The CEO who turned down VCs, bought back his company, and built a $1.7B SaaS empire - Ross Andrew Paquette

29:59Good. I was happy with that news. Yeah, for sure. Same, same. So I've definitely scaled that back because I just don't think Maripost is big enough for me to be spending any of my excess time assisting other businesses. But I'm sure that'll come back in the future. And I think it relates as well to sort of the long-term planning of Maripos, where, of course, you know, the core business is always the first and foremost. But then we have Maripos Ventures and then we have Maripos Cares, which is our nonprofit. So, you know, it sets up that like, you know, in 10 years from now, maybe I'll spend a lot more of my time in the other two areas than I do, you know, on the day-to-day of Maripos itself.

30:39Yeah, that's really cool. And talking about like growth and scale, like some of the things we see a lot, you know, like and maybe a bit less on SaaS businesses, but you've done a lot of like acquisition and build up. Yeah, we have. Yeah. More than most servers. Yeah. Yeah, exactly. So can you like walk us through like the strategy and how you approached it? For sure. So for us, this is kind of a longer story, but back in 2015, it became very obvious, as we were talking before, going from$300 ,000 to$27 million in revenue. But it became very obvious at that point that this$30 million range was sort of like the limit that Ross himself as relatively one individual could build and grow the company.

31:28But one of the other variables was that we had to become a multi-product solution. And so, you know, like at the time we would compete with, I mean, everybody, but Salesforce Marketing Cloud or all the marketing clouds, exact target responses. There was Bronto back then, ListTrack and so on. But, you know, we would take a customer from them. They would take one from us, but it really slowed the growth. And so the idea became very quickly like to become an e-commerce marketing automation and help desk solution. So, you know, from a circular customer centric approach, you know, somebody would come in, they'd buy marketing cloud, we would sell them at e-com.

32:05And then, of course, they would need help desk solution as well. And so that would really round out a strong value set from a customer standpoint. Long story short, and leaving out sort of like that investor period where not so much happened or basically nothing happened from a product growth and product development standpoint. we acquired our first company which was Neato called Neato out of Australia and they were an e-commerce and retail solution they also do B2B, it's still a very valuable platform we have over 2 ,000 customers, 2 ,400 customers I think still utilizing that system more and more of them are moving over to the Meripost platform but that's another component to it but really we just lacked the experience in the e-com and retail space We were struggling with multi-currency, multi-store, basically anything with the word multi in it at the time on that front.

32:56And so acquiring that business really, really helped us move the ball forward. It was an extremely difficult acquisition from a culture perspective. I would not want to relive that year, I'll tell you that much. We actually acquired another business in Australia to stabilize that business. The second one was Retail Express that was a retail solution or point of sale solution as well. An amazing founder there. I really, really enjoyed working with him. He's since moved on, but we're very, very close. So that's definitely a success story there. And then we actually acquired a company out of Sweden, so where I coincidentally live part of the time, that was a partner of Nito that provided search and merchandising functionality, or still does, sorry, I should say, called Findify.

33:46And so those were sort of like the main acquisitions that we made. And part of our strategy moving forward is still to make acquisitions. There's a number of benefits from a customer acquisition standpoint, from a tax benefit standpoint is a big one as well. But for the last couple of years, we've definitely paused while we ensure that the organic growth of the business really helps us move forward. And can you walk us through maybe your thought process towards an acquisition? Are you looking for new revenue, less churn? How exactly do you think of it? So in the first example was that experience.

34:25That's what we were looking for. Of course, the revenue and all that, you need that. We're not going to buy a company just for the technology or just for the team per se. There's got to be a revenue addition and value. We were able to take the revenue of Nido and make that profitable much like Maripost. So it's really just stacking those same benefits or values that Maripost has on top of those businesses. Typically, we're looking for there to be a close connection again to what the Maripost vision is. So we wouldn't go out and purchase as an example. Actually, we do inventories. Maybe we would.

35:01I guess we're looking for something within our sphere of technology. So we're not looking for something that we're not going to do. So as an example, we may buy a CDP type company because Meripost has a CDP or customer data element to it. And so it's very easy for us to literally transpose that data over, talk to the customers and be like, what are like 90 % of the reports that you really, really need or analytics or metrics or so on, and then make sure that the Maripost side of things covers that. So we're looking for that coverage there in particular. Typically, the other side is, as you were saying, is the revenue and the customer aspect.

35:37We want to look at the customer base and understand, okay, once we've got them using our version of whatever it is that we acquired, what is the likelihood that 80 % of these customers are going to buy three more of Maripost's products under the Maripost single technology stack that we ourselves offer? And I think that's the other thing is like, we're not looking to buy the tech like that never really works. Like it works if you're Salesforce and you can spend two billion buying exact target and throw 2000 engineers and be like, guys, like create a seamless or a reasonably seamless experience around it.

36:12But it doesn't really work otherwise. And I think that's why you don't see typically see companies under 100 million making acquisitions. It's just it doesn't work very well. And again, for us, like we nothing that we've acquired. I should not know. I shouldn't say I find if I we did. um did we bring the technology into into our own into the maripost platform so neato over time you know someday will be uh you know won't be next week or certainly won't even be next year um but people will continue to log into maripost use neato for certain things and then over time we're just slicing off that that technology moving it over moving it over moving it over okay so so if i understand correctly like uh every time you get you make an acquisition you're more in the buy or build type of mentality like uh you want something that has like adjacencies that way uh potentially you can have like more not even adjacencies it has to be something that's in our own vision so remember i was saying earlier that we were building e-commerce uh marketing automation and and help desk that was again 10 years ago um you know then it became marketing automation help desk and e-com and then retail so point of sale um and then we added search and merchandising as i mentioned with the which is really an offshoot feature of the e-commerce side of things cdp as a product became natural for us because we had to build that all the customer data is is in maripost in the first place um and then there's i would say the the uh seventh element is basically like the ai functionality that we actually designed also almost 10 years ago um and so where i'm going with that is like if it doesn't fit within that sphere right if it's like if it's another thing then no we don't want to we don't really want to get into that and again there's there's those subcategories much like i mentioned search and merchandising and i touched on inventory just as an example or say order management or shipping plugins like some of that stuff could can make sense because we are already doing exactly that and um how exactly do you get like uh the targets like how do you find them do you have like bankers working for you or you just reach out by ourself which is also okay Yeah, we didn't have any representation.

38:17Of course, like we are, you know, receiving inbounds, right? Like naturally, excuse me, bankers are looking for companies who have acquired businesses in the first place, which is not that big of a market to look at. So we have a lot coming our way. And of course, we keep relationships going. And we have a lot of partners. I mean, no different than, say, Shopify. We have 100. Yeah, they have 10s of 1000s, I think, if I'm not mistaken. but we have hundreds of tech partners. And a lot of times, you know, we talk to those partners and we're like, you're kind of doing the same thing that we're doing here.

38:49Maybe again, it's an inventory or loyalty or something like that. And so there's an opportunity there for us to have that type of conversation. If, you know, if they've been, again, running their business for 10 years and they're like, you know what? Like this would fit much, much better under the Maripost, you know, banner than it is me continuing to build out this sort of single function technology. I remember like when before I made actually my first acquisition and acquired like a business I think we had like that chat and you know it inspired me kind of to try to replicate and I remember like one of the advice you gave you know it was something in the lines of get ready you know like for things to get pretty ugly you know like when you do an acquisition and get ready for you know the founders you know like that of the company you acquire to to sometime like uh do crazy things yes can you like maybe explain how you handled uh you know like the the the nato situation that was really hard because it was during covid number one it was really difficult as well uh because it was in australia which is just far away from pretty much everything um you know so like just time zone wise is challenging when I think when I originally had more exposure to Australia from a business perspective I thought that and this could be related to like north and south right I think if you're working with people in in Sydney and Melbourne you know that's probably more like a Toronto or Paris in the context of you know the more rural aspects maybe not rural is the wrong question but I think that from a culture perspective it was just it was just a big difference.

40:34Nito was a very young company, like their average age of their employees was, I think, like 25 or something like that, whereas Maripost was more like, you know, 35 or even 40 for that matter. So I think those areas create a pretty significant challenge. The other thing as well is that, you know, with Canada, Australia, the UK, right, you think of the sort of British Commonwealth, I always had this assumption, and I was probably somewhat incorrect in that regard, you know, that we were very similar. And it's, we're actually not like, I think Canada is so close to the US that, you know, from a business perspective, we still have this very, you know, capitalist or business centric approach, you know, from a, from a growth standpoint, or the contribution we make.

41:18And it's not that people worked really, really hard, but they still, they were much more similar, actually, to Swedes, in my opinion, or my experience. So that's been kind of the core element from that standpoint, that made it difficult. And so So in terms of just handling it, it was really hard. Actually, the founder, he worked really hard as well. He really tried to bring the team along and really tried to focus on the pros of what it was. But ultimately, they had built just a totally different culture than the one that we had and the one that we wanted to maintain. And I think if I could say one thing, it's that I would have been or I would be and will be much more strict on the alignment with the business.

42:05So it's like if you're not aligned with the business, feel free to exit the business early on. I have a much stricter, stronger approach to where we would position people from an acquisition within the Maripose businesses. And it doesn't matter who I talk to whenever they've made an acquisition. if they put anybody from the acquisition on their executive team, it typically goes sideways. You know, I think that the founders, right, it's like they're either going into some type of product or sales-related aspect, right? Either they're still really good at selling their product or they're still really good at designing.

42:37And so those are the best areas. So those were some of, like, the strong learning lessons. Like, don't sacrifice your own culture or don't sacrifice your own value. Not values maybe is the wrong way of putting it, but principles maybe is a good term to use there. for the benefit of this team because they're not your team. You bought them, and that's a totally different piece. And it reminds me of one last thing that I continually reminded myself with after the fact. When you make an acquisition, typically, it's a smaller company. So I think Nito was like$10 million in revenue. Ameripost was like$40 million in revenue.

43:14So we're asking people with a different level of experience from a size and a scale and expectation standpoint to mature in three months, which took us 10 years to get to in the first place. So I think that's a really important factor for people to consider. And I don't think they do. And again, that's why I think most acquisitions are seen as failures or they blow up or the founders leave pretty quickly and so on. And how did you structure the deal? Like, was it all cash or was it like also with an earn out based on milestone? Yeah, NIDA was a really unique one because the company was mostly owned by a company called Telstra, which is the largest telco in Australia.

43:57And so it was like if you knew them well, I mean, I don't know who the main telco is in France as an example, but it would be like AT &T in the US buying a small SaaS company that has nothing to do with their business. But what Telstra was trying to do was to build up this network of SaaS companies that would somehow benefit their customers. Again, I don't really understand it. Anyway, long story short, they figured out that that wasn't going to work, obviously. And then they started exiting these businesses. So it was mostly cash because there was no opportunity outside of the founders to join the cap table or anything like that.

44:37We weren't going to bring Telstra into Maripost. Not that I think they would have wanted that. and then from an earn out perspective we did have one but it wasn't it was small and it wasn't really relevant because we knew what we were buying and we were just like we'll take it as is if that makes sense and what was your plan when it comes to the whole team because like if I'm putting myself in your shoes you have like extremely highly profitable business you're making like 50 to 70 % EBITDA margin which is like insane so you have cash to acquire businesses but then you know like you look at the business metrics and obviously they're not as profitable as you are or like it's not it's not likely so essentially you're like okay i want to maybe change my cost structure so potentially like the first step to change a cost structure is to let go some people especially because when you merge some functions are not helpful anymore but how exactly do you see it from a people perspective and maybe you can walk us through, you know, like how big was your team when you acquired them and how it ended basically?

45:46Yeah, I think they, I mean, the team, a lot of the teams stayed in place for, for quite, like, of course there's the administrative roles, right? HR, finance, you know, some of those areas that, you know, are relatively or typically immediately taken over, emerged into the, the main organization. But I think where, where I would go with that is that was, that was, those were part of the mistakes that we made we we allowed you know certain people to stay too long we allowed certain systems to you know to run in unison for too long um those things we should have moved moved much much quicker on but i i think they were around 100 people when we acquired them and then within maybe a year was still 80 you know it was maybe a little bit more than 100 actually now they think about it um you know so it's probably like you know 20 or 30 people that you know either self-selected out because it wasn't for them or or um you know or we exited because it was there was a redundancy that was occurring there um again uh going back to what i would have done differently is i would have had a much much stronger plan or strategy to manage that on like arguably like a week over week or and or definitely a month over month basis meaning like this is when you know this group of people are going to be exited or this is when we're going to move off of this technology or this is when this is going to merge we were definitely operating more in like the wild west method of of acquisitions when we did the first one like like i said it was me and my or like we had a junior director of finance me and him did the acquisition together he handled the in the you know the the integration or the financials aspect of it all um that is not normal i mean it's yeah it's actually the opposite of normal i think uh But again, we learned a lot going through it.

47:30And for better or for worse, I would do that acquisition again. And I think that's always good. Yeah, because you learned a lot. And for retail, yeah, sorry. No, I was just going to say, no, just for the learning note, it was also because it was the right acquisition for us to make. Yeah, financially, it made sense. Yeah, financially. And for Retail Express, did you have a proper plan in place? No, still no plan. No, still no plan. No plan, because like I said, that year uh after nito was extremely difficult and we were just like in arguably you know desperately trying to just stabilize the first bit the nito business you know with some mature leadership at least in place um yeah so that was more of the call there yeah yeah yeah on our side we the first company we acquired i think it was a lot smaller so around like uh one or two million in revenue so it was like much smaller team but I remembered like what you said and I was I tried to be like careful with everything yeah but it's yeah go ahead sorry no no no I was saying like it's I think it's it's always tricky as you mentioned because you mentioned like processes like the tech that you're using what tech stack everything like it's doing integration you know like if it's not on the same tech stack and you want something that's working well it doesn't work because you mentioned like uh salesforce making acquisition and you know being able to have 2 000 engineers even with that to be honest like uh we see it like uh there are very little acquisition in the sas world that actually work really really well like it's very tricky for sure yeah absolutely absolutely and you know when you were talking about the one to two million so find if i we acquired out of um sweden was about two million in revenue and i would i would never do a small acquisition like that again, it's just not worth the headache.

49:20Because to be honest with you, it's the same amount of work, 20 million in revenue or 2 million or 50 million even of revenue. It's the same amount of work, the same amount of stress. You're still dealing with like teams and founders and cultural issues and so on. So it's like, if you're going to do it, make it count. Yeah, I feel like this is, I've got the same thing with the different real estate investment I made. When you have to renovate like a tiny, whatever apartment and have people to like rent it out it's the exact same shit as if you have like 500 or yeah exactly i had a bunch of uh residential real estate units in in toronto and i ended up selling them all because i was like this is so much work it's like why don't you buy one massive building instead of like five small ones yeah i feel this is like the the biggest like issue for a sas founder because you know like because we work so much on the computer and we make like a lot of money with like high margins eventually when we we want something that's like tangible you know and real estate is like pretty nice but eventually you get into real estate and you look at the margin you look at the time and you're like i mean i like it but you know at the same time it feels like uh yeah the the toxic relationship you do your job than the job you already have yeah yeah exactly exactly and um yeah when when it comes to like uh the the structure just going back a little bit on this because i know you had like obviously like a super high EBITDA margin but were you paying out of like uh your own like pocket in a sense with the company's money or did you take like leverage and uh and get some debt uh we did a little bit of debt for the first acquisitions for the retail express and and the needle one the other one was obviously much smaller um like yeah we took about 30 million in debt but i'm very anti-debt like obviously there's scenarios where it's beneficial, but, you know, from a business perspective, you know, meaning like on the Maripos side, I'm not, I'm always, you know, I'm not keen on that because something can happen, right?

51:18The market changes, who knows, maybe you have too much churn in one, you know, one year, all of a sudden you have a real problem on your hands. So we try to, you know, limit our debt as much as humanly possible. And frankly, you know, it's more about managing that profitability that we've been discussing, you know, throughout or even previously to the benefit of those debt load so use the free cash flow we have you know to be invested elsewhere to then generate another return then use that return to pay off the interest that um you know we have on the debt if that makes sense yeah of course and uh to because you mentioned very quickly like uh you know when things go bad and your trend might increase etc etc like what's what's like uh the one or two metrics that you really like obsess over for uh for your business revenue and profit okay i mean end of the day, those are the two top and bottom.

52:07And when I say profit too, I'm not talking about EBITDA. I look at before tax free cashflow in particular, typically because of the acquisition mindset that we want to have, how we can acquire a business and have that decrease via the expensable amounts of the acquisition is extremely beneficial. But yeah, at the end of the day, it's like everything else in between to me is just like, it's noise. It's like, did our revenue grow? yes did our profitability grow yes did it not why you know and let's just look at it from those kind of specifics but i mean of course we have like hundreds of metrics that we look at and i we are at the same time or i am definitely trying to simplify that you know so it becomes more like i don't know if you've used bare metrics before as an example or there's like profit well i think there's a whole bunch of them uh now is one of the regrets that i have is i didn't put those types of platforms or groups of metrics in place sooner.

53:02I think that if you're really strong on the sales side of things, which Maripost has been historically, this kind of self-serve element and how the subscription management side of things works with regards to getting those platforms really helps you understand the nuances of any change. We lost this customer, we added this one, this one upgraded, this one downgraded. You start to become, I think, a bit obsessed with that. And I think that's what's needed, frankly. Yeah, and it's great. I mean, I personally use like ProfitWell and I think like Patrick did an awesome job and receiving, you know, like this email where it says like, hey, you're like 5 % ahead of the goal, 6 % ahead.

53:41Yeah, exactly. Every day, you know where you're at. It's, I think, yeah. Yeah, go ahead. Sorry, I'm excited. Yeah, I think they really created something that you know that you want to check out. Like I checked ProfitWell, like even though I'm not involved in the day-to-day anymore, like I still take profit well like weekly or daily like yeah yeah and but your business is mostly um self-service correct yeah it's uh yeah it's mostly self-service yeah yeah yeah so that's where we for us we were shifting from 100 direct sale to just now like literally just now January 2026 after again many years um opening up the self-service side to me that's like that's the most exciting because like there's no question that we can sell our platform or that our platform is amazing from a, again, from a direct sale perspective.

54:26I want people who can just come in, like you said, add, add a plan, you know, go, go from free trial to cancel, like without ever having to speak to somebody as a second, second element, of course, to the business as well. Yeah. I think for me, that was like, uh, probably cause by, by trade, I'm like a chemical engineer. And then, you know, I, I studied like marketing and ended up like, uh, yeah, doing a SAS. yeah but yeah but the the the first time like because prior to the sas i had like an agency and you know it was similar like if i wanted to get money from someone you know i would need one two three four meetings do the work etc but the first time we received like that notification from stripe about like a customer that i had never heard of i didn't know who they were like where they were coming from it's it's just like magical you're like okay like this is this is a new world exactly that's i'm really excited for that for us yeah i'm excited for you too because it's uh yeah it's awesome and uh what are like uh the the the few projects you're uh excited about in the in the coming years uh to be honest with you that i mean we're not going so far out to pass the next six months i think that's been a challenge as i said you know in our entire conversation that we've had over the last 10 years at maripost in terms of getting products out to market.

55:48I mean, in the last six months, we launched our new commerce solution. We launched our help desk solution. We are launching self-services we mentioned this month. We launched our AI solution. So there's a pretty significant amount that's happening in real time. And we've got a new head of product and he's just doing an amazing job at continuing that momentum. And so I'm going with this is I think that a big part, I genuinely believe a big part of that momentum is because you've shortened the timeframe. I think that you can, of course, we should have a, you know, as founders, we should have a 10 year, you know, kind of vision for the business in terms of those core elements.

56:23But from a delivery perspective, you know, it has to be that short amount of time, because otherwise, people just start thinking in years, or that something could take years. And you're like, that's not going to take years, it should take like two weeks, you know, I mean, let's get back. And that's when we started, of course, I mean, I think it's very similar everywhere. It's like we were, we were updating the code every day, you know, And then every day turns into once a week and then it turns into every two weeks. And then all of a sudden you're like, you know, how often are we actually excited about the business and what we're putting out there when it's so extended in terms of the time frame?

56:56100 % agree that creating urgency as you scale is something that is quite hard. And I think, was it like Parkinson's law or something? like a task take as much as much time as you actually like allocate a certain amount of time or whatever but it's uh yeah pretty much what do you mean you know it's like um essentially like if you tell someone that they have like one day to do something they would do it in one day but if you say if you tell them that they have like a week whatever they decide yeah yeah exactly like they can also spend that amount of time so it's always like for sure it's kind of your role to decide on the yeah yeah yeah exactly if you have low expectations you're going to get low results if you have high expectations you still you may not get the expectations you want they're still going to be a heck of a lot higher than than they were that i would say that that's kind of a funny point because a significant amount of our challenges as well over more so maybe the last five years have related to that that mindset and and distilling that mindset through the rest of the company right it's like it comes down you know at the start of the conversation we're talking about, you know, kind of the young and hungry, you know, executives or up and coming executives that you want to have running your business, you know, versus say that people were sort of, you know, half retired.

58:15That's a really core element of it, right? They just, they are worn down in their life. So they have low expectations of their own team versus the guy coming in 30 years old, you know, he's like, I have 10 things I want to accomplish today. Like I work on a daily, you know, kind of what you were just saying, like I work per day, I wake up and I'm like, what do I want to achieve today? Not this week, not this month, definitely not this quarter. And I think that, again, as an industry, we've gotten into that longer time cycle or time frame. Yeah, definitely. And I know we're almost running out of time, so that would be the last question.

58:49What's one advice you wish you had received when you basically started Marrowpost? Yeah, spend a lot more time on recruiting. Okay, I agree. time yeah i mean not only a lot more time on recruiting a lot more time understanding the type of person that you need to work here and and really uh leveraging you know outside parties who do have that experience like the way i interview people now or the way i have you know conversations with with executives that we're hiring as an example is completely different than it was three years ago and you know i and i would take that back 10 years ago frankly i think that you know i think we i can only speak for myself but you know i rely a lot on what people say right and you know if they're like i you know this is what i built here but what you know we unfortunately just do live in the world where you know people aren't always completely honest they're definitely not as honest as we would expect in the interview process so i'm sure you've interviewed people and you know they're like you're thinking this person's gonna make all my dreams come true and then within the first like month you're like oh maybe i wasn't there is no messiah yeah exactly well no but it usually comes down to what your expectations were going back to that same comment so i think that that recruitment aspect is something that i wish i had spent a lot more time meaning maturing from that standpoint as well and also leveraging outside resources specifically for that awesome where can people uh follow you yeah i mean uh linkedin instagram yeah awesome yeah we'll put the link in the comments you want to see me just floating around in the sea or you want to hear what i have to say about you know the next stages of e-commerce and retail yeah awesome i've uh thanks a lot for uh your time and uh and all the the knowledge you shared same to you really appreciate it you too