If the local search industry had its version of Shark Tank, Joe Walsh would be Mark Cuban.
I recently had the opportunity to chat with Joe, the chairman and CEO of Thryv. Joe is also a longtime local search industry entrepreneur and leader who has seen it all in an industry that has been through many ups, downs, and pivots. And Joe has led organizations through all of it.
Joe started his first business early with his brother – a home improvement company. He launched his first print directory company back in the 80s. Today he remains in the directory business at Thryv. But Joe has long known that Thryv’s future lies in software, not directories.
Thrvy emerged from the legacy Yellow Pages company Dex Media. The Dex-Thryv rebranding happened in 2019 after Thryv existed for a time as a product (originally called DexHub) under the Dex banner. The transition from Dex to Thryv reflects the company’s transition from a legacy Yellow Pages company into a SaaS company offering SMBs an all-in-one business management solution.
The Shift to the Cloud
This transition came out of an insight Joe had. He saw large enterprises moving operations into the cloud. He felt it was inevitable that small businesses would follow enterprise into the cloud. And the SaaS business model was what would enable this to happen.
“I said, I think the opportunity is to assist our hundreds of thousands of small-business customers with the transition from analog to digital,” Joe recalls. “And these cloud tools are going to be very light and available on devices that they already own. And they’re going to be able to make this transition and they’re going to need a hand, they’re going to need some help doing it.”
En Route to $1 Billion
Thryv now positions itself, not unfairly, as a SaaS company. Even though the majority of its revenue can still be traced back to its Yellow roots, Thrvy is on a mission to become a majority SaaS revenue company. It will eventually get there. It just hasn’t yet. And it may not get there as fast as Joe would like.
In 2022, Thryv projected it would hit $1 billion in SaaS revenue by 2027.
In 2023, Thryv reported $263.7 million in SaaS revenue, with a 21.9% growth rate over 2022.
This leaves Thryv with about three years to nearly quadruple its SaaS revenue. At its current pace, Thryv will have about $600 million in SaaS revenue by the end of 2027. While this would be a substantial business, it is well short of the $1 billion marker.
Yet even if Thryv falls short of its goal, it will be much closer to hitting that milestone than it would have been if it hadn’t set such an ambitious goal. This is a leadership lesson of its own. Make no small plans.
Green Milk
Another lesson is that Joe chose to pivot to a new SaaS business without killing the legacy print business, which remains a cash-generative business in steep, terminal decline. Others trying to pivot away from Yellow Pages did kill their core businesses. Joe acknowledged that this path has worked for some, but it did not guarantee future success.
Joe instead chose to grow and nurture his SaaS revenue while managing the decline in print. It is not a choice that has always earned him praise, but it is consistent with his track record. Joe doesn’t believe in killing cash cows while they’re still producing green milk.
The directory to SaaS pivot represents just one of the many significant pivots Joe has had to lead organizations through during his career. And we talked about the pivot process in a recent conversation.
Making the dramatic transition from directory to SaaS meant Joe had to persuade some skeptical constituencies.
These included Thryv’s board of directors and the company’s large sales organization. Not everyone fell in line. And this is something to be expected. And in some cases, it was a welcome outcome.
Uncomfortable Conversations
Joe recounted how uncomfortable some of these initial conversations were.
For example, when he pitched the idea to his board, one of the directors, media executive Tom Rogers, whom Joe describes as “intimidating” was initially skeptical.
“I presented this idea. And I got a couple of positive reactions from a couple of other board members,” Joe recalls. “And [Rogers] raised his hand, and he said, ‘Are you saying that our thick-fingered unionized salesforce is going to sell cloud software?’”
Joe says he stood his ground.
“I said, ‘Well, it doesn’t sound as good when you say it. But that’s precisely what I’m saying’,” Joe recalls.
Then there was the salesforce. Joe presented the SaaS plan to Dex Media’s employees in a gathering in the company’s auditorium. We asked Joe how the sales force in particular responded to the pitch.
“It was split. A lot of them got really excited about the idea of that vision and of their careers being extended. And that we’re going to move beyond leads,” Joe recalls. “And some called human resources and said, ‘Give me my package. I’m out’.”
Joe acknowledged the latter reaction probably served the organization well.
“It worked out okay,” Joe recalled. “We needed to streamline the company. And they actually made it possible for us to hire some tech talent to help us begin to make the transition.”
The Mother of all Pivots
Thryv is in another pivot. And it’s the same one every organization is going through. How will AI transform organizations, the lives of their employees, and the industries they exist in?
Joe doesn’t claim to have all the answers. No one does right now.
But he does have an approach. And it’s the same approach he has always had. Do not react in a panic. But do not bury your head in the sand either.
“We embraced AI from the jump,” Joe said. “We got subscriptions the minute they were available and put them in the hands of our team members company-wide, and said, ‘Tell us how you can use it to do your job better’.”
