Chad Gates, Managing Director of Pronto Software, was invited to deliver a welcome address at the recent Family Business Conference 2019. Here are excerpts from his presentation.
I’m often asked about the history of Pronto Software. It’s one I think is particularly important because who we are as a business is intrinsically tied to our story – and the events that moulded us. So let me share with you how we grew from a small business created in Melbourne to the powerhouse we are today.
In 1974, a company called CMAD, a respected computer hardware business, hired a contractor – Dave Nolan, owner of Prometheus Software – to write the systems code for a software application designed to run on CMAD hardware. The idea was to offer the new software to customers, differentiating CMAD from its competitors who just offered hardware. CMAD leaders however did not see immediate results from the plan – and were also experiencing financial pressure. Dave who was passionate about what he helped create, decided to buy the rights to the software and progress its development. I think this is particularly important because at our core, we remain innovators with a deep passion for what we build.
Prometheus Software grew rapidly and we won many customers. The profitability of the business drew the attention of a very successful dot-com business called Sausage Software. They approached Dave and he decided to sell the business, strongly believing that this was a path for the advancement of Prometheus. As we all know however, in the year 2000, the dot-com bubble burst and Sausage Software fell into trouble. Another well-known business, SMS Management, managed a reverse takeover of Sausage Software, acquiring Prometheus as part of the deal. Their business strategy did not include what Prometheus offered and as a result, they decided to put us up for sale.
Our CEO at that time, David Jackman, was a visionary. He knew this was a profitable business with a solid customer base – we just needed the opportunity to have a good run. David worked with the management team to write a prospectus and organised a staff buyout. Employees took out personal loans to acquire the funds as the business did not have any institutional debt. I believe this is where our indomitable spirit and the strong collaborative nature of our employees was born.
With people who owned the business working in the business, the company grew from strength to strength. Employees received the money they invested within two years – and it has been repaid many times over since then. In 2012, we restructured into a public company and more staff were able to buy-in at that stage. Out of our current 420+ staff members, we have about 150 who own part of the company. To this day we remain self-funded and self-governing – even though we are an unlisted public company.
We now have more than 1,700 customers in a wide range of industries – and many of them have used Pronto Xi, our Enterprise Resource Planning (ERP) software, for decades. Importantly, we continue to attract new customers at a consistent rate – despite being one of only a few Australian businesses in a space crowded by massive multinationals, we are a significant player. The solutions we create are perfectly suited to the Australian market given our strong local investment in R&D, something quite rare in the ERP space.
Many of our employees have worked with us for a number of years – more than a few close to or over 30 years – and we continue to grow our staff base, hiring around 40 people in the last financial year. In the last twelve months, we also launched our graduate program, in conjunction with Deakin University. It has been a fantastic success in two departments and we are looking to expand this across the company, over the next couple of years. When we hire, we look for what drives the person, their attitude and skill. Cultural fit is extremely important because when an employee is sitting across the table from our customer, over and above their expertise, we want them to show integrity and pride – two qualities that are amongst our core employee values.
Why do we think of ourselves as a zebra and less of a unicorn? As you might have heard, almost every tech start-up is looking to be a unicorn. They want to be valued highly, they work to acquire customers as quickly as possible – all this just to drive up their value to secure venture capital and eventually be acquired by the highest bidder. At Pronto Software, we don’t take that view. We would much rather be something unique but real, like a zebra – an animal most of us may not see every day but we can, when we choose to!
The software we offer, ERP, is typically viewed as the heart and lungs of a business. It’s really important that the owner/business leader exploring an investment in ERP, has the trust that when they invest, it is with a company who is going to be here tomorrow and the next day. And the day after that. That’s one of the major reassurances we give our customers. So yes, we give you something fancier than the standard horse but it’s not a mythical creature. Pronto Software is a team that’s rare, real and trustworthy. We’re more zebra, less unicorn.