Rick Berger was appointed CEO of Rootstock in April. He has an impressive resumé of leadership with ERP vendors such as Infor and Oracle, working mainly in retail technology. Most recently, he was President of NewStore, a firm that works with retail brands worldwide that want to accelerate their digital transformation. I spoke to him recently, first asking him for a thirty-second pitch for Rootstock.
He replied, “I think of Rootstock as a challenger in the manufacturing ERP space in sort of a legacy old data technology world. It’s the only ERP that is built on the Salesforce platform, and it’s specifically built for manufacturing. It offers a modern, cloud-first, AI-ready infrastructure. We’re in a unique position to bring a level of innovation that the industry really needs. We’re able to do that because we have an amazing team of industry experts.”
State of the nation
Rootstock is mainly owned by Gryphon Investors, with Salesforce also owning a share of the ERP vendor. As such, it does not publish results. I asked Berger what he could share about Rootstock’s growth and size.
“I’ll share what I can. First of all, our business is succeeding. We’re winning new logos every single quarter. Rootstock is putting more investment back into the business every single quarter. We’re growing the business by about 30%, year over year.
“From a channel perspective, we have a really strong partnership with Salesforce. That’s at every facet of our organisation. We’ve got what I believe is a world-class customer retention rate of 95%. It’s one of the reasons why I came onboard, our deployed customers are really happy and really successful.
“We have 130 plus employees, 180 customers, and I think we’ve got close to 20 ISVs and channel partners that we work with. It’s a huge part of our strategy and vision. We are a remote-first culture, with many employees based across the world. We have one office in San Francisco, where we’re headquartered.”
What about international growth?
“North America is our biggest focus, but Europe, Australia, and Japan remain other focuses. We’re thoughtful about entering new markets.”
An example of that was its entry into Japan, where Salesforce has its second-largest customer base with a lot of manufacturers. Rootstock is now seeing growth there according to Berger. I asked Berger whether Rootstock is taking a channel-first approach internationally.
“Not necessarily. We have a strong internal presence in Japan, Australia, and Europe. We’re leading with our resources in those markets. In newer emerging markets, I would see it as a smart play to seed through the channel first. We’re exploring that, but it’s early days.”
Vision
Berger is only six weeks into the role and is still formulating his vision. I, therefore, asked him what vision the investors shared with him for Rootstock.
“One of the things that I’m seeing is that manufacturing is changing. Technology is needed in manufacturing to help accelerate that change. At the same time, we’re seeing that there’s this reshoring of our manufacturing in North America. There’s this review of what ERP really means, especially in the world of AI.
“The main focus is we want to provide a world class manufacturing ERP deployed globally. We already do business in 25 countries, and we want to continue to innovate and support our customers. We want to have a really strong attention to customer success. Because I firmly believe that if you do the right thing for customers, then success is going to follow and more customer success is going to come from that.
“Making sure that we have a strong rate of innovation is key for us that we’re innovating at a rate that our customers feel like we’re on the forefront of what’s coming next in the industry.”
Strategy
What is your strategic horizon, and what objectives do you have?
“I see it in buckets. In the short term, we’re halfway through the year, and I’m trying to figure out how we can finish up 2024 strong. I’m assessing, I’m doing a lot of learning from our customers, partners and employees. My hope is that we can learn from that to build the foundation for long-term, repeatable, scalable growth.
“Long term, I’m assessing what is the innovation that’s necessary for us to be on the forefront of what’s most important for manufacturing ERP. What I’ve learned from the manufacturers that I have talked to over the last six weeks is they want thought leadership to help innovate and take advantage of technology to expand their business. Many of these mid-sized manufacturers are family-owned, with employees who have been there their whole careers.
“I want to be thought of as the leader in that space. We can because we’ve got an amazing, talented team that has seen 180 manufacturers take advantage of our technology. We also are constantly evaluating what’s necessary to continue to invest in that space. I want to have happy, successful customers who, with their collective voice of 180 customers, make our product better today.”
Are you likely to make any acquisitions?
“Yeah, we’re always looking to expand our strategic relationships, but there’s nothing on the short-term horizon in terms of an acquisition. That could change if something interesting came (along).”
Will Berger bring retail into Rootstock?
Berger has a background in retail technology, first with Oracle, then Infor and most recently, NewStore. Will Rootstock take advantage of the manufacturing trend towards DTC and add an integration with Commerce Cloud?
“One of the things that I really think is valuable from my experience in NewStore. NewStore was the connection of the Commerce Cloud to the physical store. The founder of NewStore was the founder of Demandware, which became the Salesforce Commerce Cloud.
“Those are interesting conversations where you could bring that digital experience into manufacturing in that connection. It hasn’t been something we’ve talked about in our roadmap, candidly, but now that you brought it up, it’s a really good, interesting discussion to have.”
On the market
What is your target market?
“Right now, our target market is solely focused on mid-sized manufacturers, who consider themselves tech innovators and cloud-first. Candidly, they want to be on the Salesforce platform and take advantage of all of the wonderfulness that comes from being on that platform. Typically, they have some deployment of Salesforce there.”
That seems a broad spectrum, how does Rootstock focus its marketing efforts?
“Manufacturers who are already on the Salesforce Platform or who are interested in it immediately see the value of a seamless ERP and CRM, a unified data platform, and cohesive user experience. We see this segment as being an obvious fit and have had a lot of success there.”
What differentiates Rootstock?
“The number one differentiator is that we’re the only manufacturing ERP on the Salesforce platform. We think there’s a lot of great advantages to doing that. They’ve got world-class technology.
“The other thing that allows us to be differentiated is our rate of innovation. Our rate of innovation is much higher than what you see from legacy data technology that exists in the market. Another area of differentiation is the talent and the team of experts that we have. What I see as a common theme is that when I talk to manufacturers, they’re really looking for experts to tell them how to deploy this technology and how to get efficiency from it.
“We’ve got a fantastic team that has built their career in manufacturing. They’ve seen 180 customers deploy Rootstock. Also, they’ve had experience outside of Rootstock, and they’re bringing that to the table.
“Then we differentiate on just the passion for customer success. This is something that’s really important to me, that every customer we want to make sure gets value and success from our solution.”
“What I can tell you is the one thing when I ask our customers, why did you pick us versus a competitor? They picked us for the reasons I said before: our innovation is much higher, and our team is much more knowledgeable. They felt if they could hitch their waggon to us, their voice would be stronger, and they’d have the domain experience to make sure they’re successful. And that they’d be on a platform that’s going to innovate for the next 10 to 20 years.”
On Culture
Rootstock was originally founder-led by Pat Garrehy. How has the culture evolved, and how do you intend to evolve it going forward?
“I have had the opportunity to talk to Pat a couple of times. I am very impressed with Pat’s ability to build an amazing business. And to have done that a couple of times in his career is fantastic. For him to share his tribal knowledge with me and to take the time to do that, I very much appreciate it.
“He built a great culture of being an innovator and a challenger. He was going up against some really big players and winning because he differentiated on culture, having really great domain experience and thought leadership.
“The culture I want to have is a continuation of that, maybe with a little bit of a different spin. I’m really passionate that our employees and our team are building a career where they’re getting better at their craft every single day. I’m really passionate about unifying around a strategy and supporting our customers in a way that we feel like we’re making a difference. We have this amazing problem that we’re solving in the industry, and we’re doing it in a unique, innovative and nimble way.
“I’m passionate about building an environment where the relationships, whether that’s at Rootstock or whether that’s with our customers, transcends employment. Meaning that when you leave Rootstock, you’re still going to talk to your customer, or you’re still going to talk to your peers.
“My hope is that as we scale this business, we get the growth rates that we’re expecting and hoping for, that there’s financial reward for the team. When that happens, and you create a culture of winning and doing the right things for your customers and your employees, the magic happens.
“Any one of us can look back in our careers and say, hey, there was a time in my career where it all came together. I was supporting customers, solving meaningful problems in the industry, getting better at my craft, and building meaningful relationships. I was happy every day at work, and I had meaningful financial rewards for my family and myself. That’s the culture we want to have rooted in doing what’s best for our customers, innovating and winning.”
The Book question
What was the latest book you read?
“I love to read. Sometimes they’re audiobooks, because I drive a lot to soccer practices with my three kids all over the place, or I’m on aeroplanes. But I’ll give you two books because I try to alternate between a business book and a pleasure book.
“The business book that I recently read was ‘The First 90 Days’ by Michael Watkins (Amazon Aus, UK, US). That really helps you think and outline the strategy becoming as quick as you can, net positive in a company.
It helped me think about my interactions coming in, how people might perceive me coming into the business, and what I can do to build out a 90-day plan to get us a net positive contributor to the business as quickly as I can. I finished that before I joined Rootstock.
“The book that I just finished was a leisure book, The Wright Brothers, by David McCullough (Amazon (Aus, UK, US). It chronicles the journey of the Wright Brothers path flight. It talks about their childhood, talks about how they built their bike store, and how they built this passion around being the first to fly. But more importantly, the themes I got from it is just perseverance, never giving up on your dreams, fighting against all odds. It’s an amazing story. If you have time, I’d recommend you read it. It’s pretty quick.”
