A billion-dollar investment from a PE company puts the heat on Raleigh software CEO Jim Triandiflou.
When Jim Triandiflou joined Relias Learning as CEO in 2012, the Cary-based online training company had about 110 employees. When he left in late 2019, it had 775 staffers and was owned by German communications giant Bertelsmann.
That success made the New York native a top prospect for private-equity companies seeking leaders. The father of four didn’t want to leave North Carolina, where the family moved in 2009. He jumped back into the game last October at Raleigh-based insightsoftware. The company had grown rapidly since 2018 when private-equity groups TA Associates and ST6 merged two smaller software companies with revenue of about $35 million. Former CEO Michael Lipps oversaw more than a dozen acquisitions in less than three years involving software used by corporate financial officers. Revenue now tops $350 million.
Triandiflou says he was hired to help grow the company’s disparate businesses in a coordinated way. In July, German PE company HG spent $1 billion to acquire a 40% stake in insightsoftware. The move followed HG’s August acquisition of Visma, a Norwegian enterprise-resource software company. The deal valued Visma at $12 billion and marked the biggest European software transaction in history.
In this interview, Triandiflou discusses his career and passion for family, sports and Special Olympics North Carolina, where he was a board chair. It is edited for clarity and brevity.
▲ Jim Triandiflou, second from left, is a past chair of Special Olympics North Carolina. He is joined by the group’s president, Keith Fishburne; athlete and leadership manager Kristine Hughes,; and executives Juliana Pratt and Kathy Langfield.
How does HG’s investment benefit the company?
HG came in and purchased some stock from existing investors. So we don’t have another $1 billion in our bank account. But it does give us another deep-pocketed investor at the table. We had two other private-equity groups — TA of Boston and Genstar of San Francisco. We do a lot of acquisitions and we make big investments. This gives us another deep-pocketed investor to support us.
HG has been in the office-of-the-CFO space for 15 years and they own one of Europe’s largest [enterprise resource planning] companies. They know our market. It’s not just the money they bring.
Both TA and HG have ownership in the low 40% range. They will share control and have an equal amount of power from a governance perspective.
Is your $1 billion annual revenue target realistic?
There’s no reason we shouldn’t be able to do that. This year we are pushing $400 million and we are looking at acquisitions that would put us well above that. We started 2018 with under $100 million in revenue. Three years later, we are four or five times larger. So if in three years from now we are three times larger, we should reach that goal. The market size is big enough.
How long have you worked for private-equity-owned companies?
I started in 1999 by quitting my job in consulting, where I was making a very good living, to start a company where I had zero salary. The company raised venture capital. So for 21 years I’ve worked for venture-backed or PE-backed companies.
Tell us about your career path.
I started on Long Island, the very end of Long Island. My mom and dad were school teachers. When I was 15 my parents got divorced and I moved to Buffalo, where I went to high school. I went to [State University of New York] Oswego, which I loved. Then I moved to New York City and started my career in advertising.
After two years in New York, I moved to Arizona to go to business school. To say we came from humble beginnings would be an understatement. I’d never left New York and I was very naive. I just wanted to do something different.
You could say I was not a model student at [Arizona State University]. I could have done better but I was always the captain of the teams. I enjoyed the extracurriculars more than the academics.
Why did you start in consulting?
After graduating I had an opportunity at AT&T where I had interned the summer before, and I had a job offer at a 30-person consulting firm that focused on sales and marketing. I just really loved the people there so I joined as a consultant. I didn’t know what I was doing and I couldn’t believe people paid for me to help out.
But in consulting you work with so many companies that if you just pay attention, you really will learn. We worked with Microsoft, Oracle, IBM — the biggest tech and telecom companies. I traveled all over the world with that company, which was amazing. I later ran our Atlanta office. It was a life-changing experience, I was just really lucky.
What was the key to Alexander Group’s success?
Our No. 1 product was designing sales compensation plans. IBM had 15,000 sales people and we designed their pay plans. I always said that if you schedule a meeting on how you are going to pay people, everyone shows up. People don’t blow that meeting off.
When IBM bought Lotus, it was a big multiyear project and we helped integrate Lotus. [Consulting giant] McKinsey would come in and do a big strategic project. Then we would come in and figure out how to actually get it done from a sales and marketing perspective. We also did big product launches. It gave me great exposure to software and tech, which I didn’t know much about. That’s how I got into software.
When did you leave the consulting company?
In 1999 I started [Ockham Technologies] in Atlanta and in 2002 we sold it to a company in Boston. We moved to Boston for seven years. Then we decided we wanted to raise our kids in North Carolina. The company in Boston was sold to another company and eventually went public. So it was a good, natural time to change. We had four kids in five-and-a-half years. We had a lot of diapers in the house. We moved here 12 years ago.
What did Relias look like when you joined in 2012?
Two $10 million companies had been acquired and merged to form Relias. There were about 110 people and only 15 in Cary. We were in the MacGregor Village area, which is mostly retail. We were about the only business with an office there. We were upstairs and there was a pizza place below us that would always have gas leaks and the fire department would come. When I arrived the first day I brought my computer and asked the president if there was an IT guy to help set it up. He said, “No, I’ll do that.” It was really fun.
What sparked Relias’ growth?
Just think of online education. That’s a growth market. Health care is a growth market. It’s a big part of the success. It’s the same with insightsoftware; it’s picking the right market. That is a lot of what the private-equity guys do. They buy a business in a certain industry that is ripe for growth and then management comes in and we try to execute that plan. So it’s partly following the megatrends.
Bertelsmann bought Relias for $540 million in 2014. How did that work out?
It was fabulous. I had a great boss. The guy who is CEO now is still a friend of mine. Our girls hang out together. I talk to him regularly. The Germans are very precise but that fits my personality. I’m a detail person. He would say to me, “you are more German than the Germans. Don’t be so Germanic.”
But it worked out well. They did everything they said they were going to do. I think we did the same.
What was your plan when you left Relias?
I didn’t know if I was just going to serve on boards. I knew that my twins had their senior year in high school coming. I was going to take these last 18 months before they leave. I was going to take it off and relax. That was my plan. But then COVID hit. When I said I was gonna leave, I didn’t know COVID was coming. I’ve been so lucky I had such great timing. Running a company during COVID would have been so stressful. I didn’t have a plan.
[Mark Friedman,] the chairman of insightsoftware, and I were friends. He called me to see if I was interested in a company. I looked at it and said no. Then a month or two later, he called me and asked me about Insight. It was in Raleigh. That’s how it worked out.
When you left Relias, did you expect to become a CEO again?
When you have a success with PE, you get a lot of calls. It was a flattering time. You ask yourself, what do I want to do with the rest of my life? I love working with people. That’s what I enjoy. When you are on the board, you work with very few people. When you are running the company, the key is building the team and making it cohesive. That is my favorite part.
Do you consider yourself an M&A guy?
My forte is organic growth. I am a growth person. I grew up in marketing. I worked a bunch of my career as a project manager helping deliver projects. The reason I was brought in was to get organic growth.
Prior to this year, the company never grew more than 2% organically. All the growth came from acquisitions. During the last quarter we grew 11% organically. This year we are on track to grow double digits organically. If we didn’t do any acquisitions, we’d still grow 10%. That’s more of my forte.
[Joe Healey), who I brought in to lead sales, is world class. [Stacey West], who runs marketing, came here from my last company. She is awesome. Developing that marketing engine has been my No. 1 focus and we’re really proud. This has happened faster than we thought.
Have you typically retained management of acquired companies?
We’ve done 18 acquisitions. Sometimes you are buying a direct competitor so you wind up with two of everything, like Noah’s Ark. You obviously don’t need two of everything and we will transition some people out.
There are other times when we are buying something new that we don’t have. As an example, we bought [Roseville, Calif.-based] Certent at the end of last year. Their CEO now runs a business unit for us. He is doing an awesome job. It really does vary.
What is the company’s growth strategy?
To run a finance operation, there are probably 20 or 30 different pieces of software. You have to do payroll, reimburse expenses, you have to have a budget and financial reporting. You have to bill your customers. We are in nine areas today. Our M&A team is looking for companies at any place in the world to fill out our product line. There are some things we will never do like we’re not going to be a payroll system. We’re not going to do expense management.
In the middle of all of this is the [enterprise software plan]. That is the center. But the finance office uses up to 20 or 30 different pieces of software. We are in nine [areas] and we’d like to get to 15. We want to keep our M&A team busy.
Why is the M&A market so hot?
The economy is strong despite COVID and there is more money going toward the private-equity and venture asset class than ever in history. Think of what you are going to do with your money. Put it in a savings account and that doesn’t get much. You can do stocks or bonds. But institutional investors have to figure out what to do too and they can’t put it in savings accounts. So there is more and more money that has gone into this asset class called private placements. There is so much money, they are sort of bidding up each other. Things are getting more expensive.
On one hand, we are glad they are expensive because HG paid a big price for us. On the other hand, we are out buying companies and we’ve got to pay the expensive price.
Do you see a valuation bubble?
If I knew I’d be a stock market prognosticator. Right now the market is really strong. The economy is strong. Our sales are record sales. It’s hard to see a downturn in the short term. But whenever someone says that, that’s when it might happen.
What is your strategy on motivating staff?
There’s a book by Patrick Lencioni called The Advantage which I got exposed to in 2012. It really changed my life and how I think about things and having a better understanding about the importance of trust and being vulnerable and having healthy debate. These principles changed my life and certainly how I run a company. I used to think that was all touchy-feely BS but that’s the key to getting a team to come together. Any relationship at all, if you don’t have trust, you don’t have a healthy relationship. That was true at Relias and it’s true at Insight.
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Is compensation the key?
It is a top-three consideration. Everyone needs to make money. But the most important thing is you want to work with people who you like and respect. That sounds a little cliched and pollyannaish but once you’ve worked around a bit you realize this is true. Anyone in our company or your company, you can go and get a job for $10,000 more. It’s not hard to get a 10% raise. But there’s more to it. It’s important, people need to make a living. But most people wouldn’t do that to go work for a job they hated or work for a jerk boss.
You want to work for a company that’s honest, ethical, growing.
Why is the Special Olympics important to you?
It started because while at Relias, we trained people who had intellectual disabilities. Then I got to know the organization. I love all sports. I’ll watch anything on TV. And it’s like a lot of things in life, you think you are volunteering and giving but you are getting so much more. If you want to see pure joy and pure happiness, you go around people with intellectual disabilities and see their attitudes, the joy they have and the love they give.■