Joining me today is Allen Gilmer. Allen is the Founder, Advisor, and former CEO, and Chairman of Enverus, formerly Drillinginfo and the Co-Founder of Vecta Oil and Gas.
Today we're going to talk about how M&A evolves from founder-led acquisitions to overseeing deals as a board member.
I thought it'd be really interesting to kick off with a little bit about your background, how you ended up doing M&A?
I was a geologist to begin with, and then a geophysicist in geophysics was the very first science of oil and gas. And oil and gas really took advantage of the digital revolution.
When seismic data, when you actually could move them from paper to a computer and start looking at the waveforms and things, essentially electrical engineering. It was a game-changer.
Being early exposed to the leading-edge science and digital sciences in geophysics helped me think about the rest of the oil and gas industry in ways that were more signal theory.
When was it, what size were you at when you made your first acquisition?
Our first acquisition came around 2004. So we'd been in business for about 4 years and in 2003, there had been a bigger company rolling out an application.
It was going to be competitive with our big competitor at the time, which was PI Dwights which just turned into IHS.
We were trying to think of data in a different way than they were. They had to divest a single open license to their database.
A company called PennWell Corporation. It was a privately held publishing company out of Tulsa that acquired it and spent millions of dollars to try to bring a competing product to the market.
They were eventually very unsuccessful in doing that. So they approached us to see if we wanted to buy it. We certainly didn't have the ability to buy it for what it was worth.
They had found out all sorts of problems with the information, with regards to how it was delivered, with regards to how they had tried to build it out.
We ended up acquiring it. It took about a year of negotiation. We gave them some options on our company and essentially, it was a cash-free deal for us. And then it ended up a very successful investment for them eventually.
You bought a company that's essentially a failed startup competitor for no cash out of pocket?
Yeah, and it had this data that was not public. It was impossible to replicate. And so therefore it was like the one other new, one other license of this non-public, old historical data that was very valuable to us.
How things evolved from there? What did the next acquisition look like? I'm curious about this, but also want to also get the thinking in your head about strategy at the same time and how M&A is mapped to the strategy as well.
Our first acquisitions were very much data-related. Every state had different reporting requirements. There was a one-man shop out of Louisiana in which we discovered that everybody in the industry depended on this guy’s data.
You had to provide all this information on the unitization hearing. He had been acquiring it all. The state itself had a fire and lost all of its own original records.
So everybody depended on these to determine whether they had something that was a legal description. We acquired that from him and it was a small, one-man operation.
And then he came to work for us for a decade after that. We had a couple of little deals like that but it was the way that we were doing it it was very difficult to come in and normalize.
And that was just based on our database structure. I'd say the least valuable, but the most used bit of information was production information. And there was this one company in Austin actually that had built out a system.
It was used a lot by banks and was used a lot by the financial community and it was called HPDI. We approached them, see if they would sell it to us. And it was a small five or six-man shop.
It was owned by another company here in Austin. An appraiser and a kind of an appraisal company. We had to come up with cash for that one, and we didn't have enough cash to go do that with.
And that was our first effort at going out and doing financing, going out into doing equity or mezzanine finance. Because If you remember, in 2008, that's when everything went to hell. Bank financing was gone.
So the only thing that was really left was this expensive debt-equity combination, these mezz type of deals.
We were able to go get that finance through the main street capital out of Houston, who became a partner at that point. We never looked back on the use of the professional financial community after that was set at that point. That was really transformative for us.
It sounds like you were pretty opportunistic about your acquisitions.These were opportunities that essentially sprung up and made sense that would create value in your current offering.
That's exactly right. It was a way for us to be able to expand our offering. We knew what we had. It was to the core of what we were trying to do that what we were offering was expanding our geographical footprint.
In every case these were smaller companies. So you didn't really have the challenge of competing cultures and things like that at that point. We looked at it as data and we were serving our own client.
And I think with HPDI was the first opportunity that we had in which we actually acquired a bunch of clients as well that were in an adjacent space which was in the financial space.
They had a very loyal group of clients there because they had provided a way of slicing and dicing a particular kind of data that was exactly what that community needed.
How would you contrast between doing an acquisition where it's more focused on the IP data versus once you acquired a deal that included a client set with it, like what complexities does that add?
You always want to be able to buy a client set as well as that's just the added value. Those client sets are happy with what they're getting. Is there a way of taking other things that you're doing and being able to present it to them in ways that they want to see?
They have ways of looking at information that they're used to. And so the ability to go out there and expand the offering to them is important.
And then to take the data that they have, and even some of the functionalities that they have and be able to present it to your own clients in a way that is novel and new. So it was a way of keeping things fresh as well.
How did things evolve as you started doing more acquisitions and needed to scale your effort?
We stayed opportunistic but what we found was that too many of these opportunities would come up and we weren't ready for them. It was really kind of investment banks coming knocking on your door and saying, you got to go do this.
And there were some that we did that were more we looked at having to say we did a lot of them, but some that were defensive in nature, that this was an important thing to have.
And if we could just go out there and take it off the market, it was going to be important because that would provide too easy of an access to the kind of somebody to go compete with us.
Or on the other hand, that this was something that was going to be transformative with regards to what we're doing.
As we started looking at bigger and bigger companies, I'd say that becoming familiar and assessing the culture of the organization became much more important in regards to things we're doing.
What'd you do differently to start preparing for those transactions?
At first, we did nothing and we got murdered because we did nothing. One thing that I learned early on was that every CEO says that they really want to stay with the company and they want to grow the company.
If that CEO is making life-changing amounts of money, this is going to go straight into his pocket. That guy didn't want to stay. He's telling you that because he thinks that'll help the value of the company, or you might be able to go do that.
Every time that we felt like we really needed the leadership of that company to stay, you couldn't really rely on that. That was the flakiest part.
In many cases, what we found was how to identify who were the real game-changers in that company, who were the really good ones. And how do you incentivize them for the future, instead of that moment in which you're acquiring the company?
Oftentimes, you'd find companies that were just so beholden to the capital providers, and the way that they were structured was just a complete slap in the face for the people that actually had built it all out because they made some foolish errors early on.
So all you were really doing is benefiting purely the capital providers and no one that was coming along with it.
So you really had to be thinking about how you incentivize people, how do you bring them into your culture? How do you incentivize the whole team, to be part of one team and how do you incentivize the future?
What we found was the acquisition of a company wasn't about the money that you actually wrote at that moment to buy the company.
It was going to be a bigger piece of the bigger pie because you had to bake into the whole thing, the future incentives of everyone going forward.
And one of the benefits of us being private when we became private equity controlled, was them being completely sanguine with regards to understanding that.
They really wanted to make sure that you kept the very best people that you could. There was always an interest in using stock to do so.
Any other lessons learned around integrating cultures?
The hardest thing to do is to be able to walk away when the culture just does not fit. I will always look at companies that I call positive versus negative cultures.
A positive culture is one in which they think about how this is benefiting the customers, how's this making life better for your clients and your customers and your stakeholders, which are your shareholders, and also your employees? Those I find to be positive traits.
A lot of companies, especially young startups are trying to compete against a big competitor. The easiest methodology for leading is to create a bad guy. You're competing against a bad guy. You're going to go out there and beat the bad guy.
I've never been comfortable with that methodology of leadership. It's the easiest one to go to. It's the one that's most probably proven effective to get people emotionally involved, but it's also one that I find leaves a lot of residual problems.
What's the right way to do it?
Being a positive leader. What do you do that's so positive, why do people buy what you're doing and how do you continue to go down that road with regards to making the world a better place? That whole concept is heavily mocked.
I don’t know if you watch Silicon Valley, remember Julio. And it's easily mockable, it's really funny, but at the end of the day, you have to have a higher purpose. The people that you know are going to fail as entrepreneurs are the ones that are doing it purely for money.
Try to go out there and make the world a better place and have identified weird little niches in which they can make the world a better place for a certain subset of people. They're the ones that win.
So going back to walking away, that's a tough one. How do you do that? How do you get those factors to get the commitment to do it?
The bigger the deal is, the more important it is you have the walk-away presence. Just because the bigger the deal is the more able that deal is to shoot you in the head.
If you buy the wrong thing and it's big enough, and it turns out to poison the whole purpose, that can happen.
Easy to deal with a small thing to sit there and not walk away from the smaller thing, but it is the thing that seems transformative. The big, big deal is that you have to have the walk-away printed.
Essentially it's like a risk assessment that if it's a bigger deal or you're taking a bigger risk and you need to put a lot more consideration in today, be a lot more cautious.
That's where it's super important to have a deal team and a board of directors that is skeptical and asking questions all the time.
When did you actually stand up a deal team?
After we did our first private equity offering and kind of changed it from being a management-controlled and owned company to being a private equity-controlled company. Our first partner was Insight Venture Partners.
We were still organically growing and so we looked at tuck-ins regularly. We did one or two, they were bigger. And that was really where we first started running into the cultural issues in a bigger way.
And it caused us to back off and say, let's not do any of these bigger things until we actually figure out what it is we're going to do.
And then towards the end of the timeframe with them, that was really one of the bigger issues. When I was brought in and recruited a COO to come into our company, who's now the CEO and that's when we first put together the deal team.
The deal team was the strategy team. It was headed up by a pretty incredible person who was able to go out there and really map out strategies, map out white spaces, map out where the companies were.
And was so ego-less that she could go out there and have these conversations with owners that are founder owners and were well known amongst investment bankers for all the investment banking bodies that had been crashed against their rocks.
Because they were just not going to ever sell. And was able to make the case that we were a good place for founder-led companies to end up. And her name is Tanya Andrien, and she was the first to lead a more coordinated effort.
And the first to really understand and look at the cultural aspects on how to bring people in and how to present our company to those companies as a welcoming place.
Rather than a 900-pound gorilla that was going to force them into all sorts of ways of doing things that they didn't want to do.
And to really identify what were the things that they were really bought into. And was there alignment with the things we were going to do? We didn't really have to sit there and put too much thought process into it.
So at the time that it comes to approvals that all these things have been worked out and been checked off so that it became a very easy thing to do, as opposed to the last minute gazing at your navel and figuring out whether you wanted to vet the company.
I like how you essentially articulated the value proposition of having a dedicated resource for M&A.
It’s usually important, because companies typically are organic growers or they're inorganic growers and very rarely, are they both.
If you're an organic grower, being able to have a dedicated team to be able to go out there and expand your opportunities inorganically is hugely valuable to the company.
And the reason is that's something that everybody in finance can get their head around. Everybody understands that if you could go out there and acquire, people have made massive companies out of just a great acquisition team.
To be able to go out there and say, okay, here's our strategy. Here's the acquisition team, go out there and put those together and do what you need to do. You know that is a great way of building a company.
The harder part is to go out there and build a company that has a lot of organic growth because that's kind of magic. And then you have to figure out how you're going to go out there and build that in there.
And that is a lot tougher than actually going out there and saying, well, here's going to be this piece for organic growth.
And so on the software side, the biggest problem has been that if you acquire companies as your model, then you end up with a box of brands, just a big old bag of brands.
Very rarely, is there any kind of integration between any of those bags of brands. And for us, the bigger issue is to make sure that it was not a bag of brands and that there was true interoperability with regards to all the things we bought.
So that put in a due diligence level with regards to what were the technologies that they used to build out the software, was the software supported or not? Was it state-of-the-art?
Was this something that was going to help our whole technology stack? Or was it going to be a drag on that?
And at the end of the day, how much was it going to cost for us to replicate that technology stack if it came to that? So that became a big part of the whole due diligence process.
Making sure it ties to clear strategy and maximizing the value of those deals.
What ends up happening when you start doing those kinds of things, you start acquiring other companies.
The first thing that clients are going to say, especially the snarky clients on Twitter. Is there going to go out there and say, Oh, well, they're going to buy this company and they're going to just jack up the prices and they're going to milk this as a cow.
You're not going to do anything else. It's just going to be monetized and milked. We've never done that. And that was never what we were trying to do. And when we had a bigger vision than just having a bunch of cows to milk.
Our vision was how are we going to put all these things together? So that one plus one equals three and we can go do things that nobody had really had imagined.
What became very important to us was to have a very concrete idea on how we could create brand new value from putting what we had with what the company we were acquiring had.
And to be able to have the first 90 days, first 180 days sprint to be able to go out there, and the first product to market, to show what the creative value of all these things were.
That is a great way of basically getting everybody focused on a common objective. It's a great way of showing the client base that you just acquired, that you're not there to milk them.
And that you're really thinking about their problems and how the combination of the companies is a much stronger combination than either of them alone.
What made you decide to step back?
Well, Deven Parekh is Managing Director at Insight. He was the one that encouraged me to always be on the lookout for a number two, a chief operating officer.
And he goes there's no timeframe for any of these things, but if you find somebody you like, and we'd like to interview him, we're going to be very supportive of you being able to bring that person in.
As a founder, that's always a tough deal because this is your baby and you have a distinct knowledge that nobody else does to make it work. All the other stuff you tell yourself.
But he was right. I found a guy. I remember I was in my office in the UK. It's nine o'clock his time, nine o'clock at night, my time. And I was at the office there in the UK.
I was going to interview him for an hour. He talked for two and a half hours about my company. I might've said 10 words.
And he talked about all the experiences he had and what he wanted to apply to what we were doing because he saw some things that would simplify a lot of our operational processes.
I realized when I was listening to him, I was like, this guy is a genius. This guy's an operational genius. So, I came back to the States. I met him, I was really impressed by him, and met his family.
Because, frankly, whenever you're doing anything like that, who they surround themselves with on a day-to-day basis is just as important as that person.
Are his significant other? Are they supportive or not? He continued to blow me away. I had him fly up to New York to meet Deven and some of the team over there. And I got back enthusiastic, hell yes.
And then we hired him and he hit the ground running. And I remember when we first talked, and I gave him a lot of degrees of freedom.
Because one of the things that he said was, look, Allen, I'm gonna try to be as sensitive to things as possible, but, you want to pull bandages off slowly, or do you want to do them quickly? And that's why we gotta do it quickly.
The important part was to just give him the ability to go do it so that he didn't have to be worried that I was going to second guess his decisions. If he was going to make a decision and then you need to let me know about it. And if I had a disagreement about it, we would discuss it.
I just didn't want to be in a position of second-guessing. And that's always been an important part of our company. If you're going to hire really great people to run divisions by going out there, and second-guessing what they're going to do.
You're giving them an excuse to say that I failed. And really the only thing that you care about is that do they not fail? You want them to succeed. That's what happened.
And then, he was the COO for two years. He was such, such a transformative person in our company in terms of who he was able to attract to come to the company. And what have you, that it was easy to make him the designee.
I knew that he was on the radar screens of a lot of PE companies and PE groups because every PE has got portfolio companies that are badly run and they need people that are going out and doing this.
And I knew for a fact that the guy was on a lot of radar screens and I didn't want to lose him because it was going to make me a lot poorer because I wasn't nearly as good operationally as he was.
We had a discussion and I said, let's just make this official that you're going to be the next CEO. And he was appreciative, and he came to me with a plan for over a year and a half period that we could slowly transition things over to him.
And I said, so I have a different plan for that. I said, how about next Thursday? We did a quarterly, all hands talk. I said I'd like to announce it at that point because at that point I knew that he knew everything and he'd been there for two years.
He was definitely fully immersed in the culture. I had ultimate confidence in him, and then I was going to step back to gbe the executive chairman. The functional day-to-day wasn't going to change.
We would still collaborate on the things we were doing, but it didn't seem necessary at that point to go out there and say he was going to be the CEO and then not be the CEO for some extended period of time.
Being a CEO is a wonderful thing. People treat you a certain way. It's very addictive. When I was considering letting go. I spent a weekend thinking about all these things. I was like, yeah, this is about stepping away.
And I realized that every reason I could come up with, for staying as the CEO was something that just was to dissuade my ego. It was not for the benefit of the company, that recognition made it easy.
How are you involved in deals today as a board member?
There's a list of companies that are active. We would have weekly calls with regards to various companies. We are either in contact with or in discussions with.
I always made myself available as the founder to be able to go talk to other founders, be a founder whisperer. That helped in some cases.
When you have a well-thought-out strategy, and it's well-articulated and everybody understands it. Then it just fills in the blank. And that's really what our team was able to go out there and eventually go do.
Ad hoc never is great. The more you have to ad hoc things, the more chances for failure, you're going to have.
The less ad hoc it is, the more transparent it is, the more that everyone is bought into the whole process and the thinking of why the better it is.
At the end of the day, sometimes a founder-to-founder discussion.
Frankly, a founder that is no longer the CEO of the company, because I'm very much in the same position that they are going to be.
What I found in this most great companies, their founders are really worried about their people. They want to make sure that their great people are going to have a place to land and that the visions that they have, are understood and respected, and appreciated.
And to be able to provide that and make sure that we understand that. Nobody wants to sit there, oh, we're going to take your baby. And we're going to dissect it limb from limb.
When you use the arm over here and three fingers over here, we're going to get rid of it. Nobody wants to hear that.
And if that's what you're going to do, you better not be telling the truth about that because nobody wants to hear that.
And frankly, I think that's always a bad reason for buying a company, is to buy and dissect. And we always looked at buying another company as an opportunity to really bring in some high-quality people.
It's very difficult to hire great people, an ongoing basis. And oftentimes when you're buying a good company, especially one that's having success.
You know that you're buying at least a handful of people in there that are very difficult to go higher in the open market. It is really like a big grab bag of goodness.
I got to know here from a previous conversation we had around technology versus people’s point of view. Is that related to this?
Something that said it was like, as companies always try to pretend like they're this big behemoth. And I always think that's a mistake that to me it's always, brands at their best represent the people behind the brands.
I always thought it was a huge mistake, especially in our industry. You'd have these three guys that are in office who were writing code. And they're trying to pretend like they're IBM or Slumber J or something.
That was exactly the wrong way. It was like, the bigger trick is going to be, how do you become a bigger company and still be a person because people have a loyalty to people.
They really don't have loyalty to big faceless bureaucracies. And so you have to actually have people behind the processes because that's who you have loyalty to.
What does the thinking look like to create a flow of having a strategy, identifying the white space, and having that flow over to your criteria to approve deals?
It's always a funnel, right? A lot of things in the front of the funnel and few things get down to the bottom of the funnel and your strategy is going to be revamped every few months, because, at the end of the day, things change.
That's why, when people have a five-year plan and it's very specific, I guarantee you that's a throwaway deal.
You have to be able to say, okay,
- here's this emergent competitor over here,
- or here's this emergent technology,
- or there is white space that's emerging kind of in adjacency to us, the bigger issue is going to be identifying.
How are you going to direct your resources? Is this worth getting, is something opening up? That's going to be early on that there's going to be a whole lot of revenue associated with it.
Or is this something that is an easy thing to do, but then it's just a little add-on to what you're already doing?
So you're always having to look at the multi-dimensional aspect of all of that and questioning that. And then for instance, in oil and gas, we started off as a purely oil and gas company, and we made some acquisitions, to move into a little bit of the power analytics and some things like that.
So today, we're looking at a lot of different analytics across the whole energy spectrum. Where are we going to move there? Well, right now, our focus is on a lot of things that we're creating out of our own databases and an acquisition we recently did.
There was in the ESG space. Is that something we would have foreseen three years ago? Well, absolutely not. The world changes.
And you've got to be rational about how those things are changing and how are you going to go out there and deploy your resources so that you're going to get a return as quickly as you can, and that there's a good return on the things that you are investing in.
How do you approach that? Where does that fit? Is that something that just stems from your current CEO? Is it led by the strategy person? What does the mechanics look like to make sure that there is a periodic update and review on the strategy?
We have a diverse set of outlooks or viewpoints with regards to our consultants.
All of our consultants are best in class, they're world-class and we're able to go have kind of, I'd say honest discussions about everything that's taking place and no one has got their finger on the scale too heavily to try to force things.
And frankly, one of the benefits of Enverus today is that we're changing. The energy world is changing rapidly. I'm an oil and gas man. I understand oil and gas absolutely.
And I am an advocate for oil and gas, but my fingers are not on the scale of saying we've got to support oil and gas at the expense of everything else because that's where I came from. And there's a real benefit to having that.
The whole thing about trying to create a company that's going to outlast you, how do you get your ego out of it?
And to that extent, you just try to hire the smartest people that are willing to go. They can basically stand toe to toe and have an argument about anything and not take it personally.
Let's talk about some of the big lessons over your career. I don't know if anything jumps out, but I'd particularly like to hear about a deal that you may regret and what you learned from it?
My biggest regrets are that I have always had a weak point for geniuses and there were a couple of deals that we did early on. And in which they were genius-led little organizations and the people running them were truly little geniuses.
And what I found typically was geniuses left to their own devices. They create crazy towns. And the reason is, is because rarely are geniuses great at everything. The reason that they're geniuses is that so much of that capacity is concentrated on some certain aspect.
And the problem with geniuses is that sometimes they feel like they're smarter than everybody at everything.
That was really a benefit of me growing up was realizing that and I'm not nearly as good at a lot of things. I had an early boss that told me, Allen, you need to surround yourself always professionally with people that are great at stuff that you're not great at.
So that way one plus one equals three. What you don't want to do is you don't want to spend all your time finding to be great at the stuff you're not great at.
Figure out what you're great at and then go out and do that, and then surround yourself with people that are good at understanding them.
But what does that require? It requires self-awareness, self-awareness about what you know and what you don't know, what you're good at, what you're not good at. And the ability to appreciate people that are great at things as opposed to.
Even in my career, my academic career, and professional life, I always noticed that people would always judge others based on what they were good at without recognizing what the person that they're judging was good at.
And that meant that everybody always was falling short. And I remember seeing one of the frustrating parts of life is going through life, realizing that if person A could have gotten with person B and both of them had been self-aware, they could have changed the world.
When instead they chose to just domain the other one and diminished both and not do anything.
How would we tie that back to the M&A example? You mentioned here are some of these genius-led companies, was that the deficiency that sort of not self-aware about the weaknesses or areas that need to be developed?
See these people that have very self-destructive tendencies. I remember I was in a Vistage group one time. We had a very smart guy who was running this one company.
It was a, let's say it was a consumer company that had all sorts of fields were there, but he didn't, he wouldn't listen to anybody. He would rather be right than rich. That was a statement that came out of that group.
And I remember thinking about that. I was like, that's exactly right. He was looking for nothing more than validation of his opinions and would reject everything that was not a validation of his own opinion.
He didn't recognize what he was missing. He was just happy and comfortable in his own little worldview and all the efforts that everybody was spending on him to try to think about things differently were completely wasted.
So would you still look at doing the deal, but then consider that and put them in a role where they would essentially not be an influential leader, but more of a technical resource?
Maybe. It would depend on them and whether they would be willing to go do that, somebody who's toxic in an organization, who's unhappy and thinks everybody's an idiot.
They completely undermine everything everybody else is trying to do. But I've always found the hardest thing to do as a leader is to lay people off.
The easiest thing to do is to fire them. That is if somebody is toxic and destroying everything, and I really resisted getting rid of anybody for a long time.
And then the point that I made the first time I got rid of a couple of toxic individuals in our company. And then I found that I had dozens of people coming over to my office and saying, thank you for getting rid of them.
The message that you're sending is that it's alright to be toxic and all right to be an asshole. All right to destroy value. And why the hell should I work, work my ass off, when these idiots over here can get away with murder and here's just set a bad example. It's like parenting, there's nothing different than parenting.
Are there any other big lessons learned over your career of doing M&A deals?
Geographical differences are real. And then the real cultural differences when you acquire companies in different countries, definitely, different styles that you have and realize it's your culture is probably not going to translate completely to that culture unadulterated.
And so understand what you're going to be able to do in order to make that work. That is an extra level of complexity, but it's usually worth it.
What's your advice to a founder like myself in that position to start thinking about acquisitions? I'm curious, like how would you look at something like that? Being an early-stage company?
When you buy a company, you're buying products, you're buying a product line. That's proven, that's the big reason you buy something. Be up for something, rather than going, doing that. You're buying something, that's proven that you think you can scale.
But one of the things that I realized, even when we were organically growing and I was building products, what I love to do is I love to invent products, but, I've made more money across the board, changing up my business model than I ever did by creating a new product.
I don't think enough people think about it, especially when you're locked in because you've got X number of revenues in the business model you have.
Think about how you would go out and disrupt yourself, and think about the business model and what's that going to require to go out and do that?
What are other ways that you can generate revenues eventually from that? And does that blow the cap off the roof of what you're feeling right now?
I've always found that people that go out there and look at, especially people that sell seat licenses and things like that, they're always like, Oh, well, if we sell all of these and look at all the total addressable market.
And they think about that, what's likely there you're really going to get any of that. Our big aha moment was bundling. We were building out all these little discrete pieces of products that we’re breaking even at best.
Our first one was carrying the whole cost of everything. And we were rolling stuff out that were niche products, hugely valuable to the person that needed them at the time that they needed them, but not very valuable, otherwise.
High cost to sales associated with them because you had to make sure that everybody knew about them and you need to make sure that everybody knew about them at the time that they had an acute need. Then you can extract the maximum dollars for that.
So we had maybe five or six different product lines that were in that position. And they were high cost to sales. People generally liked them, but they didn't need them. They didn't need them until they needed them.
And then it scratched the back quickly and then they might not need them again. Once we identified what were the common attributes of all those, put them together and sold them in a bundle.
We got people to go buy these, not on a seat basis, but I don't know on a bundle basis for low costs the year that we did that, we tripled our revenues. And that was after we'd gotten to the point where we were maybe growing 30, 40% a year.
And then at that point, we tripled our revenues the first year and then supercharged our growth from then on out.
What's the craziest thing you've seen in M&A?
When big companies have diluted themselves, that they're in a space and there's a lot of examples of that, where they go out there and end up paying more than it will ever be worth.
The fact that that happens over and over again is a testament to both the abilities of investment bankers and it's a testament to that irrational giddiness that comes about. Those are the things that always surprised me about M&A.
There's a deeper aspect about that whole thing, about the availability of money to buy things that may never actually cash flow payout, but that's a different thing.
If you look at the whole system of how it is enabled, it concerns me a little bit and the new financial feudalism.
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