaudible 00:28:15]. That's what I try to bring to other people. One of the things that I try to do is actually spend a lot of time thinking about developing others. If there are two things you can do, I think in any leadership role, one is to drive the business and make it great. The other is to develop people so that their careers are great. Keep track of it. I've had 12 now CFOs, either public or private company CFOs who worked for me in real roles where I feel like I made, much as Sara. Yeah, keep giving it back.
Clint Betts
Yeah, that's incredible. Rich, thank you so much. Congratulations on an incredible first year as CEO of GoTo, and I'm sure there are many more to come. Really appreciate you coming on the show.
Rich Veldran
No, thanks Clint, this was really fun. I enjoyed it quite a lot, so I appreciate you taking the time.
Edited for readability.