Chris Cabrera On Building A $2 Billion Business By Helping Companies Unlock Their Full Revenue Potential

In the heart of Silicon Valley, amidst the tech boom of the ’80s, Chris Cabrera’s journey unfolded. Born in Boston to a first-generation Colombian father, Chris moved to California with his family, eventually finding his way into the vibrant entrepreneurial landscape.

Chris’ venture, Xactly, has attracted funding from top-tier investors like Vista Equity Partners, Salesforce Ventures, Polaris Partners, and Bridgescale.

In this episode, you will learn:

• Chris Cabrera’s decision to wait for the right time and circumstances before starting Xactly showcases the importance of patience in entrepreneurial journeys.
• The shift from public to private hands with Vista Equity Partners emphasized the significance of balancing growth and profitability for long-term success.
• Successful acquisitions hinge on retaining key personnel, leadership continuity, and cultural alignment to ensure a smooth integration process.
• In his book, Chris advocates for a shift away from the growth-at-all-costs mentality, urging entrepreneurs to focus on building sustainable businesses rather than chasing unicorn valuations.
• Chris’s nearly two-decade tenure as Xactly’s CEO and his distinction as one of the longest-tenured SaaS CEOs highlight the value of dedication and continuity in leadership.
• Stepping down as CEO reflects Chris’s desire to explore new horizons, emphasizing the importance of diversifying one’s experiences and skills throughout a career.
• The intertwining of family values within the company, with Chris’s children working at Xactly, highlights the importance of a familial and supportive culture in fostering success.

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About Chris Cabrera:

Christopher W. Cabrera, founder, and CEO of Xactly Corporation, is a noted industry expert in issues relating to sales performance management, sales compensation, and enterprise and on-demand/software-as-a-service delivery models.

Chris was named the 2011 “Alumni Entrepreneur of the Year” by the Lloyd Greif Center for Entrepreneurial Studies at the USC Marshall School of Business.

Chris is the author of Game the Plan (River Grove Books, 2014) and co-author of Xactly Sales Compensation for Dummies (Wiley Publishing, 2006).

Connect with Chris Cabrera:

• TheOrg
• LinkedIn
• Crunchbase
• RocketReach

Read the Full Transcription of the Interview:

Alejandro Cremades: Alrighty hello everyone and welcome to the dealmakerr show. So today. We’re we’re we’re having an amazing founder. You know we’re going to be talking about the building scaling. You know, financing all of that good stuff. You know we’re also going to be talking about going public also doing transactions with private equity firms. And you know, incredible. You know the company that this founder has built you know the peak 2000000000 valuation plus and again you know also an author you know there is some interesting conversations that we’re going to be talking about there on building a sustainable business versus you know the craziness you know that we’ve encountered. In the past years you know our own unicorns that I think you know has say really come to bite everyone you know with this macro environment. Ah but day. But again you know brace yourself for a very inspiring conversation. So without fartherdo. Let’s our guest today Chris Cabarera welcome to the show.

Chris Cabrera: Thank you Alejandra great to be here.

Alejandro Cremades: So originally born in Boston but I know that the California you know took your heart you know early on so give us a walk through memory lane. How was life growing up.

Chris Cabrera: Ah, life was great. One of 5 kids born from a first generation colombian father and he you know brought the family out to California back in the late 70 s and I went to high school out in Northern California and so I don’t consider myself a native but I’ve you know, certainly been in California a long time.

Alejandro Cremades: So then so then tell us you know how do you get into this business and an entrepreneurial thing because that’s ultimately why you went to study you know it sounds like you know you wanted to do something you know your own you know, eventually So what got you into that direction.

Chris Cabrera: And yeah I mean like I say I grew up my father was you know an immigrant and you know was always being an entrepreneur but I watched him and worked for him for years and years but I watched him toil and do things very much bootstrapped and things like that and so. I wanted to go get a formal business education and and and yeah growing up in the silicon valley literally you know in the middle of you know I I graduated high school in 84 you know when Apple was you know, kind of peakeing and all that stuff not peaking. But I mean you know the computers were just like beginning to take off. So it’s a kind of a crazy time and so anyway I went to school down in Southern California at usc I went through a special program they had called the entrepreneur program and I just I really I knew I wanted to start a company I didn’t know what yet and I wasn’t you know, necessarily eager to go do it I just wanted to have that background and so you know one of the things that i. What I and happy about when I look back on my career is that I sort of waited till the right time to start a company and at that point that educational background that I had really paid off whereas a lot of people try to force it. You know they come out. They get a degree in entrepreneurism or something and then they immediately go try to start a company just so they can be an entrepreneur and I think that is often ends badly as opposed to waiting for the right time the right circumstances the right company things like that.

Alejandro Cremades: Well I mean in your case, you were also very lucky because you were able to see you know how some of those organizations really work. But most importantly to develop some of the I would say the most essential skills of being a founder which is. Really embracing sales business development and really understanding how to get people to buy your product and to also build something that people want to use so what would you say that you know were your biggest takeaways you know during the early days of um after university when you know you were working. Ah, companies like sdi or Cali the software I mean what? what were some of those takeaways.

Chris Cabrera: Well I think you know in many cases I you know at those companies they you know had great experiences there but in many cases and they were many different leaders throughout those years but in a lot of ways I learned what not to do in some cases and and in some cases I learned to emulate. Those leaders and the things that I thought that they were really great at and 1 thing you know and I combined that I think with my experience is watching my dad with his businesses and I think what it did is ah it allowed me to sort of formulate this this. Ah you know style I guess of running a company which was very very focused on the people. And the culture. Ah and the products but really frankly more so on the company itself and the culture and the people I always kind of felt like we could build anything I mean the product is just a moment in time. That’s what we’re sell today. That’s what we’re doing today but the people in the culture is is is. Is that lasting thing right? And so I think that has served me well also and I learned a lot of those lessons by watching these other leaders and including my dad.

Alejandro Cremades: So while you were at Calidu Software you know is it a company that it ended up going Public. You literally pay went there when he was doing zero in revenue and you were running sales and business development Eventually, you know you got your calling. You’re calling for what they would end up being your time your time to shine your time to really take the ah the leap of faith to start exactly so so walk us to what were the sequence of events that needed to happen for you to really feel that you were ready because I mean at this point you were for. You know over a decade now you know working for other companies. I mean what? what made you feel that it was your time your time to go at it.

Chris Cabrera: Well, ah, andro. It’s a great question and you know I wish I could say that I had this spark of lightning and just kind of you know went and did it um, the the reality is that it was sort of forced upon me in many ways I feel like I was a reluctant founder and what I mean by that is. I was at a company you mentioned calwardice we were selling on-premise software this is in the you know late 90 s early 2000. We used to sell you know Cds with software on it many people listening probably don’t even remember those days are not old enough but in those days you know that’s how you sold software and it was very very expensive. Install the companies had to have all this hardware and so because of all that expense it really precluded you from selling to the masses of course salesforce came along and they were one of the the first real pioneers in this saas world. And I was trying to get the cfo at salesforce to become a customer and buy my my on-premise software and he’s a a good friend a guy named Steve Capeb bread and after a six months sales cycle he said to me that he would never buy my product because it was the wrong religion and he said if you go start a company. Ah, that saas I’ll become your first customer even then I really did not want to go start a company and so rather I went back to the folks at callis the leadership team at the time and I tried to plea with them to create a Saas version.

Chris Cabrera: But again you have to remember this at this time it was now two thousand late 2004 Sas was not a big thing yet. There was only a few companies doing as salesforce being one of them and the cto and the leadership team at the time felt that Sas was a fad and so they said we’re not doing that. Was a 37 year old guy I was much more brash than I am today and so I pretty much swore them and told them they were idiots and um, you know, kind of made a big fuss and ultimately got fired and so at Chris Cabrera: tmas time in 2004 I found myself without a job. But because I had been a 16 b officer which is one of the top officers of a public company. They paid me a bunch of money like they paid me like a year’s salary to just quietly go away. So I remember sitting there at Chris Cabrera: tmas in O4 going well I don’t really need a paycheck for a while I’m very passionate about this space. I’ve got the cfo at salesforce saying you know if you build it I’ll be your first customer so it really wasn’t that ah probably anybody on the phone given those same set of circumstances probably would have done the same thing which was to go start a company. And so that’s kind of how I got into it sorry for the long story. But I mean that that it is kind of an important part of it.

Alejandro Cremades: Ah, why exactly you know out of all companies that you you could have started I mean why why exactly ended up being exactly.

Chris Cabrera: Um, well because it was passionate about the space I had I had built. You know, largely me and my teams had taken this callalous company from 0 to 100000000 and took it public and I really liked what we were doing and and because we could only sell to those very very big companies that could afford. Multiple hundreds of thousands of dollars or millions of dollars I was really passionate about servicing the rest of the the landscape and I remember Beny off at the time one of his big things was all about democratization of software. And that really resonated with me because but what he meant by that was you can sell it to everybody right? It’s not just for the rich and big. You know huge companies. It’s for every size company and so anyway I I think I was very convinced that that was the space I wanted to be in and I was very very convinced that the future was saas. Because in a saas model you know companies could effectively rent the software instead of having to buy it and so I could do deals that were yeah thousands or tens of thousands dollars you know kind of a month versus millions of dollars and so imagine how many more companies I could sell to and that. Of course is exactly how it played out. but um but that was why

Alejandro Cremades: To what what ended up being the business model of Shockley for the people listening to get it.

Chris Cabrera: Um, so the business model. First of all what exactly did and in it at its core in the beginning was we automated compensation. So just any company that has any kind of sales team whatsoever. They’re paying them commission. It’s always done in excel or spreadsheets. It’s very error error ah written. And the reps don’t understand how they’re getting paid and so our premise was if you you know, pay people accurately and you dangle that carrot in front of their face using their phones and and you know much more real-time even before they close a deal. You’re going to affect their behavior of course that’s completely but proven now and there’s lots of studies that that prove that. The big innovation about exactly was we were the first to the cloud right? So no, there was no other companies in the commission space that were cloud based we were literally the first and so our big innovation was you don’t have to buy this from caladice and spend you know huge amounts of money you could basically rent the software and. Buy it as Saas now again remember we started the company in March of o five I mean we were educating people on the saas world I mean Sas didn’t mean anything to anybody. No one knew what it was and so a big part of the company in the early days was just trying to convince people that saas was the future. Obviously as years went on. And the whole world shifted to shift to so to to Sas. In fact, the company that terminated me ended up changing their name to calladus cloud which I always thought was sort of hilarious. Um, but.

Chris Cabrera: Anyway, So the Cloud became the future that was the business ball that we you know had created and and sort of were were pioneering.

Alejandro Cremades: And then also you know as you guys were building the business. You know you you did um, a bunch of capital races too. Ah before the company going public. How much did the company raise.

Chris Cabrera: Um, we raised just ah, just shy of 100000000 which by today’s standards doesn’t sound like a lot of money but back in those days, you know it was a lot of money we we did an a round of b round a c round. Um and you know things have changed so much today that i. I don’t really quite understand it because it’s it’s it’s way easier to develop products but yet companies raise way more money than they than they probably should or need to part of that is because for many years the cost of capital has been so cheap that you know all these investors just have tons of money and so people are doing these giant a rounds and. And things like that it wasn’t like that in my during my time so we raised 100000000 and then we raised another 100000000 you know at the ipo and that was about it for the whole whole company.

Alejandro Cremades: Well I mean obviously you guys got sorry in 2005 so the venture landscape has say evolved quite a bit. No, but but for you guys being able to to do that which was remarkable. You know, raise the 100000000 then doing the ipo and and getting access to to more pools of money. Like you were alluding to how was that a journey to of of going public I’m sure that ringing that Bell was saying was quite an experience.

Chris Cabrera: I have to say it was ah it was on my bucket list and it was absolutely just a phenomenal experience. Um, you know again, even that things have changed back in those days, you know you you did the. Private jet thing flying around. Ah all these investors leading up to the two weeks leading up and then you price it and then you ring the bell you know we did the New York Stock exchange and you know you’re up on a platform and you actually press a button and there’s no bell ring and you just hold the button down and that’s what rings the bell and. You know I had my family surrounding me my wife marla and my my two kids were behind me my daughter at the time was at business school at usc where I had gone and so she had you know literally took time off of school to come and ring the bell with us on on the stage at wall street so it was like a family thing. It was really really really cool ah definitely once in a lifetime experience I think you know from that point it was it was sort of downhill from there primarily because we were relatively small as ah as a public company if I had it to do over again? Yeah, and and things again have changed I mean we went public on a $70000000 you know, kind of run rate which is. Today you could never do I would never take a company public today unless it was doing you know say $300000000 and you know and profitable. We had no profit. We were losing money I mean it was just a very different world back then and I realized that for me spending a ton of time on the east coast

Chris Cabrera: On wall street meeting with investors all day long kind of doing the same pitch over and over and over again. It’s not really my thing you know I’m more of a customer facing Ceo like I love being out in front and being with customers and prospects and you know, kind of selling the the vision of the company. And that’s not really what you did what? at least what I was doing as a Ceo public Ceo. So um, I was very happy when a couple years into it a private equity firm called Vista Equity Partners approached me and said hey we want to buy you and take you private. Um.

Chris Cabrera: Was frankly music to my years and has been ah that was about seven years ago and it’s been a phenomenal experience and.

Alejandro Cremades: And how was that and how was that like because when they came in you know, obviously taking it private and and not having to deal with the crazy you know, regulatory and compliance and and being so out there like you were saying too with Vista you know.

Chris Cabrera: Are.

Alejandro Cremades: How was that like I believe it was like a 600000000 you know type of deal. You know the stake that when they when they got in. But how was that like also of taking a company public. You know now private again.

Chris Cabrera: Um, yeah, like I say I mean ah I’ve heard all kinds of horror stories about pe and ceos that don’t have a good experience especially founders that don’t have a good experience I have had a wonderful experience. It was a great a great run. You know they I mean no question. Their whole premise was we were going to take you private. Allow you to go do some acquisitions to build out the product family and you know get the company to where it’s you know more profitable and you know here we are 6 so or so years later we’ve done 5 acquisitions. The company is you know. Well in excess of 200000000 and and dropping you know 30% ebi doll margins you know it’s ah it’s a phenomenal phenomenal company and not that we weren’t and when they bought us but you know frankly we weren’t I mean we were a public company that was you know, bouncing sales all around. We were not making money and you know it was. Not as much fun. It’s way more fun to run a company that’s profitable and you know, really well-balanced and and more healthy and vista helped helped us do that and has been a great partner throughout.

Alejandro Cremades: 1 of the things that you guys use to fuel the inorganic growth side of things was basically acquisitions. You guys did five acquisitions and as the saying is is that most acquisitions fail right? because of integration. So what did you learn. About integration too and using acquisition acquisitions as well as a method for for growth.

Chris Cabrera: Yeah I mean I think I think acquisitions um are a great way to you know, build out the product and in our case, we did not acquire ah large companies we acquired like technology. Acquired technologies that allowed us to build out our our product roadmap so that we were no longer just selling comp. We we expanded into selling you know things like you know, compensation planning and and you know a lot of the things that are. Ancillary or on both sides of the actual process of doing compensation. We bought a great company that was doing sales forecasting and you know so it’s tied into the compensation but it also does the sales forecasting so we allowed ourselves to broaden that. I think if I’m being honest of the 5 we bought I would say 2 were probably failures I would probably put them in the category of not you know if knowing what we know now we probably wouldn’t have done those but the other 3 have been phenomena phenomena and so ah, part of it is I just think that is you know you’re never going to You’re never going to bat a thousand on these things. Um. And and and that’s certainly true in our case but I’m very pleased with the ones we’ve done that have turned out very successfully and that has what’s allowed us to build up the product suite that we have today.

Alejandro Cremades: So have you um, identify any patterns maybe like 3 key ingredients that were ah common on the acquisitions that they ended up succeeding on the integration side versus the ones that ended up failing.

Chris Cabrera: Um, well I mean it sounds cliche. But I mean you know there’s no question that the people you like but 2 of the 3 that were successful the ceos you know were very engaged very much wanted to make these deals happen.

Chris Cabrera: The second in the second example, the Ceo stayed on with the company for well over a year year and a half um in the first example, he was a big advisor and supporter to me and so you know I think that’s very important right? and some of the other pieces that probably didn’t go so well. You know the company was you know the the Ceo bailed out right away and and that you know you lose a lot of that um tribal knowledge very quickly and and that’s kind of dangerous and so I think that you know the people matters a lot. Um, you know I’ve heard people say a lot. You know the location and all that kind of stuff matters. Although you know. Both of the acquisitions that we did that were are 2 of the 3 that I would say were very positive were on the other side of the country and so you know we we did we we managed to maintain those ceos and maintain those employees so I don’t really I don’t I don’t think that’s a part of it. Just think it’s more the ultimate culture and the leadership and then of course the products have to be great and you know I would say one of the lessons. We learned very early on and 1 of the first acquisitions we did is we did not do enough due diligence. Um, you know we we kind of were so excited to do this acquisition and we kind of. Saw this you know shiny thing and we like oh we want this and then after we got it. We’re like holy cow did somebody didn’t somebody look at this more deeply you know so that was a big lesson and then in the future ones we did a lot more obviously due diligence on the technology.

Alejandro Cremades: So in your case too. I mean it’s incredible. The fact that you were able to find time to also go into publishing books and you’ve done to the latest one you know is very much you know relevant especially to the environment that we’re in. And that is called the unicorn fallacy there you talk about you know some of the things you know to to think the way to think about growth or die you know type of mentality and and things like that. So So what else you know what people you know that are listening. You know if they were to pick up that book What what can they find in the book.

Chris Cabrera: Um, well I mean I think one of the things that always bothered me as ah as a founder Ceo especially you know as I say kind of all this happened in my life right in the center of the silicon valley where a lot of this technology companies were and I remember. Learning about the unicorn thing in the beginning you know unicorn is a private company with evaluation of a billion dollars and you know the original unicorns were you know I think Facebook and you know and Amazon these kind of companies and they truly were unicorns I mean they were by definition these special rare things. And I was obviously as a young entrepreneur very enamored with that I thought oh wow. That’s so amazing I’d love to be that someday and somehow over a period of a very short period of time I popped my head up and there were literally herds of unicorn running around the Silicon Valley and that’s such an oxymoron to have a herd of unicorns. So I mean because it by definition is not special. It is not unique and you had companies that were doing $20000000 in revenue $20000000 in revenue getting billion dollar plus valuations right? and you. And wearing that proudly that they were unicorn and all this kind of stuff and it always kind of didn’t sit right with me. It bothered me a little bit and of course as we’ve seen over the last you know, two years eighteen months many many of those quote heard unicorns.

Chris Cabrera: And not the special ones. There’s some,, There’s a lot better deserve it. But there’s a lot that don’t and many of those that got those crazy valuations are facing existential crises because their stock is you know way underwater the employees know that they’ll never grow into the evaluation again. And so these companies are having to either do recapitalizations or many of them are really just going away and so the book is really about ditch the whole mentality of growth at all costs. So You can get these crazy valuations and focus on building long-term businesses. Have a balanced rule of 40 or rule of 50 Um, where you know your growth is is good and healthy. But so is your ebidda margin and I think some of the lessons that we learned you know through our private equity experience of of keeping your eye on that ball of not spending like a drunk sailor. And also and then not trying to get these outsized valuations because neither of those things help you as an entrepreneur they might feel good but they actually don’t help your business in the long run. Um, and so the book is really chackablock full of examples of how to do. What I’m talking about how do how to create an environment where you can get a balanced rule of 40 or rule of 50 now.

Alejandro Cremades: So very recently you know you decided to ah to step down as the Ceo of the company and we’re talking about 19 years you know pushing you know, 19 years pushing exactly you know 19 years of an incredible remarkable journey. On the you know building this how was that you know for you after such a long time that’s almost everything that you knew you know for 19 years

Chris Cabrera: And it is and and you know when you add the 8 years I was at calice you know it’s a long time to be in a single space and you know these days you don’t see that very often and so um, you know my son came to me and you know he he was doing one of these Google ah.

Chris Cabrera: Jet chat gbt you know searches or whatever and he said you know dad you’re one of the 3 longest tenured sas ceos in the world and I’m like what are you talking about and so he showed me this chat tbt search that that showed that and I swear to god it Kyle made me go. Don’t know if that’s something that’s good I almost feel like I need to do something different I need to expand my horizons a little bit. Um I think that combined with you know, just getting a little bit older became a grandfather recently? Um, you know, kind of. Thinking about maybe doing some other things and and also you know I’ve been grooming a gentleman who was my Ceo a guy named Arna Mishra had been grooming him to become the Ceo and replace me because I knew that was inevitable and so it was just the the timing just felt right to you know, sort of. Elevate to just being a board member only and helping him kind of take over the reins as the Ceo I’m still going to be a very active board member. But you know this is ah exactly such a wonderful company and I want to leave it in good hands with people I mean my kids both work there. So I’m very very connected to the company and always will be um. But I just didn’t want to do the day-to-day you know grind of it anymore. You know I feel like you know that’s that’s you know, better for for someone that you know is more passionate and younger and you know wants to go prove that I have other things I want to go prove and I’d like to I’d like to prove that I could do something in a different market.

Chris Cabrera: You know I mean because I don’t want to look back on my career and go geez you spent the entire entirety of your career doing the same thing you know I’m only 57 so I figure I’ve got you know at least ten fifteen more years of good work I’d like to try some different things.

Alejandro Cremades: That’s amazing. So let’s say I put you into a time machine now Chris Cabrera: to try a different thing. You know a different way of thinking now you know, especially for the people that are listening and I bring you into that time machine back to 2005 you know you are now thinking about making a jump from kalidus to really starting what it essentially would become exactly but right before you know, making that jump you have the opportunity to appear in front of your younger self and having that opportunity of giving that younger self one piece of advice. Before launching a business. What would that be and why given what you know now.

Chris Cabrera: So well I mean I would probably advised him to you know, buy some Apple stock and you know some some Google stock and things like that. But but no I think really I think there’s not much I would do differently I mean we’ve had There’s been all kinds of trials and tribulations and failures throughout the years but all those things helped make us better so I wouldn’t want to just avoid those things I mean I do think when we raised money in the early days I didn’t I got some bad advice. 1 of my old mentors told me that you know everybody’s money’s green and so you know just take whoever’s giving the best valuation that turns out to not be true and I think you know one of the experiences we had was. You know we went through the downturn in 0 Eight Zero nine that was 3 4 years into the company’s existence and you know of course sales started to contract and we needed more cash and I went to my investors and said hey guys we need to raise more money and and a bunch of them. Had no more money wasn’t they were good people and they wanted to you know help the company but they just didn’t have the funds. They didn’t have the deep enough pockets and so the lesson I learned was the quality of the investor in terms of how deep their pockets are how much reserve they have allocated for you.

Chris Cabrera: Those were questions that really I didn’t focus on in those early in those early years and you know when you when you raise that money in the initial you know it’s like a merit I mean you’re signing up with these folks for a very long time to be on your board and be in you know in your kitchen and helping you grow the business and. And so I think I would probably tell that person or tell myself you know be a little more careful. Um on on who you bring into the under the tent and where the money is coming From. We ended up, you know, bringing in new investors and you know, kind of squeezing others out and we you know we ended up getting there but boy it certainly created some um. Stressful nights for me during that time.

Alejandro Cremades: No kidding so Chris Cabrera: for the people that are listening that will love to reach out and say hi. What is the best way for them to do so.

Chris Cabrera: Well I’m pretty available on Linkedin. Um, you know I do get a lot of Linkedin traffic. So you know, make sure you put something interesting in the question or you know or whatever. But I mean happy to help in any ways that I can um, um, you know. Actively evaluating what I want to do next and and you know, but anyway yeah, I’m but very I have more time now than I have been a long time so you know I’m I’m open to you know helping in ways that whatever I can do.

Alejandro Cremades: Amazing. Well hey Chris Cabrera: thank you so much for being on the deal maker show today. It has been an honor to have you with us.

Chris Cabrera: Thank you so much I’ve enjoyed the conversation.

*****

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