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Scaling Up [S2.E2]: “One team, One Score, One North Star” – Jonathan Corr, Ellie Mae CEO

Learn about the multi-decade evolution of Ellie Mae. In this episode, Jonathan shares a veteran CEO's perspective on leading an enduring technology company.

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Ed (02:57): Welcome to Scaling Up longtime CEO of Ellie Mae, which as I said in the introduction, is the leading software to the mortgage industry. Love to get straight into this. When you started here, you came in as the CEO o under a very big personality, but a, a big teddy bear of Sig Anderman. I’d love just initially to give some relationship insight and also your transition into your role as CEO Sig obviously stayed on the board Yeah. And how that transition was managed.

Jonathan (04:09): It’s great to be here talking with you, Ed. And actually, I, I’ll correct you on that. I actually started as the Chief Strategy Officer. But I’ve been here almost 18 years now, so the company was a, a bit different way back 18 years ago. But I’d say that the North Star where we were going automating everythin, automatable was the same then as it’s been all the way through the years. And so I joined as the product guy to, to help the team and Sig. The concept of entrepreneur deliver on the vision around that and initially, obviously, it was a compass geared towards that premise and what, we can talk a little bit about that transition at some point. And so over the years going from the Chief Strategy Officer to COO and COO and president and then ultimately CEO about five years ago, a lot of folks asked what’s going to change when you become CEO?

And the fact is very little changed. it was fundamentally just a different guy with the title in many ways because the growing of the company, what we created, Sig and I were partners together. I was the product, the technology guy, kind of the balance he was the entrepreneur kind of thinking about all these different ideas for quite a while. And over time we just became this great team working together. So by the time we got to a place where it was time for him to pass the baton of, CEO to me, I kind of already been operating that role probably for three or four years as president. And then taking on the title and the seat was just a natural transition. It wasn’t like it was something that he wanted to keep doing it he stepped to the chairman role and the strategy that we had, how we were operating the nice thing there was these were things that we had actually created together over the years. I give Sig a tremendous amount of credit to be able to step back and lay his hands off and let me do what I needed to do. Because you can imagine as an entrepreneur that’s tough to do. So, I do think the transition that we managed over that period of time went off incredibly smoothly and he continued to stay on is as exec chair and my mentor. And it was a great partnership.

Ed (06:40): I’m interested in the culture that’s been created initially by Sig and really been carried on by you because as investors you do a, a lot of customer calls. You talk to past employees, customers love this business. No one will say a bad word about it. You can hardly find a former employee. But when you do, they all love their time here. Everyone raves about working here. What has been the magic dust that you’ve been able to sprinkle on the culture of this business?

Jonathan (07:11): I think it’s staying true to two kind of pillars, if you will. And I, and I think this is what brings people together knowing that they have a common vision or North Star. So as I said, the North star of automating everything, automatable in the industry has been a constant all the way through. How we’ve gotten there has obviously changed. Just as you’re sailing a ship towards a North star, you’ve got currents and winds and all kinds of different challenges that we faced as a company over 20 years. But that alignment for the organization is really a very helpful in some ways this invisible hand to keep things going. The other side is the culture of the company and the culture in many ways just started with, with Sig pretty quickly as he surrounded himself with people folks that, that shared a common viewpoint.

And then the culture really became the people here. And so it’s always been in many ways we talk about high tech company with old fashioned values, but it’s been about being focused on our customers, building great products, great services and really thinking about the relationship with our customers as a partnership, as a relationship. And so knowing that that is the case how do you make sure that you are open and honest and transparent and are listening and responsive and make the customers feel that way, Right? And you later on top of that, the only way you can do that as a software, a technology company is you’ve got to have people doing it. , you have very little in terms of physical assets, it’s all about the people. It’s about the teammates. And so doing the same thing, which is how do we create an environment where they feel the employees feel supported, they feel like they can speak up that they can be open, that they can challenge each other in respectful ways that, that the supporting them to do what they need to do.

And those two pieces kind of create this dynamic where you end up with a bunch of folks that really care about customers each other, and they care about their community, right? They, they actually are caring people. And so a big part of who Ellie Mae is, has been from very early giving back and , kind of paying it forward and sharing our good fortune with, with our communities around us and people that aren’t don’t have the same privileges. And you create an environment like that and really people love working here. We’ve had people that have worked here for 15 plus years, 20 years from the very beginning. And , when you ask people why they’re still here or why they come, they say it’s because what they’ve heard of the culture. So it isn’t kind of a magic formula. It’s kind of a just kind of best intention and doing the right thing and what comes out of that. And that’s kind of been what it’s all been about.

Ed (10:15): Lot of technology companies see a natural friction point at a hundred people and then maybe 500 people. , you talk about this culture. Have you thought about scaling it as the business has grown, it’s now a very big business. And so not only have you had to scale the people at the frontline Yeah. But naturally your executive team have certain ceilings. And I know there has been some executive reboot over the years. Have you thought about that sort of coaching mentality as a CEO versus the person that rips the bandaid off knowing that someone may have reached their ceiling?

Jonathan (10:51): I think it’s a great question. And for a long time we were probably in the 150 to 200 employee range. Kind of, we were just under that when we took the company public in 2011. And quickly we went on a, a trajectory of, of growth. And as we sit today we’re we over 1700 people. And what we recognized early on was it was about culture and maintaining that. And so as we thought about that, we wanted to bring, obviously bring in all kinds of new people and, and new thoughts, but at the same time, make sure those, those values and that foundation carried itself forward. So we really instituted probably right around 200 people this idea of employee onboarding, where every single employee, whether they’re here at this location, we bring them on remotely.

Any acquisitions we do comes through a multi-day orientation or onboarding as we call it at Ellie Mae and I speak to him, Sig used to speak to him, Joe Terrell, many of the other leaders telling them the vision, the North Star, the culture, the values what we expect of them, what they can expect from us, helping them understand this business. Because a lot of people don’t come from necessarily the mortgage industry. I didn’t initially. And so that has been really this kind of foundation that everybody goes through and it, it kind of gets people on the common playing field. The other thing that, that I’ve instituted probably over the last four or five years is this whole concept of we’ve done quarterly meetings since the very beginning. I think we’ve done, I don’t know, some crazy number, like 80 something quarterly meetings.

But as we were scaling, because when you’re at 200 people you can pretty much know everybody. And I felt like I did. And as we grew, I still knew people. But we wanted to maintain that, that two way communication. So we introduce this whole idea of the virtual town hall, which we do every single month. And I’ll speak either from my office or from another location we have in the building, and we’ll bring in all kinds of, of guests. It’s almost like being on like the news desk of Sad Night Live. And , we share, we keep it entertaining, but the whole idea is to have that continuous communication of what’s going on and let people ask questions. We do this , ask Jonathan every time. So there’s a lot of things we do like that. So just maintain that, that culture element of it.

I’m also a very big fan of this whole idea of organizational health. Patrick Lindsay writes a lot about it in his various books, but he wrote this, this book called The Advantage and the whole idea of how do you establish the organization where trust is a foundation and then you build on that all the way where you we talk about one team, one score, one star, that North Star where everybody’s coming together as one team and one score to make the customer successful. And so it’s very important to me that as we evolve, as we bring on leaders, we try to make sure that they, they fit into that mold. Sometimes we discover that they don’t. And the worst thing that can happen in an organization is when leadership is not aligned as one horizontal team.

Right? You kind of, it’s almost like if the parents are arguing, it kind of carries down to, to the, to the kids and the troops. And so I, I’ve been very conscious of creating an organization where there is this healthy dynamic between the leadership. And I think we’ve actually gotten to that place in a, in a really good way today. But we’ve definitely had to make changes along the way. And you got to make them quickly. You got to, as the CEO, if you see you’ve made a mistake, you got to set the example. You made that mistake, make that change. And people respect that. So I think that that’s really important.

Ed (14:59): There’s no doubt that people respect a leader that can make decisive action and put up their hand and say, that one’s on me, stuffed it up. I do later want to talk about the public markets a little bit. But in relation to the culture of this business and the public markets, you were a public company CEO for a long time, quarterly reporting over here in the US a lot of investors have this short-term quarter to quarter mindset. Yeah. And yet, aside from the beautiful software that, that you are selling, that is just such a, a phenomenal product, the greatest source of your long-term competitive advantage is, is probably the people within the organization. So how did you marry up this investor short-termism with knowing that at, at the end of the day, it was often the people that were going to make the difference in, in the long term. Is there a way CEOs can better communicate that?

Jonathan (15:50): It is about communication and , definitely as a public company what’s nice about that, what I really enjoyed about that right, was the ability to go out and tell the story and meet with lots of folks and hear their perspectives, hear their questions. , it was very rewarding, obviously the things you have to deal with, the opportunity or the challenge. However, this is the quarterly dynamic and , the focus on the quarterly results and I think you can do a fair amount of managing that with with investors. Ellie Mae was in a little bit different position in that we weren’t a pure SAS company. , we were this I think what I’d used to say is the best of both worlds kind of a, a SAS company with a transactional component.

So it was kind of a, a call option on, on industry volume, which was quite a few of our investors, like your yourselves at TDM really understood that they understood what we had created in terms of a culture, in terms of a footprint and an ecosystem and a network effect and incredible stickiness and really quite horizon to keep doing that. A lot of investors didn’t get that complete picture. They kind of looked at us as, Well, this is a SAS company that makes money. Your growth is about this level, but if you’re a growth company, your growth should be over this level. But how do we think about this combination of things? Right? One of the things I always used to kind of scratch my head at as the CEO, because I always think about business as the value of a business is the cash stream, the dividend you create over time, right?

The value for your shareholders. And if we’d miss by a, by a penny or two on, on growth on revenue, but beat by 10 cents on profit, a lot of the market didn’t like that. Yeah. And that was always very counterintuitive. So again, it was telling the story and helping people understand it. And we were in a bit of a, I think a challenging position and it, it, it obviously led to what we had to do ultimately in making the decision to go from public to private. Because as a public company I had some, some, some different folks that worked for me and I had interim CFO while we were in the transition. And she said, well, why don’t we just tell the market we’re going to do this. And I said, well if it was our company, right, we can make any decision we want.

But as a public company CEO and CFO, you, you have to understand that that’s a huge Im amount of constituency and you have an obligation there and the board has an obligation there. I wish it was as easy as that. And sometimes the public markets are not really thinking, at least some public investors are not really thinking about the long term. They’re thinking about the trading and the trading ability and something in a short term where then you’ve got a great set of investors that really align with the long-term story. And when you have conversations with them like I used to have with some of the folks on your team Tom in particular and say this is what we’re thinking about. This is how we’re going to do it. It was like, yeah, absolutely. We’re long-term investors. We see that. unfortunately, you got to balance that. You don’t have that completely as a public company CEO.

Ed (19:15): One of the other major scaling pain points and , it might turn you a bit white in the face even talking about this, but there was a full technology stack re-platform Yeah. Where the platform went down and when, when you have a 35% market share. Yeah. That is big news. So yeah, you had to re-platform at significant cost while being a public company while trying to service your customers. And you could almost describe it as swapping out the engine of a jet plane while you’re flying at 10,000 feet. So I’m curious as to how you thought about this and how you actively manage this and came through the other side as you have done.

Jonathan (19:53): That’s a great, great analogy. , changing the engine in a flying plane we, we’ve used that term. So I like that. It’s an interesting dynamic because, we knew, I mean the platform that we were on was foundationally the same thing. We used to create the on-premise seed of the solution back in 2003 and four, and obviously had incredible success with it, transitioned it to a software as a service in the cloud, multi-tenancy, but still architecturally more of a monolith than a bunch of microservices. And it’s not that we, we reacted, we, we kind of knew we wanted to do this all along, but it was, we didn’t get to a position where we thought we could manage the market till, when we started down this path.

Now the other kind of interesting dynamic for us is there are things that happen in this market that we don’t know are going to happen. , regulatory change all the things that came out of the Consumer Financial Protection Bureau and all those things are not always telegraphed. We usually don’t know about ’til about a couple years ahead of time. So every time we were going down a path to get there quicker, some of those things would come into play. We also made a very conscious decision, and this was more of a, I think a kind of a business decision based on what we’d seen previously, which is we wanted to make sure that as we transitioned the platform, it wasn’t a, I go from one platform to the other, let’s call it, think about it, rip and replace type of concept, which is obviously very prevalent in the on-premise model.

But, even in the SAS model, if you, if you massively change the experience for folks, how do you manage that? And then not introduce an opportunity for them to think about, is it time to switch? Mm. So we wanted to make it the least disruptive as possible, kind of like a changing everything behind the, behind the scenes. But doing that obviously takes even more time and discipline and thought through architecture. And it obviously puts more pressure on multiple costs at the same time. And I think we did a really good job of that with the public market in setting that expectation. So I think we did that well. But, it’s definitely not for the fainter heart

Ed (22:23): You listed as a very small visit. I think you only had maybe 60 million of revenue in 2011. So a small listing. And at the time you were, as you say, an on-premise license and maintenance business. And so in your life as a public company, you had to completely change the model to SASS as, as you mentioned. How did you think about that transition? Well,

Jonathan (23:03): We were actually somewhat fortunate in that we were small enough and we had made a portion of the transition. So if we look back when we were, we went public in, in April, 2011, we were probably 15, 20% SAS already, right? So it was a small percentage. But the thing that many companies go through is the blip where you’re going from zero to that first amount and you start transitioning from that, that revenue recognition of big licenses versus monthly ratable one. We had kind of done gotten through most of that and we were small enough that it, it wasn’t as apparent that it would be with a, a much bigger company that had a much bigger footprint of that. And so one of the things that worked out nicely there was having started it and then we were on a trajectory where basically all our new business was SaaS and we slowly but surely transitioned folks from the maintenance stream to the SAS model.

And the nice thing there was the way we structured the model, and people find this hard to believe, but we actually were getting a lot more on an annualized basis on the SAS model because we kind of took a little bit different viewpoint where our old license maintenance model was around one piece of our software. As we shifted to sas, we shifted to a model that we called success based pricing. And that allowed us to package a whole bunch of our other solutions into the same solution. It’s kind of like selling instead of continuing to just sell Microsoft Excel and Word, you sell office, and you package it all together. And so with that, you’re, you’re able to go with a value prop where you’re delivering a lot more values. You can take a lot more of the wallet share of the customer.

And so that was fortunate. I think we also got the benefit as we went through 2012 of the market volume picked up. We, we benefit from that because that’s part of the success based pricing model. And then we were well on our way. But it’s, again, it’s a it’s something that from my perspective, I think we did it at a certain pace. I probably would’ve done it faster if I could have in retrospect. But again, I think we were, we were fortunate that we had started down the path.

Ed (25:42): We’re talking about the public market volatility and dig into that a little bit in a second. But this sort of variability of the business model is, is so natural for Ellie Mae but it’s so heavily and sort of explicitly linked to mortgage volumes. Yeah. And there’s this mismatching with the quarterly earnings reporting. How did you think about this incongruous nature of the business model from a macro point of view?

Jonathan (26:06): It’s an interesting one because when we came up with success based pricing, which obviously added variability, we could have went down a model where everything was more tied to subscription. But what we kind of figured out before we went public was the way the industry operates, their success is based on doing more business for more consumers. And they think about the world in a variable basis. And so we were only having a certain level of success selling the SAS model when it was straight just seat. But when we then packaged things together and we aligned it with our customers their success being ours, it took off. And so what became evident independent of what would ultimately be the public market view, was if you were going to maximize revenue and profits, you were better off going down a success based pricing model than a pure SA model.

Because you could never get the same level of economics from customers because they wouldn’t be willing to pay that level of a, of a seat price. And obviously that contributed to our growth as we became a public company. , one of the things that we really try to help the market understand, especially early, was this really looks like a SAS company. , don’t, don’t worry about the volume. Think about the fundamental secular shift that’s going on. Us picking up share the market, moving digital, the market, moving from the way they were doing things, moving from paper to electronics. Yes, the industry moves around us, it’s variable just like other, other industries that have some cyclicality to them. But what’s going on with us is we’re growing so rapidly in the market, the market is shifting here. , just think about volume as an influencer but not really a driver.

And so, it could be a little bit of a headwind, it could be a little bit of a tailwind, but the fundamental growth of the business continues on independent of that. And we used to spend a lot of time showing the historical curve there and showing how volumes went up and down over time just to, to explain that because, the average investor, all they think about is our interest rates down. Which that doesn’t necessarily mean that the economy’s good if this interest rates are down. It may be that we’re in a, a market where there’s not a lot of jobs, there’s not a lot of this, there’s not a lot of people buying homes. So, there was a lot of education going on there. The other thing we tried to really do is to help people get to this idea of what we’d call base revenue, which was the subscription, this idea of fixed variable, which was <laugh> the idea that no matter what goes on, right, if the market is at a certain amount of volume, even though people pay transactionally, you could think of it like an annuity, right?

And then the last piece of it, kind of the last piece of the variable on the edge, that’s the true variable. And again, some investors really understood that others never made that complete connection. So again, when the market was going up, it was great when the market had any potential variability to, it had to a lot of education with the market and continually reinforce that. And it just kind of came with the landscape.

Ed (29:42): While we’re talking about variability of the public markets, just to cast your mind back to, I think November, 2013, there were a couple of quarters where there were, as you mentioned before, tiny little misses. And yet there were huge movements downwards in the stock price. , I think stock price probably at maybe $20. at the time there was some speculation that there were some private equity suitors sort of circling around the business. But in, in somewhat of a, a unique case, the board really took a long-term view on the business. They understood the value for the five, seven-year proposition. Yeah. At the time, maybe you can give some insight into how this played out, because often what happens is boards go into protection mode. Yeah. The threat of liability is hanging over their heads. They’re not necessarily doing what’s best for, for shareholders in the long term. And so you have this, this tension. Yeah.

Jonathan (30:40): And it was, it was kind of, we’d gone, I think the stock had been probably in the mid thirties and came down to 20 at that, that timeframe. And invariably, because we had this at that time it was a smaller businesses, but a, a great business that would had such momentum was solving such a big problem in the industry. there were many private equity firms that had been watching us at, at the size we were at. And when that price dropped down reached out and wanted to, to do something. And again, as a public board looking at where the stock was and looking at where the market might be in the following year, we felt we had like our fiscal obligation to consider that. Right. In terms of the fiduciary.

And again, I think we looked at it from a standpoint of what is the best thing, what is the long-term value here? And if we think about, if somebody comes to the table and they can pay enough of a premium and , you do the NPV on it and it’s, it, it has enough of a premium to take enough risk off the table, over a significant horizon we’d say we might have had to make a really tough decision. , what ended up happening is they, they just didn’t get to our, to our hurdle. And we said even though there’s a, a significant premium here, the best thing in terms of the shareholders as like, let’s call it the primary constituency. But we we’re obviously I am, especially as the CEO thinking about all the constituents customers, partners, employees, just didn’t make sense to do it. Now it’s interesting, the, the firm that all they had to do was probably get a couple hundred thousand more and they probably would’ve taken it and they would’ve made a, a killing, but they didn’t. And the story went forward and we continued to grow and execute and, but they were involved. A number of them were involved coming around back in, in 2019 as well.

Ed (32:44): I think it’s worth rounding out this story by saying that the share price over the next five years then went five x to a hundred dollars. There were plenty of public marketed investors that were very happy that Ellie Mae was not taken private in in 2013.

And then just to fast forward, I guess it’s worth contrasting that with your experience in early 2019, where Ellie again missed two quarters, only just stock price got hammered to $60, and Tom of Bravo came along and offered a nice premium, ended up buying the company for, for 3.7 billion if possible. I’d love to hear some transaction inside.

Jonathan (33:27): There’s actually a very entertaining proxy you can read as well. It’s like Mr Co goes to Washington and meets all these people. It was a similar dynamic, a little different I’d say the dynamic in 2013 was a dynamic that was very, I’d say more specific to our industry. So the broader things were probably still being positive. But the market hadn’t really engaged in the purchase side. And that was kind of, we were nervous about that. And so we went through the process and made the decision. And in 18 again, if you remember the broad housing market as we hit summer of 18, interest rates had soared probably about a hundred basis points. Home price appreciation. The US was way up.

Inventory was tight and what everybody thought was going to be a steady market really froze up. And to the point where, we were seeing it in our customers re-fi’s had dwindled down the purchase market. People were very anxious, they become frustrated in terms of buying homes and being in these bidding wars where you’d hear about a dozen people bidding and losing and it just, people had become frustrated. So they were settling back in. And so we, we kind of conveyed to the market right now we don’t think things are going to get likely better till next spring. And that was kind of the consensus of the market. That’s kind of what I was hearing, at the annual conference the Mortgage Bankers Association. And so that was kind of our, our horizon there.

That’s as a public company, we had to convey that message that was the appropriate thing. So that hit the stock. And then if you remember as we went into fall 18, the tech market in general got, got hit pretty hard. I mean obviously the lowest point of the Dow in recent history was the end of 18. , we’re starting to talk a little bit about that these days as well. And so the stock came down pretty, pretty significantly. And when once that happened all these private equity firms started sending me messages, Hey, we’d love to come talk to you. I said, “Well, we can talk.” Absolutely. We have to talk. And so there was a, a process where some of the top firms came out, reached us very quickly. It, it moved very quickly right after Thanksgiving.

And again, the dynamic was we definitely have a long term view of where this can go, but I’d say our viewpoint was likely things were not going to get better at that point based on what everybody knew until probably the second half of 19 at the earliest based on everything everybody was seeing. And so if we say, this is how the what’s going to happen with the business, what’ll happen in 20 will happen in 21. if you play it out what is the company worth for shareholders with that level of risk? And so is there somebody that is going to come to the table with a, a value for shareholders that makes it attractive? We were also worried because there were some activists starting to take positions and we were also concerned about some top tech players that had been watching us and might take this as an opportunity to come in and grab the company at a at a real discount.

And from that standpoint, my viewpoint was that would not be a great outcome for actually shareholders because it probably would not be as a, as a premium as these private equity guys, because the private equity guys saw the long term curve. So they were willing to really get aggressive. It wouldn’t be the best outcome for our customers or partners or our employees or us continuing on with the culture and the vision. , most software companies at that time that were interested, my expectation is that we’d probably come in and probably dismantle the company quite a bit. Yeah. And the attraction for me with private equity in particular Tommo Bravo, was I could get a great price for shareholders, but I also could continue to drive towards the North Star, keep maintaining the culture, keep delivering to our customers. And so to me it, it felt like a, a real win win win. We were, we were fortunate because again, as a public company, you can’t really just pick who you want, right? You got to make sure that the economics and the deal closing timeliness is in the best interest of shareholders versus other opportunities. And Thoma Bravo did that and they’ve been a great partner so far and

Ed (38:19): They have a fun track record in, in creating value. You touched on it in terms of how can you were to maintain the culture and everything since then has happened behind closed doors. Yeah. But I’m just sort of thinking out loud. There’s no doubt the way they operate, they usually gear the business up, let’s say seven to 10 times. They grow revenue dramatically, they rip costs out, which in software world is usually people <laugh>. So how have you thought about the importance of maintaining the culture while they have been owners of the business?

Jonathan (38:48): Yeah, so their, their viewpoint of the world is profitable growth, which in, in many ways is kind of was the way I used to think of the world, even as a public company, because we were being pushed as a public company in some ways to growth at any cost, right? You’d, you’d really try to push your growth just to satisfy that side of the public market. And all growth is not equal, right? doing extra this or extra that the margins that aren’t there, not necessarily on the bottom line, the smartest thing, but that’s what the public market might want. Thoma Bravo definitely comes at it with this idea of you don’t need to grow at this level. You can grow low double digits, combine that with smart growth. And that’s the kind of business that we, we think you can, can optimize as right, when we laid out our public plan during a couple of investor days in the past we laid out a plan to get towards a billion of revenue.

We laid out a plan to get to 40% plus EBITDA to get to very high cash flows. So we were on that trajectory. We saw that leverage we were going to take a little bit longer to get there because in many ways we weren’t going to be rewarded by the public market if we didn’t continue on a certain level of, of growth in the short term with, with Tom Bravo, we can actually do things a little quicker and we can do a lot of things quicker, like infrastructure investment and some of the things that we’re getting hard to do quarterly because worrying about if you don’t do it right and you have an issue on your quarterly report you create all kinds of problems for yourselves here in terms of scaling the infrastructure. We can do that.

And they, they’re fine with that and we can don’t have to worry about it. There’s no question. we had to make some adjustments in employees. But the inverse of that is that when you’re growing very rapidly and trying to just keep pushing growth, sometimes you don’t hire every single teammate that perfectly fits in. You don’t you, you’re not as disciplined about that. And so we definitely had some opportunity there. And so yet it’s painful to make any adjustments in the organization. and it’s painful not only for the folks you have to do it for, but more importantly the teammates that are still here and you want to do it with, with caring and sensitivity. And it obviously created a, a set of change, right? And having to manage through that change. Now, the nice thing that happened in 19 was we were expecting the headwind of the industry.

The headwind became a tailwind. So that was positive. And so the thing that we had to deal with which always deal with different challenges and opportunities in a business was helping people get through this transition. And probably one of the biggest things is making sure that the employees and the teammates know that this is Ellie Mae. Thoma Bravo is just an investor. We had venture capital investors in the past, we had public investors just previously, and many, many of them. And these guys are, are a private investor, right? And all those scenarios, two things always stayed constant. The North Star and the culture and us running the business. So nothing really changes with this. Now the fact is they read stories about other private equity firms that do this and that and the other thing.

And so, the dynamic is you can’t just tell them, trust me, you can’t just tell them nothing’s going to change. You can say that, but you just got to keep communicating and reinforcing and answering questions and just showing them along the way. And we got through 19 and it’s very interesting because I’d say that incredible performance by the business and the company obviously some, some friction and bumps as we made changes. But I’d say the leadership and the organization is probably the strongest and most aligned that it has been in the five years since I’ve been CEO. So even though as we ended 18, we probably had a little bit of normal disconnectedness as we went through this, and we had to make some changes forcing people to really think about this idea of one team and one score really brought folks together. And there’s always opportunities to continue doing that. It’s, it is never we’re done, but I’d say as we enter 20, we are probably the strongest we’ve ever been at that level.

Ed (43:28): One last theme I’d, I’d love to discuss very quickly, because you’ve been so generous with your time is, is just on you 18 years here, five years as CEO, but a high powered executive. I know you are deep into your family life, you love golf and obviously the Ellie Mae sponsor, the Ellie Mae Classic on the web.com tour. If you ever need someone to Cady, just look me up. But I, I’m curious as to your own high-performance routines and what keeps you at the top of your game?

Jonathan (43:58): I do have an incredible family. Wife of 27 years, three great kids. One of the things I think you always have to do as any leader is managing that balance, that balance that is both being in the business, but the physical health, the mental health, because obviously you deal with a lot of the stresses, you internalize a lot of them, them because you want to convey a level of calm to the organization, but , obviously you’re not unfeeling you just, you’re feeling it inside because you have to the littlest things you do as a CEO, and this is what I’ve learned over the last few years, eye movements, how you walk, how you respond are interpreted in ways you wouldn’t even imagine.

And so to, to make sure you have that balance and family is the most important thing, right? And that’s what we say here at Ellie Mae as well. So we want people to make sure that they do what’s needed to, to balance that. And it’s not a pure balance, right? Sometimes you can’t balance, but you don’t miss those things, those family things with your with your kids and your significant others. So that’s really important to me. I mean, I work out a lot. I try to play golf. I never play enough as most people who play golf never is say that. I have a piano in my office at home. I kind of screw around with that a little bit and try to set a great example for the family.

And I love musicals actually. So I’m really into theater and musicals and my daughters are as well. So that’s something we’re connected on. And I feel very fortunate and I’ve been here for 18 years and I never thought I’d be anywhere in the tech business for 18 years. But it’s been an incredible journey and we still have a lot ahead of us. It’s been incredibly fun challenging through all kinds of different changes over the years, but it’s incredibly rewarding. And probably the biggest thing is the folks here, right? the teammates, the culture, just, it’s a great place.

Ed (4:): Jonathan, I’ve loved every minute talking to you. Thank you so much for your time.

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