The lessons from Formula 1 to 22 acquisitions by a Private Equity-backed CTO

In this episode, Alex sits down with Peter Rossi, a UK-based CTO with 25+ years in technology and 15 years in commercial leadership. From running trackside IT at McLaren to leading 22 acquisitions in a PE-backed group, Peter shares hard-earned lessons on growth, integration, and operating under pressure.

⏱️ Timestamps

00:00 – Introduction & career overview
00:28 – Life at McLaren & high-performance environments
01:23 – VC due diligence & scaling tech businesses
02:24 – Building and exiting a SaaS company
03:50 – The biggest PE mistake: rigid M&A planning
07:25 – Lessons from Formula One
10:21 – Why professionalising leadership can slow growth
14:23 – How to double EBITDA in a PE cycle
18:56 – Integration lessons from 22 acquisitions
20:19 – Resources & how to connect

🔑 Key Takeaways

• Plan for ambiguity. You can only acquire what exists in the market.
• Not all revenue is equal. Cutting “non-core” products can damage the core.
• Protect speed. Over-professionalising leadership reduces risk tolerance and slows execution.
• Simplify to scale. Focus on core products and commercial outcomes to grow EBITDA.
• Integration is human. Success comes from winning hearts and minds — not just aligning systems.

Raw Selection partners with Private Equity firms and their portfolio companies to secure exceptional executive talent. We focus on de-risking executive recruitment through meticulous search and selection processes, ensuring top-tier performance and long-term success.

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Transcript

00:00
Welcome back to the Raw Selection Private Equity Podcast. Joining us today is Peter Rossi, a private equity backed chief technology officer.  We're going talk about the journey from McLaren to private equity  and everything that happened in between.  Peter, if you can share a brief insight into you, Yeah, thanks very much.  So I'm Peter Rossi,  based in the UK, just outside of London.

00:28
I'm a technologist by trade over the last 25 years. Although over the last 15, that became a hell of a lot more commercial, I suppose. started my career in Formula One with McLaren, ran trackside IT for them, traveled around the world in a number of interesting environments. It was really good fun. Went to a lot of parties.

00:54
So after that,  moved into sort of consulting, did a lot of work across sort of managed service providers, sort of insurance, finance, banking,  and  then did some public sector related stuff. So around 2008, I was  really keen to get involved in venture capital space, particularly around tech startups, something that I'd always wanted to do.  So  got involved  primarily doing  tech.

01:23
due diligence for  sort of a number of smaller funds, sort of helping them to understand  that, you know, so what it was they're actually investing in, know, was it real or was it, was it a picture on a, on a slide that you'd be amazed some of the stuff that was going on there.  Did that for a number of years  whilst doing that  also, you know, sort of I worked in a VC backed sort of cloud business focused on the public sector, scaled that up.

01:53
I ended up focusing on sort of running the sales team there for the sort of health and life sciences sector and a lot of work in the genetics world, which was good fun. While doing that, also built a little SaaS company in the certification space, particularly around ISO 27001. So it sort of helped businesses achieve and manage ISO 27001. It's a space that I ended up spending a lot of time in, which I really planned on spending in. You know, I don't think anybody...

02:24
And it sort of grows up as a five-year-old thinking that they want to get into ISO certification and think, oh, that's my future. And I ended up accidentally sort of drifting into sort of 10 odd years in that space. Yeah, sold that SaaS business in 2021 into a PE-backed entity. Got to know that team really well. Saw an interesting future with them.

02:51
They were just coming to an end of a cycle.  So help them package that up,  get through due diligence and  sell it on,  took it through exit  and then  went on to acquire.  So, know, we were, it's been an interesting sort of last four years acquiring sort of 22 businesses across four continents and getting those integrated into our, into  the portfolio. But yeah, that's mainly what I've been doing and that's me.

03:21
um So yeah, that loves me.  Perfect. Appreciate the insights. So what's one mistake that you see the private equity firms or portfolio companies making and what would you suggest to correct them? I think it's, you know, the early stages, particularly, you know, sort of the first time a business goes into PE. So it's all about two to 20 million of EBITDA sort of range. oh So the planning is probably too rigid, right? Fundamentally, it's a really ambiguous, ambiguous stage. uh

03:50
You know, don't know exactly what's going to be coming around the corner, what opportunities are available to you what you're to do. The, um, I think, you know, M and A strategy there is, one of the, one of the key ones. Everybody goes out with this sort of very well-defined view of what it is they're actually going to acquire. Um, you know, we're going to acquire businesses that look exactly like us, um, and integrate them in and we'll just take their evict iron. It's all going to be nice and easy. Um, but the reality is, um, you can only acquire what's available in the market.

04:20
And  you go out, you look, you talk to people, opportunities arise.  And then at that point, you then have, you're faced with some interesting  decisions that you need to make around, know, is, is this clean enough for us to acquire? Is it what we actually need?  You know, invariably there's,  you know, a business might do 60, 70, 80 % of what your core business is and, know, what your core clean EBITDA is that you want to pull in.

04:50
Um, the other sort of 10, 20, 30 % of it is, uh, something else. Um, and then again, you might think with regards to your strategy, right, you know, where it's fine, we'll just carve that out, um, and drop it, but invariably you quite often see that those are anchor products. And that's the reason why the other 60, 70 % of eBitDAO exists. So you can't get rid of it. Um, and that's always a, a fun phase. Um, you know, I think it's.

05:18
It is a complicated phase, know, so those early stages when you're sort of growing that business sort of through its first private equity cycle,  you know, understanding what's out there, what you can do from an M &A perspective, what opportunities are available, how you then actually integrate those and the decisions that you need to make afterwards.  Overall,  you know, it's, I think it is just that, you know, sort of the planning phase is maybe, you know,  too rigid.

05:47
You just need to plan a bit more for ambiguity in that as you move forwards.  just diving into that a little bit more, do you think that that sounds like a bit like to me, like it's a bit of a marketing problem at the origination stage, but that's probably too simplistic. Do you think that sits at the origination stage and  that working harder to originate more deals that are more along the great fit? Or do you think that that's the more of the broadening of the playbook to acquire good fits rather than great fits?

06:18
I still think ultimately it still comes down to what's available in the market. It doesn't matter how good your origination is, you've still got to look at what's out there. And very rarely are things going to fit into that exactly how you want them to. You know, it's the same way that, you know, you see it in startups with, you know, sort of talent, talent advisors describing, you know, the perfect CTO or the perfect salesperson. And they, they've been ages writing a job spec and it's like, great.

06:46
You've just defined a unicorn, let's see whether or not you can hire them.  And as it turns out, funny enough, they don't exist. You can only talk to who's in the market and bring them in. It's then about them sort of accepting that and going, right, okay, what was it that I really need? What's really important to me? What things am I willing to accept? What things am I not willing to accept? And how am I going to do that?  You know, again, you see it with, you know,  VC funds setting up saying that they only invest in...

07:13
you know, IP defensible businesses that have got a strong moat and they're going to go on to become a unicorn. It's like, great, brilliant. Like, where are you finding this?

07:25
Before I dive into kind of  meat and drink of the podcast, I'm always intrigued by the, what I'd say kind of world-class company background and how that shapes. And I know it's difficult when you're in that  to go, well, I don't know, because if I didn't have it, then I'd be able to tell you what I'm missing. I wouldn't even be able to tell you that potentially, but what did you take from McLaren that shaped you in the work that you're doing now and the work that you've done before being in, you know, what would be  incredibly high performance?

07:54
type organization. Yeah. Yeah. I think one of the, you know, one of the interesting things about that is that yes, it is, it is incredibly high performance and it, and it's hard work. Um, I think the reality is that, that again, ambiguity, um, is, is key, right? The thing is change and you've got to be able to operate in those environments quickly with precision. So, you know, for example, during a race, you might get rain, for example, or, um, you know, there's a

08:24
Yeah. It's a thunderstorm tornado. There's, um, you know, the connectivity goes down back to, back to base.  Um, you know, what do you do? Um, how do you deal with these problems? It happens all the time. Um, and it's, you know, these can be quite scary, right?  It happens under pressure, right? And it's, you definitely know how you operate under pressure when, you  a service goes down and you've got, you know, the team principal yelling at you over the radio as to why they can't send the car out.

08:53
Um, you got millions of people watching that.  Um, it definitely shapes you.  Um, I think, know, sort of from that perspective though, I've, always found it quite interesting because a lot of the time  there aren't answers, particularly in those sort of environments where there's, you know, you've got to build a solution that  works in a certain way that will also operate in, you know, 50 degrees heat in a garage with, you know, a lot of sand and dust, uh, and people walking past it.

09:22
Those solutions then exist out there, right? So it makes you sort of become, you know, sort of you think a bit more laterally, I suppose. You know, what else can we do? How can we build this? Who can I work with to achieve this goal? You know, it's unlikely to come off the shelf, but how can we achieve this? And I think a lot of that plays into my day to day really. I don't, you know, I see interesting problems. Things are rarely as pressing as some of the stuff that you might've seen track side, but

09:52
It's thinking, okay, what are we actually trying to achieve here? What can we come up with? What's different? Because people probably haven't seen these things before. What can we do to solve them? I think that's probably where it shapes me the most. What's the biggest misconception P Investors have about running portfolio companies? I think I answered that one around the M &A strategy and being too planned.

10:21
Sorry, a mis-stage. Yeah, apologies.  Absolutely right. Which  growth level do you believe most leaders... Okay. So which growth lever pricing, M &A, ops, talent do you believe that most leaders underestimate? Well, interestingly, I think it's how the leadership typically professionalizes over time. m Early doors  with a business is typically founder led  and then over time is it...

10:50
particularly as it moves into PE, you'll have a more professional team come in.  But at the earlier stages, those teams are from people that have either, you know, they've built businesses, they're doers, operators, they've grown  on that. They've gone on that journey themselves and sort  of have quite a high tolerance for,  you know, potential problems or ambiguity. And actually that tolerance  for that, for tolerance for failure, tolerance for problems,

11:20
is really key to enabling a business to grow, particularly if it's tech enabled.  You know, you're sort of threading the eye of the needle a lot of the time around high growth integrations, new products, new territories, new languages, whatever it is that you're trying to achieve  and  grow the business, but with limited budget, obviously, and trade-offs  around that.

11:44
That comes with, with risk, right? Things aren't always going to be perfect, but actually if you can achieve 80, 90 % of it, then great. The, um, what happens or tends to happens as you know, as that leadership team sort of professionalizes further and it goes through various iterations over growth. Those people have never lived that sort of startup, um, uh, sort of phase of a business. Um, you know, they've never been through that and you know, what, where's it going today? Where are we going to pivot it?

12:13
what we got to do to actually achieve the goals here.  You know, like, oh God, this is really not going well.  All of those sorts of things. that, their careers have come from, you know, operating entirely in perfection, in imperfection. They need to, everything needs to work first time. They've built their reputations on things being correct  and  well thought out. The downside of that typically though is, you know, particularly as the rest of the business is growing with it, the

12:43
People then start hedging.  you know, so rather than, you know, you definitely notice this in, um, in the teams,  um, and sort of how they're, you know, sort of the culture changes, you know, they, they sort of go from, yeah, it's great. I've got this idea. Let's go and implement this. I've got this thing that we can do. I've got a great idea for a product. I think we can probably throw together a proof of concept over the next couple of days and yeah, we can demo it.  Um, and then that, you know, sort of, um, fear of not getting it right first time starts to come in.

13:13
Um, and things really start to slow and people really start hedging here and it suddenly goes from, I've got this great idea for proof of concept and being able to do that. And, know, over the course of a couple of days to, uh, give me a couple of months and I'll write a spec. Um, and then they want more and more buy-in from people so that they feel like they've got the air cover before they go and do it. So I think, you know, as that sort of, um, sort of tolerance for failure starts to drop as the team professionalizes, like you sort of the pace of delivery.

13:43
And pace of growth can also start slowing as well. You know, it's a, it's a tricky thing. Um, cause obviously, you know, everybody should be striving for  perfection  or at least getting better or improving. But the reality is,  um, if you get that wrong, it can really, really slow down a business.

14:03
And if you were talking about growth, EBITDA, if you were to double EBITDA or again, a goal to double EBITDA in three years, what would you, what are the things that you would first look at in order to deploy your playbook?

14:23
So, um, yeah, I, you know, I think that over the course of a, of a P cycle, um, you know, there's a whole number of different things that you've got to sort of look at and keep your eye on. Um, the way I tend to sort of think of it or the way I've ended up describing it in the past is around sort of, you know, it's, it's a bit like a TV show, right? It is, uh, you've got, you're in a new series of that TV show. Um, for this P cycle, you've got, um, yeah.

14:50
The pilot episodes come in, you you just launched, you've got, um, you know, new money in the bank, new plans, new acquisitions, characters, stuff that you're going to do, you're going to crack on. It's an interesting plot. Over the course of that series, there's obviously a story arc,  um, that, plays out over the course of the episodes.  Um, and that ultimately is your exit that you're trying to get to at the end of it. So you've always got to keep one eye on, on where that's going and what you're trying to achieve over the course of it. But the reality is.

15:19
There's a number of plot twists along the way, you know, with regards to acquisitions that have come in that you haven't necessarily planned for or new products or services and things that you need to, um, you can deal with. You've got, you know, cameos coming in from, you know, different acquired business owners or new stakeholders or, you know, sort of new senior members of the team coming in, you know, potential network cancellations from, um, you know, the, P firm saying, you know, you're not hitting your numbers or,

15:48
you know, or just in general, you may not just be hanging numbers and things that you need to do to fix that. yeah, I think, yeah, the reality is, um, over that timeframe is that, you know, a lot of stuff happens. Um, how do you actually, you know, what would be my favorite for, you know, increasing EBITDA is I think more doubling EBITDA over that window is that. Simplify really, um, you know, stick to that core product set that you're working on.

16:17
Don't get distracted by it. Keep selling that product. Keep acquiring in that market. Be ruthless about, um, yeah, cutting products that you don't necessarily need that aren't, aren't adding value. Um, and sort of be clear about that upfront.  Um,  what else was this thing?

16:40
And, you know, so technology itself, I always feel is, know, I'm not a technologist for technology's sake.  That drives a lot of technologists nuts. You know, I'm not a particular fan boy about any particular technology or ways of doing things. think there's,  you know, a number of different frameworks and strategies and best practice that you can look at that changes on a week to week basis. The reality is about sort of how you actually use that and deploy it.

17:08
Got to look at  what are the commercial goals of the business? Where are you actually trying to get to? What are you trying to achieve? And then lean into the way that the business is already working.  One of the biggest challenges that I've always seen is less about actually the technology  or how it's built or how it's deployed. It's much more about change management within the user base.

17:33
you know, the staff that are in that business and how they're going to adopt it and how they're going to cope with change, particularly from acquisitions.  Um, you know, it's, it's always a hearts and minds game.  Um,  being a CTO really is  much more about that and communication than it is about technology decisions a lot of the time.  Um, you know, from a tech perspective and, know, whether that's internal  or external, um,

18:00
It's, you know, just sort of leaning into where people already are, what they're doing, how do they work already? What are the customers doing? How they interfacing with your business and just remove as much friction from that as possible. Um, you know, you might come up with a great idea to, you know, replatform or, know, we, we need to move all of our RPF to SAP or Salesforce or Dynamics. Like, okay, great. But you know, reality is, you know, is that actually going to make.

18:30
Is that going to make your customer's buys easier? And is it going to grow your e-bitDA? So you mentioned that the one of the big challenges of the internal communications, you've made acquisitions, you've got to buy the hearts and minds of people of yet another change in a private equity back world common practice. was, um, what was some of the, well, what was, so acquisition number one versus acquisition number 22, what was the difference that you did?

18:56
from a comms perspective that you wish you'd just done on 20 on one, but it took you to 22 or maybe 15, 10, two words. Yeah. I think that's the thing. The playbook for acquisitions and integrations changed a lot over that timeframe. There are so many unknown unknowns as you go into these things. You start off with a plan. You think these are all the bits that we need to know.

19:21
And then you start pulling it through, you work through the project and okay, there's five, six things that we didn't quite capture and we update as we go and try and make sure that we do that. A large part of that is  sort of spending more time  with the teams and the acquired businesses, particularly prior to, you know, sort of switch over of core systems or getting them to work in a way that we want them to work  and ensuring that they're, you know, sort of fully bought into what we're doing and why we're doing it.

19:50
and that they feel supported.  That was the thing that really more than anything else made a big difference. It wasn't about, you know, ETL pipelines and data transformation and, you know, sort of building products and feature sets. It was much more about just spending time with the teams in those businesses to make sure that they were happy and aligned to what it was that we were trying to do. What's, what do you read, watch, listen to, do you recommend others check out, please?

20:19
Yeah, sort of listened to a number of podcasts, particularly around, you know, sort of PE, BC and tech. The other thing is from a reading perspective, I got introduced to Blinkist a few years ago and if you've used it. So, yeah, it's a great way of absorbing books and sort of getting the key points out of them sort of quickly with a view to whether or not you're to go back and.

20:49
and read the whole thing. It's made me incredibly well read, or least appear to be well read. The downside, the downside being is that you can sometimes overdo it because they will summarize a full novel down into a 10, 15 minute audio book that just summarizes the key points. I went out on a dog walk one afternoon and I listened to three books on ancient Greek philosophy.

21:18
And Stephen Hawking's a brief history of time and my brain nearly exploded. Yeah. So that's the only thing you can, there's too much of a good thing sometimes. And if anybody wishes to reach out, how best to get in touch, please. Yeah, sure. So obviously LinkedIn's a good one. my email address is peter at zpventures.com and get hold of me there. But yeah, so feel free.

21:47
and to reach out, connect, say hello. Well, thank you very much for coming on the podcast. All right. Thanks very much, Halets. Thank you for everybody for tuning in yet again to the Privacy Podcast. Till the next time, keep smashing it.