Welcome to the Karma School of Business, a podcast about the private equity industry, business best practices, and real-time trends. I'm Sean Mooney, Blueways founder and CEO. In this episode, we have an amazing conversation with Carl Press, partner with Thoma Bravo. Enjoy. I'm very excited to be here today with Carl Press, partner with Thoma Bravo. Carl, thanks for joining us.

Thank you for having me.

Absolutely. I've been looking forward to this conversation for quite some time, so I think we're going to jump into a lot of interesting topics here today. One of the ways I really like to start these things is to get to know more of the story of you, Carl. It'd be really helpful if you could tell us a little bit about how you came up, how you eventually got into this private equity industry, et cetera.

Happy to. I'm originally from Chicago area, Chicago suburbs. I went to school to study engineering. I was an electrical and computer engineering major, and I had no idea what I was going to do with that other than to say I liked technology. We had computers and cell phones a little early in my household because both of my parents worked in tech in various forms. I had some vague idea of Silicon Valley, and it felt I had to be there. All the interesting things were happening there. All the smart people were going there. I had no clue what that meant. And did a couple of internships in engineering and then stumbled into finance. Did an internship in banking and felt like this makes sense. If I can maybe do this there, then I'm in really good shape. And so I was able to land a banking job on the West Coast and translated that into investing in private equity and investing in software companies, and I never looked back. So I really stumbled into this I'm extraordinarily grateful that I did.

One, I love the background in engineering. If I had the mathematic capabilities and could do it all over again. I petered principled out in precal, but once I got the calculus, it took way too much work. So one, I'm envious of anyone who can do that. And two, I think that degree is you think about being a problem solver and someone who can figure out complex situations that are interrelated. It's an amazing background.

Yeah, I'm glad I did it. And this was before STEM was sexy, too. I felt like it wasn't the sexy decision at the time, but I'm glad I did it.

You're an innovator. And I think like a lot of us, there's a lot of things that are cool now and that my kids get to do that I very much so wish they were cool when I was a kid. It would have made my growing up a little easier. And the other thing I appreciate is your origin story from Chicago. As someone who lives in Nashville, I like to think of us now as a Southern suburb of Chicago. There's a lot of Chicagoans, and I very much applaud that because I love the Midwest mentality as we get the waves and waves of people moving in here.

Take the mentality, leave the sports behind that, is my only advice. Leave the professional sports in Chicago. It's just nothing but heartbreak.

You're talking to someone who's... Both my parents were from Cleveland, and I grew up in Austin, Texas, so I could have been rooting for the Cowboys during their heyday when they won. I think that's part of what made me resilient and tenacious and helped me during my career in private equity. That's one of the grit, and maybe it's the same with you. It's like you're born with grit.

If you want to be a long term thinker, be a Chicago Bears fan. It's always a 10 year cycle.

Absolutely. Exactly. One of the things, Carl, I'd love to peel back the onion even a little bit more on you. One of the questions that I really like asking people is, we would know you better if we knew this about you. What would be one of the things that you would share about yourself?

Yeah, You've got to know right off the bat, my wife and I, we have three boys, five and under. So we are busy at home. Our house is chaos. Five and a half, almost four and two, and they are a handful. But we love it. We love this phase. It's a lot of fun, but it's a lot of work.

You're skilled at zone defense.

We're skilled at zone, although they found the holes in the defense. I tell you that, and they exploit them whenever they can.

The most favorite time of your weekend is probably nap time, but I'm sure it's never coordinated and aligned.

Nap time is never needed to be more efficient than it is. When the boys go down, that's the time that we get a million things done, and efficiency and productivity is key.

I love it. No, that's a great thing to know. I can empathize but not understand. My kids are now 16 and 13, and even then with only two, I really can't even... I think I blocked it from my memory.

You're mostly out of the woods, I guess. I'm in the home stretch.

I'm going to be empty nesting. It's going to be like restaurants every night.

Must be nice. Must be nice, Sean.

I'll tell you. I'll tell you in a couple of years, how it was like.

That's something you should know about me. What else can I tell folks? When I was in business school from 2011 to 2013, I got to do a lot of cool things, one of which was I was one of the writers for our comedy variety show that we put on every year called the Wharton Follies. It was just one of the most fun experiences I had, both just in general in my life and also specifically in business school. I made some lifelong friends doing that. I got to exercise a part of my brain that I love to use, but sometimes don't get to in our job. That was just a ton of fun, something that people don't necessarily know that I did and was really important to me.

That sounds like a blast. I'm curious, Carl, how did you even get into that? Maybe in the back of my mind, like, That'd be so much fun to do it. I wouldn't even know where to start.

I'd always done some forms of creative writing in one way or the other. I had a column in the high school newspaper, which was a comedy column that we did. When I got to school and they actually did the performance for us at the Admit Weekend, I just said, These are my people. These will be my people in business school. I just knew it. I was right. It ended up being more than half my time was spent working on that show, but it was awesome. It was a lot of fun.

One, it sounds like you've got some friends for life out of that, this group of like-minded, A, fun people, but be probably really clever people, too. Then I guess with that in mind, are you all thinking about getting the band together again? Because no doubt you have some amazing source material in your home these days.

We always try and get the band together, but it's mostly impromptu, improv amongst us, back to just making each other laugh as opposed to an audience. But all the same, we have a blast doing it.

It sounds like it was a really good time, but probably also you're conducting so much motion and commotion. I'm sure at some point there's some applicability to having three boys under five, but also even just the motion and commotion of the career you're in now. How do you bring order to these seemingly disconnected things?

Yeah. How do you fail quickly? You write something, it either works or it doesn't. If it does, great. If it doesn't, you move on quickly. It's like in our business where you see a lot of deals, you see a lot of velocity, and you make quick decisions, and you learn to be decisive, and you learn not to dwell on maybe mistakes or chasing something that isn't there, so to speak.

That's a really nice way to think about it. Carl, before we get too much into the conversation, I'd love to take a moment and just learn a little bit more about where you sit in the Thoma Bravo organization, because I think it's going to inform a lot of our conversation. One, because Thoma Bravo is such a dynamic organization, and two, it'll give us a better sense of your lens into some of the topics that we're going to talk about here.

For the listeners who aren't familiar with us, Thoma Bravo, we're a private equity investment firm based in San Francisco, Miami, also in Chicago. We have 135 billion of asset center management, and we exclusively focus on enterprise software. That's where we cut our teeth as a firm in the late '90s, early 2000s. We realized it's the best market, and we've never looked back. Today, we have a bunch of different funds that invest in software. We have a group of funds that focus on control investing or buyouts. Within that, we have small, medium, large, which is our flagship funds, our latest being $25 billion. Small is our explore funds. I started the Explore effort in 2020 as a way to get Thoma Bravo really back to that middle market, which is where we started and where we feel like there's so many of what we call the emerging category leaders in software that are under 100 million of revenue, that are looking to scale, that are hitting an inflection point or looking to do M&A. The latest Explore fund is 1.9 billion. The companies and the underwriting and the approach and the diligence is all identical to what we do in the flagship fund, just scaled down.

As the co-lead of Explore, I'm actively looking for those emerging category leaders in software.

I really appreciate that context because I think it's going to give us a helpful lens into some of the topics that we're going to talk about in just a moment here. And maybe I think that's a great segue, Karl, if we go into the way that you think about business. And one of the things that I enjoy most about these conversations is I get to talk with really some of the best business builders in the world like you, and then I I had to liberally borrow them in my life as I think about building Blue Events. I'll be taking notes here, but I'm curious to get your perspective on this yardstick that you might have. When I was in PE, I would look for common things to try to make the world a smaller place and realizing that every business is different, every situation is different. But there were some first principles, there were some themes that I looked for in companies. I'm curious to understand and know more about what do you look for when you're looking at a company as a potential investment opportunity in terms of what a company is, but probably more importantly, what it could or should be in the days ahead.

Yeah. When we meet a company, there's developing a vision for what it could be. That's part of our job is how to allow that company to achieve its potential to become what we think it could be as far as scale and market leadership and margins and so forth. There are some critical things we need to see in order to even attempt to go on that journey with that company. I was talking about screening companies quickly. Well, there's three things we have to see in every deal that we invest in. It sounds so simple, but it remains It's been true forever. As long as we've been doing this, one is just having a really strong leader at the top. Having a CEO that you can partner with that is like-minded, that will challenge you, that you can challenge, and that you can grow together with on this journey. That is so, so, so important. If you don't have that, you will not succeed, period. That's number one. I think second is, is this company a category leader? In whatever category it's in and however big or small you want to define subset, are they the best at what they are doing at their core or a close number two?

If the answer is yes, then we know we're on the right track. If you look across our portfolio of the 100 odd plus platforms we've done in enterprise software, virtually Every single one of those fits that category of being a category leader. That's super important. Then the third is just really high quality revenue. That's defined in a lot of ways. It can be the renewal rates, the quality of the customers that they're serving, the ability to upsell those customers over time, and how that revenue grows on an effortless basis within your base. But fundamentally, is the revenue high quality? If you've got high quality revenue with a strong leader in a category leading platform, we'll take it, and then we'll go and try and make that company as great a business as it can be over time. But those are unassailable qualities of a business that we want to see.

I think that you nailed it in terms of if you get those things right, how do you not win?

There's still a bunch of ways you can not win, as it turns out, and we've learned those lessons, too. But those are necessary but not sufficient qualities of a winning investment.

I'd love to dive a little bit deeper into the first one. One, as you look at this current now that we're living in, There's ongoing talk, consternation about AI and the robots taking over. What we see through our lens here is the more and more people talk about those type of things, the more and more calls we get about leadership, and the and more we talk about on this podcast. People, in some ways, matter even more now as we're going through probably one of the bigger shifts in the commercial history of certainly the modern era we live in now. Maybe that's a topic for another day. But when you say you're looking for a strong leader, can you unpack that a little bit? What are the attributes and characteristics, a level further down?

There's so much there to unpack. I mean, part of it is, is this person driven by a passion to grow and make this company special. There's two types of CEOs we tend to see in this market. I'm going to way over generalize. One is someone who is driven by that mission. And yes, they're economic animals, and yes, they want to make money, but they are absolutely committed to making that company special, and they are tireless towards that end. That's one type of CEO we meet. The other is more of the mercenary. You come in two or three years, you do what you need to, and you get out. And that doesn't work for We almost never succeed in that setting with that type of partner. As a result, we tend not to look for opportunities with those types of folks. I think two is, is this person aligned with our vision of how to build a great company? I think in the absence of that alignment, you're going to have friction for the next many, many years. They may think more about growth at all costs. We may not. They may think only about organic opportunities.

We want to pursue M&A. Or vice versa. They may only want to do deals and We think there are opportunities to grow our margins organically just by being thoughtful and more efficient in sales and so forth. Having somebody that's like-minded, I think, is really, really important. Then more than maybe both of those is just a CEO sets the tone of the organization. Are we going to be focused and resolute in our goals for the year, or are we going to chase shiny objects? Are we going to be measured in how we hire and promote from within, or are we going to grow at all costs and grow too fast, and as a result, take on too much and have responsibility diffusion across the organization? Setting that tone at the top is just so important. As a result, you can't overvalue a great leader. You just cannot. We have so many examples of that.

I really like how you frame that. You're so right on, is someone committed to this mission? Are they going to be focused? Are they going to be aligned? All of those things. It's almost like in many ways, I think you're entering into a marriage with your partner, and you're going to have to work together. You're going to have to be better together than apart. You're going to go on this marriage. Maybe this is a 3-7 year marriage, but it's still going to be something where it's so important to get all of that right and spending time in those preconditions. If you do that, magic can happen. But sometimes when you compromise your principles or standards, things can go off track. I think we've all experienced that in probably a whole variety of our aspects of our lives and work. The way that you framed it there, I thought was really nicely done in terms of not only for people who are aspiring to be future private equity investors, but also executives of companies who are hoping to work with private equity firms to understand what's important in terms of how to be successful in this transformational type of investing that takes place in private equity, which has historically been highly successful, more so than almost every other asset class, if not all others.

Yeah, absolutely. Part of why we love working with the existing teams of the companies that we invest in is you don't lose time. You said it, these partnerships are like marriages, and the breakups are really messy. Then bringing someone new on board, that takes six months, at least, for that person to acclimate to the business, for the business to acclimate to his or her leadership style. That's time burned. That's time that could be spent building new products, doing acquisitions, getting into new markets, cross-selling customers, et cetera. We tend to want to say, Let's go find those great businesses that happen to have the leaders that we can work with. They may not have all the weapons that we want them to have. But if we're aligned and they're mission-driven and they set the right tone, we'll work with them. We'll figure it out from there.

I really appreciate your thoughts there because it makes a ton of sense. It's something I think everyone should really think about in terms of, how can you be successful together? This idea that if you can, but you're going to go further together, you might go faster alone. Then you can think about calling Karl or Toma Bravo and transforming these companies into something probably much better than a lot of people could even envision in their mind before they enter into these, quote unquote, marriages together. Today's episode is brought to you by BlueWave. Building a business is hard. Top third parties can help you create value with speed and certainty, but it's difficult to know who's best. That's why you need the business builders network. Visit BLUWAVE at B-L-U-W-A-V-E. Net to learn more and start a project today. Next, I'm curious to maybe go a little bit further. You've brought in a company, you're working together, you've made the investment. I think, as we all know, that's when the real work starts. In some ways, the easier part is closing the transaction and getting started. The hard part, in some ways, the fun part, is when you get the business building.

With that in mind, I'm curious how you and Tomo Bravo think about value creation and the resources that you bring to bear to help support the success of your portfolio companies and your teams.

Happy to unpack that. Even before we sign a deal, we will, during diligence, as we're getting closer to a decision where we want to pull the trigger and make an investment, we'll put together a four-year plan that serves as a roadmap for the journey ahead between the investment team and Thoma Bravo and the management team. That for your plan, it outlines revenue and earnings and growth rates at a very high level. It's just the organic plan. Any M&A would get layered on top of that. We then shake hands with the CEO on that plan before we sign on a deal. As soon as we sign, then it's off to the races to go and try and hit that plan. It's brick by brick. It's step by step for four years or more sometimes. Then right away, what we do is we engage our operating team, if we haven't already, which is a group of ex-executives, typically our ex-executives from Thoma Bravo, that work with our companies across our different funds. We typically assign two to every investment. Usually, we're including them in the diligence process, so they're up to speed by the time we sign a deal as to the quality of the business, the strengths of the company, where the management needs help, et cetera.

Usually, that pairing is one former CEO that typically serves as a chairperson, and then one finance-oriented former CFO that serves as a driver and keeper of metrics and sales ops and rev ops and reporting and so forth. That pairing, we found, we started that in the mid 2000s when we started investing in software, and we haven't moved away from it because it's just been so powerful. We installed that pairing at the board level, and then off we go. For the first 12 months, we do monthly board meetings, four hours each meeting, and every meeting has the same cadence. We start with the CEO's letter, which is typically the three or five things on the CEO's mind. What are the big rocks that we're trying to get around? We're trying to move through. We then move into the traditional board session. We'll do the governance, we'll go through the numbers, we'll do the quarter over quarter, year over year compares. Then the meat of it is really a full deep dive, function by function operating review, where the CEO brings in the deputies, each of the functional heads. So product, engineering, sales, marketing, and so forth, customer success, and we just go deep on each of those.

Each of those senior executives is empowered and has their own PnL and has their own set of metrics that they're being measured against. They're all little CEOs in a way, and we give them the opportunity to present on their business and then offer them feedback and guidance and making connections between the challenges that they're having and the challenges we see in our portfolio. Because chances are whatever challenges our companies are facing, at this point, we've seen some flavor of it. We may not We've not seen it exactly that way, but we've seen some flavor of it where we can offer some insight. Like, Hey, we actually ran into that with XYZ Company three years ago. Let us connect you with that head of customer success or with that product lead, and we can figure out how their learnings apply here. That thing. That's our board cadence. That's our operating partners. I should say we have a group of what we call operating advisors as well that help with all the onboarding and the reporting that goes into our portfolio. There's a lot of reporting that we put place right from the jump, right when we do an investment.

It allows us to keep score in the right way. Our view is if we're not keeping score, we're not going to see problems early enough. We're going to see them too late. We want to see the leading indicators, and We have a pretty good sense now, having done this for years and years on what those indicators are. We look at the full corpus of reporting that exists. We scale it down for the company in question, and then we go and apply that. Our operating partners and advisors really drive a lot of that. I give them a ton of credit for the value that they create in that effort, which is ongoing. We always say the reporting is never perfect. Even the day we sell the company, there's still things that we wish we had been reporting on a little bit differently, but it's an ongoing journey. We also do functional summits for each of our functional leaders within our portfolio. So once a year, all of our chief marketing officers or chief product officers or heads of engineering all get together for one day in a conference room somewhere in Vegas or wherever, and they talk about their problems and their challenges.

They'll find that a lot of the that they're facing are the ones that other companies are facing, and that the challenges that our $2 billion PnLs companies are facing are the ones that our $35 million PnLs are facing, just in slightly different flavors. So we do those, and those are a big effort that we're now expanding over time to add more functions to that effort. Then lastly, I'd say M&A is an ongoing effort at every one of our companies. For our very large companies, they have dedicated CorpDev folks at the company that work with our deal teams. For the fund that I lead, our middle market fund, our companies tend not to have those functions internally. Our team, my deal team, including myself, we act as a outsource Corp dev. We're scouring the universe for really great acquisitions that could be a million dollars of revenue, it could be equal to the revenue of the company in question and go and try and chase those. Of course, those have a funnel to them that we have to... Just like a sales team would, we do bi weekly calls on those and we work those funnels and each of us have responsibility over different names.

But that's a big function. That's a big part of what we do after we sign a deal. So hopefully that sheds some light on our approach. There's so much more that goes into it. But at a high level, those are the key initiatives that get kicked off when we sign a deal.

Karl, I really appreciate how intentional, comprehensive, and integrated your approach to value creation is. And as I was listening to your thoughts there, it's one, value creation starts before you've even made the investment, to the thoughtfulness of how you actually kick things off by, A, getting alignment first, and then going through what sounds like a very intentional onboarding process for these executives and bringing these huddles together with the portfolio company, not on a quarterly basis, but this monthly doing very intentional deep dives. So you're heavily investing in getting things going right at the very beginning. And that's really hard to do. But if you take that your time and you're intentional as you are, it's got to profoundly help the success of kicking things off.

The investment is made in the first year, really. Your make or break moment is the first 12 months. And so we've got to get that right. If we get off to the wrong start, it's hard to achieve our four-year plan. It's hard to go create the capacity and the capabilities to go consume and absorb M&A, and we'll end up falling behind in a real way that will set the investment back. That first year is so important.

I remember even to go back in the early 2000s, when I started PE, whether you're doing a new deal or an add-on, you're like, All right, everyone's exhausted. Let's just give them a couple of months to settle in. In retrospect, as we learned, that was the exact wrong thing to do. Because then it's just, A, they're very nervous. They don't know what's going on. Then waiting for this first board meeting. Then B, you're just wasting all of this opportunity and time to get things going fast in the in the right direction. Versus if you apply that rudder in that intention and everyone's going out of the gate strong together, you're setting things on the right track, and then that velocity just picks on itself and the flywheel gets spinning right away. I really appreciate how you frame that. The other thing that I think was really important that you shared was the intentionality with the data. I think a lot of companies, particularly middle market businesses, they don't quite fully appreciate, A, what they're getting into with the data, but B, the power of it. I think as the larger cap firms, they've been through several cycles, they get it, they have the full-blown teams, but lower and middle market teams, it's just such a huge value creator for them because it shows you exactly how the business is working in real-time.

If you can figure out where to look at the right times. Not only does it show you how you did, but it helps you predict the future where you can bend space and time to your will versus being a victim or a reactor to it.

The last thing we want to be is reactive to a problem. If that's the case, then something went wrong somewhere.

Particularly with software companies, you have so much of it. If you're intentional and thoughtful about how you can use it, there's amazingly powerful things that you can do to get very quick ROI. Why? And then the hard part is, how do you keep the data clean? I started off in industrial private equity, and I fell in love with Lean Six Sigma. I originally would invest in high precision metal grinders, essentially. And anytime I developed this philosophy, anytime there's rotation and force in a process, it wants to lose calibration. And then you get a recall from Ford, which would be like heart attack. But it's the same way with technology and software and data, there's also a big investment that's required to keep your data useful to you. Absolutely.

We're in this period of time, I'm calling it a washing machine economy, where it's like good news, bad news, good news, bad news, and it's agitating back and forth.

At least personally, from our vantage, it seems to be two good news is now for one bad news on the macro cycle. Carl, I'd be curious, what are some of the top pieces of advice that you and your colleagues are offering your portfolio companies to successfully manage through the period that we're working and living through right now?

We ask ourselves these questions in our own staff meetings all the time is, what are the pieces of advice that we give our companies that are working right now What we end up realizing is the advice that works now has been working for 15 plus years. Sometimes, some messages resonate more in certain markets than others, whether we're at a frothy stage in the market or near a trough. But we always tell our companies a few things that I think are universal. One is if something isn't right, fix it immediately. Address it immediately. If we feel like we don't have the right leader in a certain seat, if we feel like we're spending time on an initiative that isn't yielding enough, if we feel like we're losing out on an opportunity because we lack focus in a certain area, go fix those issues immediately. Don't wait for tomorrow. Don't wait for the quarter to end and for us to hit the bookings number that we think we can achieve and for the stars and moon to align. It's better to address those issues quickly and not wait for things to be totally 100% fully buttoned up.

Sometimes done is better than perfect, as they say, and that absolutely applies to our companies. We encourage our CEOs to move quickly. That's good advice in every market, I think. In some of the more challenging markets like we had in, say, 2022, like we had during the great financial crisis, where we do have to pull back on costs, and those don't happen often, but they do happen, those windows of time, those moments, We always tell our leaders, if we do need to make a cost adjustment to our employee base, do it quickly, do it swiftly, do it once, and do it deeply. But by doing it quickly and deep, you avoid this cadence of every year, the GE style bottom 10%. We fundamentally reject that approach, and we believe that when the company feels settled and when people at the company feel empowered to then get back to their work and not worry or look behind their back, we get the best results. In those moments, we've tended to go deep with our cost initiatives, and that's tended to work. Without fail, every time we've had it to do that, when the market turns back and we're healthy, we've got good cash flow, we hire back.

We end up with more heads on the back end than we did at the beginning before we ever took any action. That's a piece of advice we give, and I think that's worked pretty well for us. Sometimes when we're debating an investment decision, I'm just going through this right now, in fact, with one of my companies, one of my newer companies, is you're trying to make an investment decision, whether it's an organic investment, a new product, something with respect to your IT infrastructure or M&A for that matter. It's a tough one. There are puts and takes on both sides as to whether you make the investment. The tiebreaker is what's best for our customers. What will empower our customers to want to spend more and renew at higher rates over the medium to long term. If we use that as our North Star, we tend to make the right decisions for the business and in turn for the investment. That's an important lesson that I personally have learned more recently when you're wrestling with these tough decisions, it could go either way. What's best for the customers? Lean into that direction.

I really, really, really liked what you had to say there. On your first point, If something doesn't feel right, we all have this intuition. There's this analysis going in our subconscious that we can't always understand, but you're usually right. It's that gut feel that is unbeknownst to many of us. There's lots of analytics going in there, and usually both on the surface and behind the thing. I think about 20 years in PE, every time I encounter those situations, in retrospect, as I analyze to try to get continuously better on the next one, I don't think once I said, Whoa, I I wish I waited six months more. It just never happened. It's the scarier thing to do to take that action earlier, but almost invariably, it's the better thing.

You completely nailed it. The advice seems obvious. Anyone listening to that would say, Yeah, duh. There's a problem. Go fix it immediately. The problem is sometimes those are really scary decisions. That's a leader in the organization that's been there for 15 years, and they've got a lot of loyal followers at the company, and there's a lot of tribal knowledge that's with that person, and that's a really hard decision to move on from them or to bite the bullet and replatform your product. Well, this is the product that you've been selling your customers for 10 years, and this is the 98% of our revenue today. How can we start to replatform that and move away from that and migrate customers away from that? It sounds obvious, but sometimes it's really, really scary. This is where having a really strong mission-driven leader is so, so important to be able to say, No, this is the right decision. We've weighed the risks. We know what the opportunities are. We're going to go execute on that, and we're never going to look back.

Your whole point there gels also so nicely with your second point. When there's something that needs to happen, be decisive about it. Be assertive. Do what you need to do, and don't do these action by a thousand little cuts, because to your point, I think you so eloquently said it, it creates toxicity and fear. Everyone has fear over time, but to have a lasting, perpetual culture of that can be nothing but bad for outcomes. And so I really also appreciated that people, I'm sure, are going through that and have been going through that over the last several years and over periods of their lives over the last several decades. And so it's just that same consistency of thought of be decisive, be assertive and have a bias towards action versus maybe it's easier to think and posture over things. And perhaps as I look at my former self and I'd wring my hands. And then lastly, just to put a bow on this, this whole idea of your North Star being what's good for your customers. Inevitably, what's good for them is... There's going to be ties. Sometimes you got to work them there to get them the right place.

But at the end of the day, if you do what they want and what's good for them, you're going to be in the right place. Even as I think about, when I was, after nearly 20 years in P, I started Blue Wave, and I thought I knew exactly what all these P firms wanted. I'm going to show you. And then I went out and immediately we tumbled out of the gates. I almost shut the thing down three times. Like, this is the craziest dumbest thing I've ever done in my life. And then we had the audacity to ask our customers what they wanted. And the surprising thing to me was they told us. I think, once again, the three things that you shared are just so foundational to business and beyond.

Yeah. Let me say, again, on doing what's right for the customer, sometimes it sounds obvious, sounds like a nice piece of advice. Hey, that's great, Carl, but sometimes that's hard. Sometimes you need to raise prices. Sometimes you need to charge more for professional services. Sometimes you need to unbundle and upsell your customer. Well, those don't seem like the right decisions for your customers. And yet in the long run, sometimes they can be because you use some of that incremental profit to invest back into the platform to build the solutions and the features and the capabilities that those customers want. Some of our best companies, when you go to their user conferences and the customers, it's like it's evangelical. You get a room full of people or a convention center full of people. All they do, every day is live inside this software. Now they're all together. It's so wonderful to hear the stories about how our software makes their job so much easier and makes their lives so much easier, and that the new features and the capabilities that we've delivered have really met the promises that we've made. Those are the best conferences and meetings you can take as a private equity investor.

We love going to those user conferences. In each one of those cases, we raise prices, we unbundle, we charge for new features. We do all the things that make sense for the business, but that ultimately also makes sense for our customers. There is a healthy balance there, and we always try to strike it. To your point, it sometimes this sounds easier than it is in practice, but we mostly get it right, I think.

Carl, I think you brought up a beautiful and important nuance to that last point. Is some of the things that you might be doing as you think about the customer, like right out of the cuff when they say, no, we don't want you to raise our prices. But you're thinking and moving three to five steps ahead. We're We're like, yeah, but we're going to be able to reinvest that. And this product is going to be so much better in ways you don't even know yet, but you've told us what you wanted. Having that perspective also of thinking in a multi-dimensional way in multiple steps ahead is so important, too, versus a lot of things that you're going to do there, but good for your customers, maybe from an instant gratification standpoint, won't immediately get the whoah, but two, three, four moves down the board for them, it's going to have profound impacts that I fit them.

Yeah.

Maybe to turn the page here, one of the things that I'm a huge collector of is other people's wisdom. And that's probably been one of the secrets to my modest success in life is if I had to figure out all these things myself, I'd be in a lot of trouble because I'm always doing what I call the Walmart form of innovation with myself, where I'm just like, spiraling things that other people have figured out and attaching them to myself. And Carl, I'd be curious if you were to go back to 22-year-old Carl and talk to him.

That's very scary. Not that guy.

Be careful. Not that guy. Be careful. And acknowledging 22-year-old Carl may not have listened to this when you come back to the back to the future mobile. But if you were to come back to 22-year-old Carl and give yourself a piece of advice, what's one of the things you'd share?

Oh, man. Probably a lot, but starts with trust your instincts more. I probably didn't do that enough. If you're generally doing the work and you're working hard and you're accepting good feedback and you're listening, which is probably something I also didn't do enough of when I was 22, your instincts will generally be more right than not, even at a young age. If I had to go back, I would tell that person, Trust your instincts a little bit more, which is another way to say be a little bit more confident. Believe in yourself, that is so cliché, but it is so true. It's so much easier to say in your late 30s than when you're in your early 20s. I would probably tell that kid that along with many other pieces of feedback, listen a little bit more, talk a little bit less.

I love that advice. And it's one of the things, too, is when I hear you talk about that as I think back in time, if you've done the hard work, you're positioning yourself to catch these waves. There's so much going on. There's a calculus in your mind that's going on that you're not even aware of. But as you think about the instincts, in some ways, it's like you just know it. I mean, you don't know why, but you've done a lot of work, both overtly and subconsciously, to know it and to have that trust in what you're concluding, not only in the top of your mind, but also behind the mind.

I think you're right. When you're young, sometimes you just don't have the confidence to go with that instinct. You have imposter syndrome. You're saying, Well, I'm new to this job and I'm learning. So that can't be right. I can't be right and that person is wrong. That can't be possible. Well, as it turns out, if you've done the work and you're the deepest in the numbers and you spent all night analyzing it, you might be. So speak up. And it's an asymmetrical trade, as we would say in investing. The benefit of being right and speaking your mind and trusting your intuition is a lot better than being wrong. If you're wrong, okay, that's okay. Move on. It's not a big deal. It didn't feel like that at the time, but that's probably the advice I would give myself or anybody in that position.

I'll share that with my kids, and we'll see if the 13 and 16-year-old version of their future self will listen. I don't know. But no try, no get. So let's see. So maybe to wrap things up, Carl, the other thing that I think is a very common feature, attribute, habit of people who have been successful and continue to be successful over time is that they're voracious readers, and similar to what we've talked about here, borrowers of wisdom. And that often comes through the lens of books that people write.

Sure.

And I'd love to hear what are some of the things, some of the maybe books that have had an impact on you?

Yeah. And I want to get answer on this, too, Sean, because I suspect you're extremely well-read, and I know that, so I want to get your opinion. I'll give you a couple. How about that? I'll give you one professional and one non-investing-related. My favorite investing book is The Most Important Thing by Howard Marks. Howard is the founder and chairman of Oak tree Capital, which is where I started my investment career. So back in 2009- He's a legend.

Yeah.

Back in 2009, in the depths of the financial crisis, I had an opportunity to work in the Special Situations Group at Oak tree. It was a once in a lifetime opportunity. I was very blessed to be in that position. I moved to LA, and I started working at Oak tree. I knew nothing about investing. And around the time that I was leaving in 2011 is when he released this book. And if anybody knows about Howard and about Oak tree, they may know about his memos that he releases every so often. Well, the book is a compilation of all the philosophy and insights that he pours into his memos. It's just a fantastic book. It's not a technical book. It's not a business school guide, but it's more about the philosophy of markets and second-order thinking and market inefficiency and bubbles and the psychology of bubbles and the psychology of pricing assets. It's just a wonderful book. I revisit my notes on that over and over. I encourage all my team to pick it up if they have a chance. In the spirit of Warren Buffet, it's a no-nonsense, very clearly written set of philosophies around how to think about investing that you can then apply to whatever markets you're in, public, private, credit, distress, whatever it is.

I absolutely love that book. Then something more fun, we talked about, I'm a little bit of a comedy nerd. We talked about that. I loved Born Standing Up by Steve Martin. It's one of those books where if you have enough people tell you to read it, it's like, Okay, what am I missing here? I got to go read that book. I finally read it about three, four years ago. And it's just a phenomenal book. First of all, I love Steve Martin and I love comedy. And so the book is in part about his journey through show business and becoming the biggest comedian in America in the 1970s, 1970s, and '80s. But it's a book about resilience and believing in yourself. And one of those books that shows, Hey, if I can do it, you can do it. It's exactly that. And he has so many awesome little pieces and nuggets of information and wisdom in there about his journey to the top. And one of the ones that I absolutely love this advice is, Be so good that they can't ignore you. Be so good that people cannot ignore you. I think that is such good advice.

And so highly recommend that book.

That's amazing, both of those. I have not read Howard Marks' book. I read his memos, I listen to his podcast, which is also a really good one. It's called The Memo. It's a great listen for someone who is a legend in his own time. So what did it amazing experience, particularly during the 2008, '09 time period, to see a maestro at work and work with people who I'm sure have got common philosophies. And then Steve Martin, when you said that, my face lit up. And as a child of the '80s, where we were in some ways raised by movies, and it's probably the only way I know how to communicate with our team is through movie quotes for movies they haven't seen. But if you looked at what was on our reel at our house, it was plane, trains, and automobiles, and Father of the Bride and Dirty Rod and Scoundrels. Hugely underrated movie, if people haven't seen that. Three Amigos, Roxanne, My Blue Heaven. And then a circuit of his Saturday Night Live hosting shows over time. And so I love that you had that. And somehow, I haven't read that book either. So I've got two more that will be one-click Amazon right after this.

Love it. And hopefully, I'll be able to cut through them. My wife is getting more and more not putting up with my habits as much with these piles of books that are stepping up. So So this has been an amazing conversation, Carl. I've learned all sorts of things I wish I knew before. So thank you, thank you, thank you for joining us and sharing really some pearls of wisdom here.

No, thank you for having me. This was a lot of fun. I really appreciate you giving me the It's an opportunity to share our thoughts and what we do at Thoma Bravo. And we're really proud of what we're building. As our founder, Orlando Bravo, says, we're just getting started. And that's absolutely true.

I think what you share here clearly intangibly illustrates why Thoma Bravo is one of the most successful private equity firms in the history of private equity. We appreciate you and really enjoyed our conversation today. So thanks again, Carl.

Thank you, Charles.

That's all we have for today. Special thanks to Carl Press for joining. If you'd like to learn more about Carl and Toma Bravo, please see the episode, Notes for Links. Please continue to look for the Karma School of Business podcast anywhere you find your favorite podcast. We truly appreciate your support. If you like what you hear, please follow, rate, review, and share. It really helps us when you do this, so thank you in advance. In the meantime, if you want to be connected with the world's best in class, private equity-grade, professional service providers, independent consultants, interim executives that are deployed by the best business builders in the world, give us a call or visit our website at bluewave. Net. That's B-L-U-W-A-V-E, and we'll support your success. Onward.