Dean Forbes became CEO of Forterro, a company backed by Battery Ventures, in February 2021. Enterprise Times spoke to him before he started the role and again recently. Forterro is growing organically at double digits. It has around 10,000 customers after the recently announced acquisition of myfactory. The company now has twelve brands, with myfactory and 123 Insight Ltd being the two acquisitions to join Forterro in 2021. Revenue is estimated to be in the region of €200 million.
What is your vision for Forterro?
“One of the things that I love and is brilliant about this company is these product brands thrive in very specific customer segments. We intend to have them continue to thrive in their dedicated customer segments. We think one or two of them can be extended to address other customer segments where we don’t have existing brands. One of those is the Sylob product in France. We think that can be internationalised to serve similar mid-market manufacturing customers on a multinational basis.”
Forterro recently acquired one of its German channel partners. What is the current partner strategy?
“It’s a brand by brand strategy. Many Abas partners are almost franchise organisations and are dedicated to ABAS. They have huge expertise on the product, with lots of technical and integration skills. It makes a lot of sense to make those partners part of the fold. For the rest, it’s on a brand by brand basis. We’re not that partner-centric outside of ABAS.”
Forterro entered the UK market with your acquisition of 123 Insight. ABAS bought a channel partner, and you have just purchased myfactory. What is next?
“We’ll probably do some more partner consolidation as well. We’ve got our eye on further establishing ourselves in what you could consider newer geographies for us. Newer, because we’ve only recently gone into those geographies or new because we’re not yet in those geographies.”
What is your integration strategy for the brand? Will you build a platform as other acquisitive organisations have done?
“We are going to do a couple of things. There are a lot of places across the brands where we can share resources, components and learning. That’s a mix of technology and people, which we haven’t done in the past. In terms of technology, we’re building above the brands. We’re going to have the Forterro platform that could include stuff like BI, commonly shared cloud components and layers, user management, et cetera and horizontal acquisitions that we will do.
“The brands will reach up into the Forterro cloud to consume those components or products on an as-needed basis. Which is different to trying to put the brand onto a common platform. We’re going to put a common platform above the brands and let them decide on which components of that they need to consume.”
How will this new branding look from a customer perspective?
“We want ABAS customers to be proud of using ABAS. We want ABAS customers to know that it is built in Germany, largely for German originating manufacturing customers. That Forterro cares a lot about the requirements of those businesses.
“The ABAS product is part of a strong, European focused international brand. One that cares a lot about manufacturing companies across multiple European geographies. There’s a lot of learning that comes from that. There’s a lot of best practice that comes from that ABAS customers can enjoy because we’ve done it in Sweden we have done it in France and other Geos.”
What have you achieved this year since joining the company?
“We’ve managed to develop, have approved and begun implementing our five-year plan. That five-year plan is centred on more unification of Forterro. Preserving the brands within it because they’re very powerful within segments, but more sharing of resources and components. Delivering the Forterro cloud strategy that I just described. We rebuilt the management team. There have been a handful of executive changes. Some folks are here already, and some folks will be here shortly.”
Recent hires include Frederic (‘Fred’) Stark as chief technology officer and Sharon Looney as chief human resources officer (CHRO) in October. In November, it announced that Arndt Andresen had joined as Chief Delivery Officer and Christoph Friedl as Chief Sales Officer of abas Software Gmbh, one of Forterros largest brands.
On the future
What do you hope to achieve in 2022?
“In 2022, we’ve got a handful more acquisitions in the funnel, all of which are progressing really nicely. I hope to announce another sizable one in Q1. I hope to start to implement this revised brand structure.
“We want there to be a singular Forterro company. At the moment, there’s a collection of companies owned by Forterro. Forterro has 10,000 midmarket manufacturing customers across Europe. That’s a sizable, powerful, extremely focused ERP business.“
What do you want Forterro to be famous for?
“I haven’t surveyed the market sufficiently, but I’m fairly confident that this company has the greatest concentration of manufacturing customers in its target markets in Europe. We’re very proud of that. We think a lot of the bigger players have forgotten that.
“We want to be famous for caring about that profile of customer. Understanding their needs, and really, really deliver on those needs in a very, very specific, and intense, way. That’s why the independent brands are so important because you can’t do that with one platform across multiple geographies.
“You have to hand-knit these applications for the types of manufacturing being done in a certain size of organisation, in a certain Geo. That’s what we do, better than anybody today.”
What are your challenges?
“Just the pivot of pace. The company has grown low single digits historically, it hadn’t done any acquisitions since the middle of 2019. We probably will have done four, maybe five, by the end of December. We’ll be going into next year with a strong mid-teens recurring revenue growth plan. That’s a significant change of pace for the business. That’ll be the biggest challenge, just piloting things once we change gears.”
The book question
What’s the latest book you read? And what was your take out for business?
“The latest book I read is Bad Blood (by John Carreyrou Aus/ US/UK). It’s about the Silicon Valley lady who pioneered the blood testing solution that raised billions of dollars but turned out not to be true. The lesson from that was, in case I didn’t know before, do not over promise and under deliver.”