Louis Têtu is one of
most successful tech sector entrepreneurs. In his early
20s he and his older brother built supply chain software
pioneer Berclain into a $20mm per year company before selling
it to Baan Software. Shortly afterwards Louis founded Recruitsoft
(later re-branded Taleo Software) which he built into a
$200mm per year, publicly traded talent management SaaS
powerhouse. Louis is now at the helm of Quebec City-based
Coveo Software, a fast-growing enterprise search software
company which he believes will be his greatest success
Bob Hebert sat down with Louis to discuss his career and
How did it all get started for you?
I graduated with a mechanical engineering degree from Laval
University at the age of 19. I was clearly pretty young and
had no idea what I wanted to do. I joined Bell Canada and
spent 18 months working as an engineer. I enjoyed myself
there but soon realized that this was not where I belonged.
I then joined a small robotics company where I worked in
sales and marketing. This gave me a sense that I liked smaller,
more entrepreneurial businesses. It also convinced me that
I love being with customers where the action is.
About that time, my older brother had written a scheduling
software engine that he was starting to commercialize. I
thought the software, and the problems it addressed were
interesting and so I joined him. I had no family at the time
and no obligations and I figured why not take a chance?
If you removed the constraints, the obligations
and fears around people’s lives there would be a
lot more entrepreneurs out there. For me, and for many
others, youth provided the right conditions to start going
down that path.
How well did Berclain develop?
It went very well, though if I knew then what I know now
it would have gone a lot better. We had hands-down the best
technology in the sector at the time and we were able to
get considerable traction in the marketplace. We built the
company into a $20mm per year concern with 175 employees.
But we were young and inexperienced. Though we had the best
technology another company called i2 had the sizzle, the
buzz, the money and the relationships. Their growth dwarfed
When Baan went public we saw an opportunity
to really propel our business. We spoke to them and shortly
afterwards, in 1996 we became Baan’s first acquisition.
I became head of their supply chain solutions division
which was a great experience for me.
Over the next two years I had a front row seat in a company
that grew from 1,700 to 6,000 employees. For a 31 year old
guy that was pretty exciting and I learned a lot.
What lessons did you take from Berclain?
There were many. For one, you have to be pragmatic. Berclain
became successful but we were never going to be a global
leader. We had great technology but we had not differentiated
ourselves commercially as the best in anything. To rise to
the top you have to be differentiated and I now spend a lot
of my time understanding how firms differentiate themselves.
Success lies in being the best in something, whatever that
may be and you really have to get that proposition right.
Also, selling the business to Baan was absolutely the right
thing to do. They had the resources, the global footprint
and the brand to make really something of us. It was also
the right business deal for us as a good portion of our buyout
was paid for in stock and over two years the value of that
stock rose from $24 to $108.
I learned never to fall in love with
a business. You have to be pragmatic. I do not ever want
a ‘Me Inc’ thing
happening. Running a successful business is not about me,
it is about the business. The company is not my baby. My
babies are at home not at the office.
I look at businesses as adventures in
building, in creating value, in solving problems. But I
separate myself emotionally from the business so that the
right decisions can be made on what’s the best thing
to do at any given time. I want my businesses to be successful,
and I do not build them to sell them. Taleo remains a growing,
thriving standalone business. But, I will always do what
I think is the right thing for the business.
Finally, that business taught me to trust my instincts.
At some point entrepreneurs question themselves as to whether
they are the right people to continue to run their businesses.
While you always need to develop and push yourself to get
better, you have to be careful as you will always be told
that someone else can run your business better than you.
That is often not the case.
I fell into that trap. I was very young and people always
questioned how far I could take the business. At one point
we hired a US-based president who was supposed to be seasoned
and successful and who would take us to the promised land.
It was a total flop and it cost us a lot of money, time and
momentum. I knew at the time it was the wrong thing to do
but I did not trust myself. You have to continually learn,
you have to continually push yourself to get better but you
also have to trust your instincts.
What happened after Berclain?
After 2 years at Baan I got bored with corporate life and
I had invested in a job board in Quebec and started to think
about jobs and companies and the whole talent issue. I started
to see that the flow of talent was another supply chain and
that technology could be applied to it in exactly the same
way as we had done at Berclain.
In 1999 we started a company called Recruitsoft aimed at
automating some of these processes. As the business expanded
to include talent management we found the Recruitsoft name
a little restrictive and changed it to Taleo.
How did you approach building Taleo?
It was 1999 and all I knew for sure was that I was going
to learn from my Berclain experience. This time I wanted
to move more quickly and invest aggressively. We had a superb
value proposition and I was certain that the trending was
on our side. We needed to get out there fast.
The success of Berclain was helpful as investors were willing
to listen to us. We had a good story behind us, an exciting
new category that we were pioneering, a compelling value
proposition and an absolute certainty that we were going
to be successful.
And when they heard us they agreed to
invest in us. We immediately started to build the leadership
bench that could make this happen. And we just didn’t
build a bench, we built one ahead of the growth curve,
pulling together a group of high performers who had successfully
scaled businesses such as ours and who brought knowledge
and wisdom to the table.
We did the same with the board which was world class.
What changed in 2001?
Well, as everyone knows the market crashed and we were forced
to build the company in the midst of a recession. As I think
about it, all three of my businesses have been built in a
recession. I have never actually built a business that has
truly taken advantage of a bubble.
The downturn did not really matter. Companies were as open
then as they are today to good ideas that will make them
more productive or save them money. We hammered away at telling
our story in the marketplace.
We also kept raising money through the downturn. I remember
going out to Bain Capital who initially looked at me like
I was from another planet. Peoplesoft had 72% of the human
resources software market at the time and here we were in
a down market talking about a new category and an ASP model
no less. But I am not a gambler. I take calculated risks.
I showed them our research, I showed them why this business
would work and how they would make money. After looking at
our assumptions and our numbers it began to make sense to
them as well and they became one of our biggest supporters
helping us immensely along the way.
As an aside, there is always a lot of investment money available,
even today, despite what people may think. The shortage is
not access to money, it is people who know what to do with
How did you make Taleo a success?
There are no certainties but we could see that though the
internet had yet to mature to mission critical quality, it
was going to get there. Our solutions made sense, they solved
problems, they helped companies and they were very easy for
companies to buy. Though CIOs were skeptical of having their
data outside the firewall I could see that this was going
to happen as the internet matured. We were early in selling
an ASP model but we knew it was just a matter of time.
We invested heavily in sales and marketing and put a lot
of people out there educating customers. Our value proposition
was unassailable. In 1999 we had revenues of $200k and that
was with Bombardier who gave us our first chance. In 2000
revenues grew to $2.8mm. In 2001 revenues went up to $13mm.
In 2002 it was $28mm and then $44mm, $64mm, $79mm, $120mm
and now Taleo is over $200mm and mostly recurring revenues.
And the category is expanding as Taleo has moved into performance
management and related talent management applications. The
future is very bright for Taleo.
Taleo went public in 2005, when I passed the CEO reins and
then phased out altogether in 2008. I remain a shareholder
One of the interesting aspects of your story
is that all of your companies have been built in Quebec
City. Can you talk about this?
Quebec City is my home. It is a wonderful place with a great
quality of life. There is also tremendous talent there. It
is a university town with a great mix of people and companies.
Though one can focus on the challenges of driving a global
company from a predominantly French, relatively small city,
I look at it as an advantage. We have created a distinct
personality to all of our companies by mixing and matching
talent from Quebec and elsewhere.
It is simply not true that you have to move to the US to
build a company. That said, we have tax harmonization issues
between Canada and the US which are a real challenge for
cross border financing. They also act as a disincentive for
setting up companies on this side of the border.
But, there is no reason why you cannot
build a great company headquartered in Quebec City, Halifax
or Edmonton for that matter. Look at RIM in Waterloo or
Cognos in Ottawa. You just need to manage these companies
differently. You need to mature your management style to
deal with distributed management. You need to mix and match.
But it can be done and done very well.
The amount of data enterprises are dealing with is doubling
every 18 months. And a lot of this explosive data growth
is unstructured information like email. All of this needs
to be unified and indexed so that it can be found, organized
and used, both for productivity reasons as well as compliance
or litigation support. The mobile world is adding even more
opportunity to the situation, as Smartphones are bound to
become a secure access into all enterprise systems. The whole
search paradigm which Google has brought to the world needs
to be brought to the enterprise. That is where Coveo is positioned.
It is a massive market opportunity.
I was not the founder of Coveo. It was founded by individuals
who had a prior company called Copernic. These individuals
have long and deep experience in metasearch and desktop search
which they have continued to develop. They are brilliant
at unifying data and information access in enterprises. It
is complex wonderful technology.
I originally joined the Board of Directors and had the technology
tested at Taleo and elsewhere. Later, as I phased out of
Taleo I spent more time with the founders helping with strategy.
At the end of 2007 I invested significantly in the business
and eventually joined full time, primarily as I saw a phenomenal
team that I could work with.
I am back to doing what I love, building exciting companies
with exceedingly smart and high integrity people. Coveo is
and will be a fantastic company. I love its value proposition.
What is your role in building a company?
My job is to pick the direction, see where the business
needs to go and then help set it up in such a way that it
can eventually get there. I have always been pretty good
at what Wayne Gretzky describes as seeing where the puck
is going to be, not where it is. I am less interested in
the minutiae of today than I am with shaping tomorrow.
I am by no means always right but I do not look behind except
to learn. And I move fast. In fact I believe in high speed
of failure; failing much faster than most. As an entrepreneur
you just have to keep moving forward trying things, adjusting
and trying again. Also, I am a firm believer that you will
never get ahead of the curve unless you are out there with
customers. I am the proverbial road warrior. I need to meet
customers, see where they are, hear what needs to change.
I need to meet enough of them to see patterns and anticipate
More importantly though, building a successful
company is not about the one ‘big idea’ it
is about the details, the hundreds of little things that
have to be executed properly. And to execute you need to
surround yourself with good people.
I obsess with building teams of really smart people. I always
want to be the dumbest guy in the room. I always want to
surround myself with people who can challenge me and who
can push the company to new heights. Make no mistake, you
then need to create an environment where these people can
work together, can have fun, be energized and thrive. That
is leadership and management.
If you take a look at the management teams and the boards
of directors of our companies you will see that we have been
blessed to have outstanding people.
What drives you at this stage in your career?
I see life as a series of adventures. I am a commercial
helicopter pilot and I love to fly. I have traveled the world
with my family. Several years ago we moved from Quebec City
to Toronto to enrich our lives and learn different things.
We are now moving back to Quebec City to devote more time
Work does not define me. I do not work weekends. I enjoy
myself. I build businesses because they are fun. I love starting
things from scratch and building them though beyond a certain
point they begin to bore me. I get frustrated by the politics
of larger companies and my attention turns elsewhere.
Building companies intrigues me because I continually learn,
I continually meet new people and I get to work over and
over again with the really outstanding ones.
As a serial entrepreneur do you consider yourself
a classic risk-taker?
As I mentioned earlier, I do like risk but only calculated
risk. I do not gamble. And as I get older I spend a lot more
time understanding, categorizing and trying to manage risk.
It is actually quite intriguing.
All the trending, all the data and yes,
even my gut tells me that Coveo is in the right technological
place at the right time to help solve some major enterprise
problems. That is not risk that is fun.