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DUN & BRADSTREET & STIBEL & COMPANY
Redefining the "Realm of the Possible"
If you ask Michael Kumin, partner at private equity firm Great Hill Partners, you’ll hear a colorful story about how Jeff Stibel and team achieved seemingly impossible things after acquiring a depreciating asset from Dun & Bradstreet back in 2010 – a startup they had cofounded together as Credibility Solutions the year before – by transforming it and selling it back to Dun & Bradstreet in 2015.
It started when the team raised $100M in funds from private equity firm Great Hill Partners in 2010 – when Stibel and team were chosen by D&B to captain the Credibility ship into profitable waters.
The team immediately got to work, executing an end-to-end transformation that included, amongst other things, “identifying the best path to value creation, designing the strategy to maximize that potential, and setting up the right operational model and infrastructure to ensure results were achieved and the business was equipped for the long run,” reveals Rich Veldran, CFO of Dun & Bradstreet at the time, who was instrumental in the deal.
Led by Jeff Stibel who served as CEO, Aaron Stibel in Technology, Moujan Kazerani in Legal, Judy Hackett in Marketing, Pete Delgrosso in Business Development, Bill Borzage in Sales, Gonzalo Troncoso in Operations, and Wisdom Lu in Finance, the sequence of events that ensued served as a telling example of what Bryant Stibel would eventually evolve to.
The team’s efforts won the respect of the Dun & Bradstreet executive team at the time, including Bob Carrigan (CEO), Josh Peirez (COO) and Rich Veldran. “The team did everything we expected and more: rebuilding the platform, expanding the product set, opening up new alliance relationships, overhauling the go-to market model, and turning the business around,” recalls Veldran of the Credibility business he knew had potential, one reason Dun & Bradstreet ultimately bought it back.
But the business transformation wasn’t just about turning around the product – it was about making a philosophical shift according to Carrigan, who credits Jeff and team with building great value by transforming Credibility from “a company that sold products to a company that built relationships with small business people.”
The results impressed Carrigan, who first arrived at D&B in 2013. “They took a business that was on a pretty sharp downward trajectory and reversed it pretty sharply to the positive. You have to have a vision around that and an approach. That’s strategy and execution… and they applied that quite masterfully to the situation.”
In a relatively short period of time, Stibel & Co. added immense value by doubling the company’s revenue. In just a few years, the team accomplished things that some people in the room – including Carrigan – didn’t think were in the realm of possible.
In 2015, after an intense five years working on the business, Stibel and team sold Dun & Bradstreet Credibility Corporation (as it was now being called) back to Dun & Bradstreet for $320 million.
Creating Value Where There’s Potential
Beyond sheer facts, there’s an angle to the story of how this deal got done that rarely gets told in the story’s retelling. Go beneath the numbers and you realize this “reverse merger,” as Carrigan calls it, happened because of the people on both sides of the table. People who possessed a high degree of respect and admiration for each other, their different backgrounds and unique blend of entrepreneurial skills. You won’t find it on a deal memo, but relationships formed at the time that still endure to this day.
Kumin has known Stibel for a decade-plus since their days at Web.com, and was impressed with the dedication that poured out of Stibel and team when it came to growing the Credibility business.
“Unlike Bryant Stibel’s current model, they were running this thing exclusively. It wasn’t Office of the Chairman. It was a bit different – it was 100% focused,” says Kumin, illustrating the difference between then and how the team caters to its portfolio companies now.
“In probably no more than two years, Aaron and his team effectively reengineered, rebuilt, re-architected from scratch an entire tech stack, which ultimately was so well-thought out that when Dun & Bradstreet bought back the company,” recalls Kumin, “they would later realize, unbeknownst to them, the tech we built was actually more nimble and scalable than what they were spending tens, if not hundreds of millions of dollars on.”
Understanding the “Art of Possible”
As former President/COO of Dun & Bradstreet, Josh Peirez was one of the key principals negotiating the deal on behalf of Dun & Bradstreet for the acquisition of Credibility Corp. He recalls one of the key parts of ultimately reaching this deal was his relationship with Jeff and simply “being able to trust each other and be as transparent as we could – to understand what mattered to each other; to understand what was impossible so that we could understand what was the ‘art of the possible.’”
In order to achieve such things, Peirez credits their willingness to get in the trenches. “They really are hands on. You know, they very much roll up their sleeves, help with the execution, help you to understand where you’ve got liabilities and where you’ve got opportunities and how to identify one from the other and track it and drive it.”
Not that there weren’t a few bumps along the road.
For one, Jeff literally broke his foot on a cobblestone street in Manhattan once they were deep in negotiations. Carrigan recounts the story. “We were right in the middle of negotiating the acquisition of Credibility Corporation and Jeff broke his foot at the Standard Hotel. It was one of those freakish accidents… like ‘how the hell did you break it like that?’” Carrigan recalls, being slightly amused by one thing, however. “Jeff didn’t want to go to the doctor right away. He didn’t want to let a mere medical issue like that get in the way of getting the deal done.”
But that wasn’t the only wrinkle.
Admittedly to all involved, there was a certain oddity for Jeff and partners, who suddenly found themselves negotiating to sell a company… to a company they technically worked for… with the hopes of staying on to operate it once it was sold.
“Our primary business partner became our number-one adversary,” reveals Kumin, who recalls how Jeff needed to be “very strategic” from a deal perspective given the unique circumstances. “He really understood the opponent, if you will, which was interesting because they were also our partners.”
But, luckily for both parties, this case of strange bedfellows had no lingering aftereffect according to Kumin. “Jeff and his team came in with a very tight and focused business strategy, which ended up being highly successful. Their ability to navigate that minefield and keep their eye on the ball operationally and strategically was extraordinary.”
A Case Study for the Future
One thing that impressed Peirez through this whole process was the team’s ability to substantiate value through the use of data, and then act on it.
“They have an incredible vision for what’s possible, but it’s based on data. They don’t just start with hypotheticals and brainstorming; they actually start with a very detailed review of the information and the data available on the business, on the industry, on the competitors, on clients, and then to push out some tests to learn. It’s a very well-formed view of what’s possible versus some people who are just ‘big thinkers,’” praises Peirez. “But the part that I would say was the most valuable is the creativity they have in being able to very quickly test and learn, pilot something, bring it to market, see the results, and then either triple-down on it or stop it quickly.”
This ability to exemplify the test-and-learn approach has become a trademark quality of Bryant Stibel – not to mention something that changed behavior at Dun & Bradstreet, a company that’s been around since 1841, employing four U.S. presidents along the way, including Abraham Lincoln, Ulysses S. Grant, Grover Cleveland and William McKinley.
“They were constantly testing new products and brought more of the SaaS mentality, the SaaS philosophy, to bear – which I think is a more modern business approach,” recalls Carrigan about the efficacy behind the team’s agile test-and-learn offering.
Veldran insists that’s for one key reason. “They’re exceptionally good at embodying the entrepreneurial spirit of fast-paced, of trying things, launching things, failing fast if it fails, and then leveraging it if it works.”
“If you can show that you’re entrepreneurial, you’ll attract entrepreneurs to use your product. That’s core to their operation.”
On the Merging of Minds
Given the magnitude of the merger, it might be tempting to wonder what happened to the key parties involved once the buy-back was complete. One development was that Carrigan asked the team to stay on at D&B to lead the “emerging businesses” division in a capacity that became the precursor to today’s Office of the Chairman role.
That’s when Jeff became Vice Chairman, with the rest of the team taking on leadership roles throughout Dun & Bradstreet Credibility Corp. – Bill Borzage as SVP of Sales, Peter Delgrosso as SVP of Business Development, Judy Hackett as SVP and CMO, Moujan Kazerani as SVP and General Counsel, Wisdom Lu as SVP and CFO, and Gonzalo Troncoso as SVP of Operations. Aaron Stibel was brought on as SVP of Technology and CTO of Emerging Businesses to lead the integration of the Stibel & Co. cloud-based platform.
One reason for this unique deal, according to Carrigan, was that Stibel & Co. knew the business better than anyone, given they built many of its new capabilities. When you’re putting things in motion that “probably moved the industry forward a decade from where it had been” as Peirez puts it, you become relatively invaluable – and Dun & Bradstreet recognized this.
Another reason behind the deal is the vision the team brought for the future of Dun & Bradstreet Credibility Corp. Peirez credits Aaron Stibel for his role in expanding Stibel & Co.’s contributions to D&B – specifically his ability “to see that he could move the entire data processing and client services center into a cloud-based AWS instance, and use that with commercially available capabilities to offer everything from credit reports to customer service and sales systems.”
Rich Veldran attributes the success of the “reverse-merger” to Stibel & Co.’s flexibility and proven skill. “When I think about when we brought them on to D&B, the Credibility team had an earnout as part of the deal, so they had to achieve certain metrics in their business to get the earnout. We very quickly realized there were other things we wanted that team to do because they had the capability to do them.”
Stibel & Co proceeded on what was essentially a handshake deal as Veldran recalls. The team’s position being, “We’ll do the work and we will trust that, at the end, you’ll take that into consideration as you think about the earnout.”
This approach paid off in more ways than one, as Veldran admits to being impressed with the company’s character. “They cared more about the greater good of the company than their own economics; but they also trusted, because we were good partners, that we would do the right thing.”
Ultimately, Stibel & Co.’s contributions culminated in the sale of Dun & Bradstreet for $7 billion in 2019, putting an exclamation point on a gratifying and momentous decade of work that made the impossible, possible.