How Pendo CEO Todd Olson grew Pendo to $300M revenue and 13K customers in 2025.

the full story of pendo what he's doing now today please help me welcome to the stage Eric bodok from [Applause] [Music] pendo you almost missed that shot iass the trash shot in the corner he almost Miss left hand was my off hand well we're thrilled you're here because we had your partner in crime Todd I guess two years ago and got a great story from him and I said Todd I got to meet the other half let me meet Eric just kick us off really quick when was the first dollar of Revenue at pendo and then tell me how you and Todd got together first dollar of Revenue I I think it was what 2014 15 15 M uh or there was a little bit at the end of 14 mhm uh very very little and then 15 was really when the revenue started you guys can see the revenue graph here on stage again this goes through 2021 uh I got permission to share this just last night they are now today over $200 million of Revenue so they've more than doubled what this green graph is at which is really incredible um go back to how you and Todd met was it Research Triangle related or how did you guys get together in the beginning we met at College college okay so we we both uh Computer Engineering which really was computer science with chip design as opposed to math uh for me it was like all computer science classes so we met to college and I actually hired him I was doing a startup right out of college it was it was really webbased Consulting you know building websites for people always starts as Consulting he was my first uh hire my first real hire we we had some other uh students doing part-time work with us but yeah the most deluded moment and all of you guys know this the most deluded moment in any software companies's history is what the most delive moment most delive moment I'm gonna let it stay silent until someone says it can I say it you know the answer maybe okay go what is it co-founders co-founders exactly no one talks enough about this usually what happens is people get lazy they want to start they say let's just do 50/50 usually terrible strategy how' you how' you and Todd do it uh the first company I I uh well I had started it and kind of brought him in first as an employee and then we're like he was really a co-founder so we just we we normalized things not quite equalized but normalized I gave up a huge chunk of equity to make him a co-founder y uh because he deserved it can we can we kind of 30 to 40% uh 20 to 40% I I think it was it was 20 to 30% so meaty big hugely meaty and I didn't need to yeah right I mean I kind would have needed to to probably to keep him but um and you were the it was just fair it was the fair you know you want to do the fair thing for for your co-founders and your entrepreneurs and everyone too it was the fair thing to do the matter and it's worked out obviously so were you the only other shareholder at that time or do you have other Angel Investors uh at the time we normalized him I think we had some Angel Investors yeah so maybe he had raised I don't know half a million dollars y y um to Kickstart the the Consulting business um but it was a it was a small amount of money and then we pivoted into product y real quick show hands how many of you guys are on the SE Suite or CEO of a company uh of SAS company and your post Revenue raise your hand post Revenue least a dollar raise your hand High hi hi okay hands down and then this is vulnerability we all start obviously you got to go to Company 2 three four how how many of you are in here pre-revenue co-founder pre-revenue searching for first customer this is good we love this okay this is good so obviously you're in you're in a good room right it's a bunch of it's a bunch of post- Revenue Founders but for those folks looking for their first dollar Revenue this is so cool we have this this is like an artifact this is like a SAS museum look at this it's the first check first customer F CR of Applause for first check at pendo we blacked out the customer name out of respect but do you remember this first check coming in you know I looked at because you added the slide I didn't even I saw it in the deck a couple days ago because I did go back and peek at uh any changes um and I was trying to think of who it is and I'm not entirely sure can I say it yeah site capture or sight sight sightseer sight something sight something okay but you don't okay you don't remember so it must not be a big $2 million year client I was thinking it was show Clicks actually oh it was sorry it was show click oh so I was right you right it was show click so what were they paying for what did you give them for this 5.97 this is how you started wo uh you know I our entry point pricing was $99 a month way back in the day I mean the product was like you know 1% of what we offer today um so what what's what does that work out to it's probably they probably paid for six months not a year that's my guess January 9th 2015 and half do deals like that half room is going what is that thing on the screen that's not a stripe check out that's a check uh for that's a that you were collecting they were mailing checks in 2015 people used to do that evidently the funny thing is like Pittsburgh I mean it's it's it's a great Tech town but it's not known for like a huge number of SAS companies U I happen to live there I was a remote founder for a while they were our biggest market for a period of time and that quickly changed but it was like you know it's just funny how that starts like where you get those first customers um and then righ pass them and then uh you know soon Boston New York and then San Francisco and it all kind of started to look like SAS distribution but Pittsburgh was a big market for us huge and now look I don't want to spend the next n9ine minutes grilling Eric on how he's going to grow from 200 million to 300 million of Revenue because it's inspirational but less relevant for you guys what I did instead is I said hey take us back to that 2017 number because you guys much many of you guys are right around this right 5 to 10 he's at 13.4 million right now and I say show me something that that drove your thinking at that moment in time and this is what you showed me what is this yeah so this is uh marketing results for Q4 of 2017 this is real this is I went back and grabbed a random deck that I still had and and sadly I didn't download a lot of my decks from pendo though they're probably not sad about that uh but I I I grabbed one and I think uh you know looking at this from uh a perspective it it was really interesting to go back and think about how how I talked about our our marketing programs and also the results we got out of it mhm did any of the surprise you mean you called out a couple leads let's talk about the the webinar strategy 1,272 leads from a webinar you did with user voice I think that was one of the ones that drove a lot of it I I got to the point my there was certain advisers and board members that thought I was nuts for still doing webinars because they're like oh they're you know they're not cool anymore you know blah blah blah I don't know what you think but you do you guys know what I think we love webinars and my answer with them is look at my numbers and they're like well they're you know and there's like that's not no no no no I was like when they stop working we'll stop doing them they're really cheap to do you guys see that you see that you see the cost for webinar lead versus the cost for all the other leads you see the $5 versus super crazy uh some of like we would do the user voice one I can't remember the actual numbers but I I remember a few that we did there were well over a thousand leads that cost us next to nothing to run just put in a sense for everyone just to follow again they spent 6,500 bucks to promote this webinar they were expecting in the Pro for a 300 leads you got 1,200 at 5 bucks a lead opportunities converted to 13 and then dollars this is actual converted well pipeline 249 now you see the pipeline was low we were getting a lot of small deals like often webinars would give us the smaller size deals um you know at least at that time so we were getting smaller deals out of the webinars but it was still it was still a good bang for the buck when you look at dollars per opportunity which is probably the better metric to look at anyways you know then it starts to normalize with everything else uh but the number of leads helped us build a great mailing list helped us build community helped us with brand so there was a lot of secondary functions to driving a lot of leads I you know I leads is such a variable function sales qualified marketing qualified what does that even mean you know I always challenge people's like well show me what pipeline comes out of it you know leads is a great early indicator but it doesn't necessarily mean anything um if you have only two leads you know you're not going to get more than two deals yep but if you have a thousand leads it might just be you know in this case you know 13 Ops which isn't horrible did any any these other line items in terms of the the tactics down the left com surprising of you guys you know Live Events website demos are basically na why they were they just not working or uh early on we were doing uh we had cut that program on Q4 so what we did was like specifically demo set marketing it was purely like driving and I think it was I'm trying to remember this actual program we were doing and I called it out just because I pulled it out in this presentation just because I wanted to talk I you know this is a presentation I gave right so um I wanted to talk about what we were doing there and the fact that we cut it um it was just transitioned I think more than anything else to the bdr group and the sales organization that was doing that we had an outbound relationship we were using through a third party to drive demos um and we cut that program that I I think if we looked at Q3 we spent a lot more on it so so just to summarize again that 2017 that was a you just saw the Q4 tactics the actual perform performance so that is him going and pendo going from 13.4 million of AR to more than doubling you over to 28 you're you're I mean the top channels there were let's see the top channels there in terms of pipeline were website nonsocial were webinars and then events in that order uh and that's how that's how the machine was running at the time um actually let's let's just tease quickly we've got about four minutes left what's the machine you left in 2022 minutes left already huh I know we we're rolling go fast what's the what's the machine look like in 2022 right you're at like 100 200 million bucks of Revenue what driving the oh there's a lot of money going into brand sorry brand yeah there's a lot of money going into brand and we started brand early there's great benefits to brand from a standpoint of like it people start identifying you and they're thinking about the problem and and they reach out to you so it drives a lot of inbounds we did bought a conference bought a conference we branded a color that was something we did early pink you know everyone thought of pendo and pink we'd get people going to conferences we weren't even at and they were like oh we saw you at Nathan conference because you know they saw some random dude wearing pink thought it was us like we would literally get inbounds from shows we weren't even at because they saw people at pink that's great talk to us a little bit about where you see the market today so you have now left but you're are you still on the board uh no you're not on the board no longer on the board so get a lot of information but what drove that by the way I mean you were the majority shareholder early on I mean did you do big cash out they that was I mean that was at The Old Company Todd was the majority shareholder here at pendo yeah yeah the one out of college we did I was I see I see I see but co-founders too so there was a there was a heavy split there at pendo did you guys just split a quarter each at the start or something it was a variant of that we had one investor that insisted the CEO needed to own the mo the most we're actually going to do 25 25 25 25 and an investor actually caused it to change a little bit okay people might be wondering why leave you're sitting on a rocket ship just give that story quickly I wanted to do a I wanted to do a venture studio and help people co-create companies from scratch so um you know jumped out to do that and what's that called today 24 and up so 24n up.com yes it is 24 up.com four studio companies so far three have raised external funding so it's been great so combining what you saw at pendo plus what you're seeing in the startups you're working with today you have some philosophies on sort of just growth in general today talk us about this yeah wow I mean in in kind of a minute like the whole world has changed right you saw the numbers we were getting like every dollar we were spending we're getting $32 a pipeline uh I'd be shocked if people are doing that today es especially through things like you can't do that in Google AdWords I don't think anyone can do that in Google AdWords right that Marketplace has just gotten expensive right so that the shift has really changed uh it's it's a lot harder to drive Pipeline and marketing it's a lot harder as probably everyone knows to drive pipeline without bound with bdrs social's taken over right now like doing a lot of like social influencer CEO is the influencer that kind of stuff's working um today and if you're going to do it I would jump on it today because it's some point it probably will stop working just because everyone will be doing it and that's kind of the thing is like how do you stay ahead of things uh how do you do creative things and what we're also seeing is because you know as we all know money is a lot more expensive than it was a couple years ago largely because of interest rates now I think everyone has to approach go to market differently and they have to think of it more as an optimization function like every CEO out there should know where they should take a dollar where best to spend it they should know all their assumptions like you know how much pipeline can I generate for my Enterprise Group through my marketing organization um what I need to hit as far as hiring plans in order to hit my number I think if if you're a a CEO right now hiring a head of sales you want to find someone that is building out a process and a model and building out the math and is getting Buy in from the other parts of the organization about what they need to do like in order to hit my number this is what I need from leads for marketing this is what I need from a hiring plan from Talent acquisition this is how many people I need and he should be explaining to you too exactly what his assumptions are like in order for us to hit our number next year and grow $4 million I need three people they need to come on you know in this time frame I need marketing give me this much pipeline I'm basing this on I'm going to lose one of my salespeople you know which is an attrition rate of whatever like 20% for me like he should understand exactly how that model works it's really important in today's day and age that a cro really has a a tight understanding of model same thing on the marketing guys well I was saying and and and if he fails and screws it up go hire the female cuz she'll fix everything and it'll start work yeah yeah or she that's a good point or right he or she but this is sort of the model you're work you're working through now with a allot of your portfolio companies at the Venture Studio we won't go through every Point people can take a picture of it you just gave a highly L overview talk to about again how you think the winners are going to sort of Rise Above This period in the next C year or two years I I think everyone everyone that's going to do really well is going to be very very capable of understanding scenarios right understanding their assumptions and reacting uh there's a Mike Tyson quote I like these days right everyone has a plan till they're punched in the mouth uh and it's the same thing you build a plan and you're like our guys are going to hit this much quila we're going to generate this much pipeline here's our hiring plan you know here's our average sale price and then the market tells you something different so how quickly can you get that information how quickly can you adapt your plan to the changes is like essential and then my final hot take as as you threw up there uh this came out of some of the early work at pendo is people undervalue product marketing like in product marketing messaging positioning go to market enable M uh ends up being like in deals right there's a limited number of deals and you want to win all of them right and you're not going to win all of them you're going to lose some of your competition but changing that win rate because you're messaging and positioning well against your competition what is that for pendo who's your biggest competitor at pendo it varied from time to time was generally walkme okay so give me the give me the product placement just so they have a real example against walkme how like what is product brand I don't know that it's changed a lot you know the early days you want to you want to go to the last slide actually an interesting one when I was when I was running marketing I think this is from the same deck you know we had a time where we went head-to-head against a particular competitor I think this one was actually walk me uh in fact I'm well anyway he's positive it's walk me the blue bars walk me way yeah uh it was 50/50 one quarter like and we're like and before we had won slightely more now all of a sudden it's 50/50 and we didn't like I mean we're super competitive 5050 sucks it's like a tie and you know baseball sport you don't want to tie you got to win right and so we sat down and and really put a lot of emphasis on product marketing specifically around like how do we differentiate ourselves in ways that are meaningful to our companies our customers um and we put a bunch of time in that in a really succinct period and it was all about in our case marrying analytics and guides right because we're we're losing the walkme because they had some more advanced guide functionality like branching and blah blah blah that they're pushing and so we looked that and said well we can't fix some of the product areas that our customers arguably needed I would say probably didn't but WME was doing a good job selling that but what we can do is is play into our strengths so we started looking at it and saying like WME is got no real analytics combining guidance and analytics is essential because if you're going to show someone a guide in your product right you want to Target it to People based upon their behavior there's no point in showing the guide to everyone because it you know if you don't know who I am and what my behavior is guide's going to be misapplied so we're like there's no way you should Pro provide guides like onboarding guides if you don't understand the analytics and the background and we built this whole story around why that was super important didn't have to call walk me out didn't have to mention any of it but just said that if you're putting in guides for onboarding for learning for technical support for triage of service calls into your app you're going to want analytics you're going to want understand if you're targeting the right Guide to the right person and just that messaging and that positioning and that sales training caused those results right takeway for all of you guys is you should have a kill sheet for every competitor that basically lists down the left side all the different features and then how you win or how you lose and that kill sheet should be in with all your sales reps so they can talk about positioning edit the kill sheet every week and keep making TR with it and and and invest in that because people like you think about it it's was like all of a sudden this maybe is a million dollars of extra Revenue so like just making a change maybe is a million bucks right and you're like oh a million bucks great but then you start thinking about it we were VC driven what was a million bucks if you're doing if you're raising money at 15 times revenue or whatever it was at the time lot of Enterprise Value now all of a sudden it's 15 M like this is like a $15 million change for us right you know so invest in product marketing you know figure out how you can change your win rate make sure that salespeople are trained and it's worth a lot of Enterprise Value we're going to wrap up with two rapid fire questions here real quick pendo has raised a lot of money you are not boost how much has pendo raised total I don't know I think I lost it was a high number it was higher than I could count couple hundred million something like that yeah I think it's was around three what was the last valuation that was public last valuation that was public uh 2.6 I think and what was the last private valuation 2.6 I tried to ask you with a straight face but yeah so it was 2.6 okay what what options like do you do you what do you predict peno's outcome will be are there enough buyers since youve raised it such high valuation or do you have to really IPO it's IPO or bust oh I mean back then I think that when we raised you know I we were at 100 million so you know uh now we're at two you know the who are the private Market buyers that would have enough cash to sort of buy you guys or do you really just have to IPO uh no I I think there's definitely buy for pendo there's definitely opportunities who would be like the top one or two you can look at the big private Equity firms M you know you can look at the big software providers when you were a good chunk of buyers when you were at pendo did did you ever get a term sheet from Vista uh not to my knowledge that we ever get a term sheet okay but interesting why do the verbal calls never get to a term sheet um because you you have to have someone that wants to sell interesting good he's good he's good on his feet guys I mean there's not as much good on my feet I mean I I mean I think if if anyone has met Todd or you know partic Todd's the CEO right it it's his driving he's he's he would love to take it public he wants to you know have another public software company in Raleigh and he's driving to that point and the growth is accelerating and things are great in the business the market the T for product I mean come on the main stay of every company and software is eating the world arguably now ai but AI is just part of software is eating the world the Tam for us is huge right on that note 597 bucks January 1st 2015 the first customer now scaled in 2017 to 13 million bucks you saw his Playbook really using webinars Organic website traffic and inperson events branding the color pink branding kill sheets and product positioning over 100 million bucks of Revenue in 2021 he stayed until about 130 140 of AR in 2022 now doing his own Venture Studio check him out you'll be in the hallway after this I'll be around I'll be in the v VIP lounge I'll be in the hallway I I could talk for an hour like on this stuff there you go guys give it up for Eric bodok at pendo thank you sir [Applause]

Introduction hello everyone my guest today is Todd Olson he is the CEO and co-founder of a company called pendo a product experience platform that helps product managers deliver successful products before pendo Todd served as VP of products at rally software development which he led through its public offering Todd joined rally via its acquisition of six cents a company he founded and served as president and CTO Todd are you ready to take it to the top all right so pendo is on its hair we had you on recently and so we won't focus a bunch on kind of your laundry or growth story but rather kind of where you see this onboarding and onboarding management space kind of going so start off with a quick overview of what pendo does and then let's gonna dive into strategically where you see the space going yep endo is what we call a product experience platform and and what that encompasses is giving teams building software applications rich insights into how their customers are engaging their platform and then also complementing that with the ability to increase engagement through education onboarding and new feature announcements mm-hmm and and just to be clear taught I want people to give you give you and your team credit for what you've built right so you came on the last time I believe it was December 18th when you came on last you'd passed 400 customers at that point you were doing about 1.2 million bucks and Mr had raised about 56 million bucks you got churn below 1% monthly and I think that was logo churn which in my opinion is really impressive for this kind of product because getting someone to actually install like onboarding you're like they're onboarding flow using you I imagine is a difficult thing so let's start there how when someone signs up what are you doing in the first two days to make sure those folks become sticky yeah so you're right the key is The key is getting the product installed actually getting the product installed and it's actually just a really quick JavaScript snippet you cut and paste it into your application and and really that's it now for you know larger customers and bigger enterprises now we do things like making sure we get tied into their Salesforce instance and things like that because we finally integrate into other third-party products that were we are much stickier long-term yeah but just I'm gonna dive deep there because I think you're maybe team for granite how low your Ternes for example hot jar David's same kind of install process it's a quick JavaScript snippet he tested his onboarding so many times he's still at around 4 percent monthly churn in terms of logos like you're doing something unique that is or more of your folks are installing a JavaScript code and seeing value quicker then then you know what hot jar is doing you can't can you point to anything to credit why why you're doing that I mean I think there's also different markets Customer success you know I think we've been pretty focused on b2b companies in there a little broader into websites and b2c so that you know I think you know as we move more and more upmarket to large and larger TVs we're just going to naturally see a lot less churn because you know typically what happens when you move up market you know the large the deal size typically you see lower churn but yeah I mean we invest a lot in our customer success team we we have a pretty reasonable ratio of customer success to sales so we take customer success it's part of our core values and you know we we measure cease at MPs what see Santa like customer satisfaction rating of interactions with support so we carry a 98 99 % see sad we would you know we've gone the last 7 days we having to set a single negative response so and on multiple seven-day periods we average that so across weeks I mean not a single negative interaction across what like sample size like how many tickets is that we can average about a you know just less than 200 tickets a week Wow okay and your team last time we came on you said it 166 is it still about the same size and how many of those folks are so yeah 168 we about 5 in sport ok got it and 5 and say oh and what's your ratio to sales well support and success are part of the broader customer success organization so that had organizations probably two dozen people and you know its sales is about double that mm-hmm interesting so question for you you you obviously with rally via sixth sense and and kind of helped to go public I want to make sure I don't misunderstand your role in helping that come and go public what was your role after the acquisition I was the VP of product okay so fairly significant role then right I mean were you in kind of the executive meetings around again what's happening with product with the roadmap look like all that yeah absolutely for a good portion of my time there I owned the roadmap okay so what are you you are I mean when you think of pendo what do you want to do I mean I would usually say is the goal to I P o and a lot of CEOs are competitive and that's like a it's an ego thing as a checkbox I can't ask you that because you've done it so like what are you most excited about in terms of pendo in terms of what you're building on the next five to ten years well that wasn't a company that I founded so I Acquisition of Intercom mean we did get acquired in so I mean there there is I wouldn't I wouldn't give myself full credit for that check box you know personally so I mean I was part of an amazing team there and I had my played my role yeah I mean look we you know there's a lot of interesting milestones I mean a lot of the way I look at it me I pee over but not IPO I think that the goal is that can you put yourself in position to continue building a bigger bigger business right so I mean I think loosely speaking we talked about category leadership as the ultimate goal me you want to own your category when we see in markets is that the category leader gets the bulk of the revenue in that category and we still we still quite aren't there yet I mean we still have competition it's still pretty aggressive out there so I mean ultimately we want to build a category leader and can you that's the way I think about it can you define the category you see yourself in yeah I think loosely you know we're calling it product experience we think it's kind of this crossover between a mixture of analytics and in-app engagement so it's kind of you know when I started the company we saw these two spaces out there and we said you know I think the ultimate winner is gonna have the union of those two and that's been our thesis since day one that's driven our roadmap it's driven our strategy and I think you're starting to see more signs that that's the way the markets moving so Todd when do you take on intercom directly I think you know coms got a very different focus I think they're trying to revolutionize customer communications next-generation CRM I see them trying to disrupt the support tools like Zendesk and freshdesk more so than tacking pendo so I think there's plenty of room in the market for intercom and pendo to coexist so I don't actually see them as competitive at all do you see as most directly competitive with you right now yeah I think the company we see most frequently in deals the company called walk me they started traditionally in a training space or the United space you know that they're not really known for analytics at all so you know the many ways just half of our product competes against them but but they are the company we see most frequently in deals and when you think about how do you make sure you win deals over them or how do you how do you go after and try and find the distribution channels they're using effectively and try and attack those same channels Margins there's a lot of way to just go do that I mean I think one of the fun things is and we start getting to enterprise buyers Enterprise buyers gonna want to bake you off against one or two vendors so we're actually getting brought into deals or Enterprise buyer is maybe looking at walk me and saying well COO is your you know best alternative so that brings pendo into the fray very very often your margins better can you afford undercut you know I can't speak to our margins III think we do have different go to markets and and we traditionally as a company have been lower in terms of services and implementation you know I think our product we've always strived to be easy to use easy to implement we try to empower our users to use our product rather than do a lot of for us so it is a slightly different go to market but our prices are typically higher so we typically are the premium product in our space and it's because we actually have a broader platform where actually customers are getting more and they can usually replace two or three solutions I mean another example is we have Net Promoter Score capabilities and our product and the other vendors really do and so there there's a whole category of products that just do MPs surveys now they're typically a couple hundred bucks a month but what's you know what's neat is that customers that adopt our MPs solution can then contextualize it looking at other usage analytics that you create campaigns based on it so you know we've always treated having a broad platform as a way to better solve customer problems you are you still out about a three thousand dollar monthly ARPU that's kind of your average deal size yeah around there yeah yeah okay yes I mean so fair again fairly mature you have no award chest when was the last raise it was just coming months ago right July in 2017 and what it was 30 25 25 that cap what I mean do you ever do you ever look at where you're currently spending money to acquire customers ago you know it it might be cheaper to go acquire some of these point solutions like an NPS score solution on board them and upsell that base into our other product lines in other words how do you think about growing the acquisitions versus growing with pay other pay channels we made our first acquisition Mobile Acquisition last last August for mobile and that was very strategic for numerous reasons one we wanted mobile and you know many many companies obviously have both mobile and web-based products we want to make sure that we can provide a complete solution across both we also wanted to flex that muscle and build skills around it so part of doing an acquisition isn't just the acquisition itself but understanding how is it business we can do that so it's gone very well from an integration perspective we're pleased the results what does that mean Todd can you paint a better picture when you say it's going well I mean you look at the performer you put together in the acquisition you say oh you know what it's actually panned out about 80% usually only get 20% in fact there's one our customers Acquisition Success adopting a joint solution the answer is yes you know so we actually have seen good customer uptake of our solution post acquisition we're looking at the Colts from the office the culture is aligned and the answer is yes we actually just flew the entire Israel team to Raleigh last week for our annual kickoff event and people are you in Raleigh I'm in Raleigh his headquarters is in Raleigh the team is in Israel so we flew the entire Israeli office here as a way to help build the culture and it was a great success from the feedback that I've seen so culture is big aspect products I mean the products are coming together you know I think we're starting to unify the architectures and starting to think about the world not in terms of mobile or web what's a combined solution look like I think that's really really powerful so so yeah I think it's been very successful and I mean I've been you know fortunate in my career to be part of many acquisitions and this is probably one of the most successful I've seen personally in my career so so yeah when I look at the market it you know we we will absolutely grow more through acquisition and we look at you know I know and say quit every week I look at a different company but as things come inbound to me we are very aggressive we'll get on the phone with pretty much anyone that's interested because I think I think it was it's it's good discipline III think it's good discipline for myself and my business development team to be looking at deals regularly just see what's out there and understand what would our bizarre but we also do some proactive if there's companies I like we are very proactive you know I'll call the founder I'll sit down with them you know a lot of these things there's a courtship you know I mean you got a course you know date before you get married right so spending time with each other is the time that's how you're supposed to do it right not everyone does it that's how you're supposed to do it so we don't know obviously with the acquisition prices and maybe I'm gonna hope that maybe since you haven't revealed that I can learn something else from you I mean can you share what multiples you pay on that was it like it was I think all parties involved were Retention we're happy and and I think we've put in a good part of the proceeds was for the employees themselves to make sure we had really high retention of the reality at the end of day you know when you're acquiring companies or certainly at that scale like you know 20 30 people that was may work 20 30 yeah 30 people and we tied sorry I don't mean to keep putting off one you said retain customer or retain employees I mean typically what that means is there's some form of earn out over X amount of years so you can make sure you build that mobile muscle into pendo and not just lose them Mobile Muscle all correct correct so yeah a big part of it was making sure that they're heavily and they're they're compensated stay and so yeah it's all built into the deal and you know the other big aspect to it not just to promote from a you know compensation and cash your phone or even stock component it's just making sure you give them interesting work so it's I mean we actually have already started cross trained people on our core products so we have core engineers now in Israel and that's a key way just keep people engaged yep last question here before we wrap up people might not understand what you mean when you say mobile capability is for something like pendo can you give us a use case a customer paying you and they're using the mobile solution as well yeah I approved for logos but yeah I think so I can't think of one in a second but I know let's do an example of one I mean let me make one up so who knows if they're your customer out but let's say a company like DocuSign right they're having troubles when someone downloads the app from the App Store on the mobile device getting people to assign their first document how does your tech plan to that yeah so it's actually really really interesting so before and was only looking at your web-based assets so and I get a DocuSign via my email and on my desk and I click and I go to the web interface maybe I get confused or maybe I use certain aspects of it but now I tend to DocuSign a lot at via mobile so by having coverage on mobile and web DocuSign could look and see where do most of my people engaged when do they what do they use mobile for that they don't use web for what are these web for they don't use mobile for so you can actually optimize the experience across both maybe there's some more advanced capabilities that are only in the web-based interface that I didn't know that they mean they want to message me in their mobile when I come into mobile and go to click the buttons I'm gonna say hey we noticed you typically use this try this on our web-based interface when you get down to your desk so it's this ability to look across the entire customer journey within your products and better optimize the experience because what we're seeing is people now consume software with more than two devices you know your withdrew with a mobile phone there in your desk maybe it's your iPad so making sure they know who uses what when and then can get to using the you know which interface for the write write use cases really well how we see our vision and we do you think it's really really exciting do you break 30 million in air or this year by they new this year which I mean it's aggressive but I mean that would put you doubling from your 14 today I know comment is the aunt of the official answer but we'll see how it goes we're actually very bullish on this year we have a lot of good things and we couldn't be more excited guys there you have it from Todd Todd let's wrap up here with the famous five number one what's the last book you read I'm reading turn the ship around it's by a Navy submarine commander it's awesome number two is what is who is your favorite big thinker in Raleigh to get dinner lunch or coffee with oh in Raleigh you know I'll go with Jess Lipson he's a former CEO of ShareFile Sharon Citrix yeah yep number three what is your besides your on with your favorite online tool for building the business FLAC number four how many hours of sleep are you getting every night six sex okay and situation married single you have kids married with kids okay and how old are you Todd I am 42 years old I last question what he was your 20 year old self new how much fun I'd be having at 40 doing the same thing so what would I do there gets out from Todd love and what he's doing at 40 just wishes he knew earlier that it would always be fun he's having a blast company's growing fast over 400 customers are over 14 million ARR again helping folks with their mobile or obviously started desktop and online onboarding but now obviously mobile with the acquisition back in August that Israeli integration and that muscle of mobile is now really built in you know and they're seeing great uptake from their historical customer base using the new products hoping to drive additional growth obviously this year on a good track right now Todd thank you for taking us to the top thanks I appreciate it

this is the top where I interview entrepreneurs who are number one or number two in their industry in terms of Revenue or customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have I'm now at $20,000 per to 5 and6 million he is held bent on global domination we just broke our 100,000 unit sold Mark and I'm your host Nathan lka okay toop dribe this week's winner of The 100 doll is Rich Jones Okay Rich Jones he is stuck in corporate he wants to break free he's binging on the show for your chance to win 100 bucks every Monday morning simply subscribe to the podcast right now on iTunes and then text the word Nathan to 33444 to prove that you did it top tribe you know I don't have a lot of time to waste that's why I use fresh books to send out invoices and make sure I'm collecting my money to get your free month go to Nathan l.com for slf freshbooks and enter the top in the how did You Hear About Us section Nathan L here this episode 614 and coming up tomorrow morning you're going to learn from Shin sakan he's a father of 3 and 36 years old they raised $75 million and he's about to launch a $155,000 machine that folds your laundry they did over $35 million in 2016 Revenue with their bestselling item a $120,000 carbon fiber golf club it's unbelievable they do laundry golf clubs nasal sprays he's a genius his company's called seven dreamers they're based in Tokyo you don't want to miss that episode tomorrow good morning everybody my name is Nathan lkin Our Guest today is Ted Olen he's the CEO and co-founder of a company called pendo a product experience platform that helps product managers deliver successful products now before pendo Todd served as VP of products at rally software development which he led through its public offering Todd joined rally via its acquisition of 6 cents the company he founded and served as president and CTO Todd are you ready to take us to the top sounds good all right you're like what do you mean take us to the top I'm lost all right good so tell us first what does pendo do and and how do you generate Revenue what's your business model uh we provide a solution to help companies building applications improve the experience very specifically we help them gather intelligence on how people are using their product and then provide them the ability to message their users in app to um help educate their users on what's there and get them to Value faster and is this your you you keeping using the word app or is this just for mobile apps no no no uh primarily web applications but um uh I just mean software Solutions software products things like that okay and uh help people can you maybe tell a specific story of a customer that's currently using you and how they're using you sure sure I think a good example of someone who using a company people have heard of is optimizely um optimizely uses us to one understand people who are in their um trial flow and onboarding flow to help get up and running start creating experiments um their team can get insights in where people what people are doing and not doing but also help guide people towards getting up and running faster yep okay great and what is the I mean should PE I think people I mean should people think about intercom is this are you kind of in the same space as intercom little different a little different I think um intercoms focus is more around being a Next Generation communication platform think of our Ina messaging more like campaigns like let's launch a campaign to do guided tour when you log in so onboarding new feature announcements those sorts of things are really more in our wheelhouse got it great and let's go back uh well actually and tell us how you make money is a SAS company it is yeah subscription yeah it's like everyone's a SAS company these days everybody wants that predictable Revenue right it helps right it's better than nonpredictable Revenue Todd I like that answer that's good so take us back uh more let now that we kind of know what the business does fill in the blanks in terms of the story what what year did you launch the company in launch the company in 2013 I just wrapped up a tour of Duty so to speak at rally software um I was with as you heard from my buyo rally software from the time they acquired my company in uh late 2008 early 2009 uh through 2013 where we successfully had an IPO after that what was that company again Todd the IPO the one that ipoed rally r l rally software okay yep and um took some time off and started thinking what I want to do next and I was the VP a product at rally and one of my main pain points was around understanding how people use our product what features are using and not using and frankly getting people to use various aspects of our product so we experimented with a lot of the technologies that pendo now automates for everyone yeah these are like these are like as a product person you know a user has to do X Y and Z in the first 10 minutes to increase their lifetime value by 5x something like that exactly every product has a key set of features that you know people get to the fast they're more likely to well either convert to a paying customer and or stay a happy customer and ultimately renew and generate a ton of Lifetime bu it exactly yep that makes that makes great sense now I understand the connection to Rally you mentioned six cense though as well what was your role there were were you one of the founders I found it six cents and then we sold six cents to Rally got it got it got it so six cents even though on its website right now it still Standalone it's actually owned by rally rally is now public actually a different company than that company it was six 6th s okay that's why I was confused that's now provides Rally's reporting engine essentially got it not not the URL the number six sense.com you got it okay got it my fault there all right so you launched the company uh tell talk to me more about uh kind of the first few years so I always ask this question it's usually embarrassing do you remember what your first year Revenue was like like the first year we're in business at pendo yeah zero I can remember it easily you just remember spending a bunch of money to build the thing right yeah absolutely so super super simple it's a zero year one zero year two and then we started making some the next so and then that number was a lot larger than zero that's good what did you for people listening right now thinking about jumping in and kind of doing their own thing help them understand the kind of The Upfront risk you took so how much did you invest into building this thing before you saw your first dollar in Revenue we invested a couple million dollars in well not quite a couple million I'd say a million like $1.25 million we invested into the business to start generating Revenue somewhere in that range and who's we the founders yeah I mean we raised some seed Capital as well so you we have seed investors um they're great we we've you know was your seed round we did we did about a million dollar seed oh you know if you're talking about personal investment yeah I mean I was part of that seed round as well okay we took we took an initial million dollar seed round um and of course there's always the sweat right you know you don't make you know the same salaries you're working at a publicly traded company at a startup right so everyone's sacrificing a bit yep that and that was uh I guess that was 2013 so convertible notes I don't know if they were sexy back then was that a convertible note or was that a price it was it was a convertible note it was a million dollar convertible note in 2013 that's rare it was you know we closed it on December 24th you know and everyone told me that no one closes deals between Thanksgiving and New Year but yet we did there's no better forcing function in deals like this than Christmas no one wants to be thinking about this on Christmas morning right I don't think so but um but yeah I agree with you yeah very cool so you put in a million and then F you found it obviously back in 2013 fast forward to today how much total have you raised 31 million and I usually hate that question because that talks nothing in terms of you know you know profitability or things like that but you raised 31 million what's your team size at to date 76 people oh they're the Research Triangle all but two oh wow okay good so all but two um and then okay good and then walk us through so you mentioned uh you mentioned some of the companies currently uh using you guys and I know I think based on my research I've gotten in front of me you have other companies like inaka and and Tren kite and Acton companies like this as well right you got it are those are these your kind of your average customers or are these part of your you know top tier cohort or bottom tier cohort Etc all of our customers are top tier so yeah I don't like average not average right so all let me Reas that question in a way that'll allow you to uh answer uh kind of what I was getting at a lot of uh companies when they look at their customers they'll split them into different cohorts based off team sizes or things like that so these specific customers are the are these representative of your entire customer base they're good those are good folks that are kind of some of our medium customers I think in terms of size I mean we also have companies like on our website we have in listed that's a billion doll software companies so you know they're in the larger tier of of customers so and then I don't want to get into like I guess specific different cohorts and and different pricing plans and all that stuff but in General on average what's the customer paying you per month average uh amount customers paying us per month is over $2,000 a month okay so I mean you would say midmarket to Enterprise then right yeah yeah I'd say so I think you know it depends on your definition of enterprise I mean we talked to a sales rep from Oracle and ask him Enterprise deal will typically be in the millions yeah um but so we're not in the millions I'm just putting it out there but you know we're we're we do have some larger customers yeah and and uh coach us up real quick for people listening right now who have SAS companies that are maybe much smaller than where you're at but they're looking to drive expansion Revenue what are some of the triggers you're pulling to drive expansion Revenue yeah so we typically land um on a single product and we expand when they um put us on another other products so take a company like an in for you know we may start with a couple products then then the product manag with products we go to their peers and say hey check this out we really like it and then we put on another couple products and another couple products and that that's been our primary way in which we expand is is is is adding additional products to the same plan that's how you're increasing prices over time yes correct I mean we also have tiered pricing based on features um but that's less common I would say than just new products well I see I always ask this question because I see two patterns some people are great at driving expansion Revenue based off things like team size and others are just killing driving upsell Revenue by additional additional products selling into the same base it sounds like your main driver are additional product lines into the same base versus seed expansion exactly I mean early on we were selling to product managers and we knew that there were some companies had very few product managers some of a lot of product managers so seat pricing just didn't make sense for us yeah um because you know we don't want to be predicated on whether a company has a lot of product managers or not so um I mean at the end of the day your pricing should align with a value deliver and we know that if we add another product we're adding more value because we're helping that product right so um you know seat pricing the other thing you gotta be think you know thinking about is whether people share seats and are proving incentives for that so I mean the end of the day a product's a product and and we also charge based on the number of monthly active users one of our customers have so sometimes we get organic upsale just on based that you know let's say we're working with a customer and they've doubled their doubled their user base I mean I'm not going to say that doubles the pendo cost but price will probably go up but you know the way I look at it is if we're doing our job and we're helping you create great features and we're making the experience better then your number of users should go up and you know we should share in that success right you know we're all aled on the same thing making making each other grow and it's q1 here in 2017 how many current customers are you working with um it we working with a little over 200 okay 200 got it and these uh as you kind of expand and continue into 2017 is there specific kind of uh target market you're going at in terms of uh kinds of product lines that people are serving or kinds of product managers or is this really totally open any kind of product online any sort of software product you know online yeah any web based software product we can sell to yep great and then take us through some of the other kind of important things in a SAS business so so so churn has anyone left you guys of course I don't think you have a company someone hasn't left you no uh uh generally speaking you know I think when you start a company you sign a few customers they're not always the best customers uh I mean churn as a percentage as a percentage of overall revenu is very very small under 5% so okay and that that's annually or monthly that is annually yeah annually okay so are you guys um something you're focused on is is this important to you to getting to net negative Revenue turn with expansion or is that not something you guys are focused on we have net negative you are our net oh absolutely yeah yeah our net yeah our net our net numbers are in the 140 range so north of 130 explain that Todd for for people that don't know don't understand net negative what that means is you're looking at net um retention what you're doing is you're you're accounting for the expansion and the churn the same number so that that means is we're growing our you know I like the bucket metaphor let's a bucket which is existing Revenue it's growing at 30% um yeah I think it's a quarterly number um even if you account for the stuff that's leaking at the bottom yep so just organically it's growing by 30% which is pretty good you said 140 now retention or 130 I I said over 130 and 140 I I was probably boun when it is over 140 I I I was I was I want to tie it back just to make sure folks get that lesson it's an important one you're basically even if even if the bucket's leaking it's still growing by by you know you know 130% year-over-year or quarter over quarter whatever it is yep you got it awesome good stuff and then can uh what about acquisition cost are you spending a lot of money on paid acquisition or no I mean we have a sales team so by definition we are spending money on it so I mean I think our our CA LTV ratios are are healthy right now I mean when you're looking at that you got to be careful looking at the numbers too early in the business but our our CAC payback is right around 12 months so okay right around 12 months and at a $2,000 rpu what so you're willing to spend up to about 24 Grand on acquisition yep yeah awesome very cool and uh where are you guys you're all you said you're all based in uh down there in Raleigh any expansion plans West Coast Europe anything like that we're looking at it I mean there there's no question that we having a presence in the west coast would be beneficial um so we're evaluating it now awesome good stuff and then can I do the math can I take 200 customers times an ARP of about two two grand to assume you're doing somewhere around half a million bucks in mrr um you can do whatever math you want man so I'm not telling you what do so I'm not gonna quote Revenue live or publicly or comment on it but you know you're welcome to do the math you want to do got it uh I I I want it the reason that's important I think is because it helps folks understand if they should be thinking about net revenue if they're around your size or if they shouldn't be thinking about net revenue or if they should be using your product based off arpu or shouldn't be using the product based off arpu so I I appreciate being transparent man okay top tribe as many of you know I sold hoo and Everyone is always ask me what my expenses were when I was building hoo well a big expense was that I spent over three grand per month on financial services to keep me out of trouble in terms of taxes you know my mom would always haror me Nathan you got got to keep all your receipts and put them in a freaking box or something to make sure you don't get an audit or things like this I'm like Mom I'm a millennial you think I'm going to keep all these receipts I now use fresh books I use their mobile app to take a picture of receipts and it makes taxes a cinch additionally I don't have to hire a $3,000 per month person to manage all my finances it's like saving so much money and my mom's happy additionally I don't waste a bunch of time creating invoices I use their templates and I can avoid using word templates or Excel files I just use fresh books to quickly send out invoices and it works like a charm to get your free first month go to Nathan l.com freshbooks and enter the top in the how did You Hear About Us section again go to Nathan l.com slf freshbooks and enter the top in the how did You Hear About Us section great let's hey Todd let's wrap up here with the famous five these are super easy questions compared to the other ones I've thrown at you so number one what's your favorite Business book good to great he you're a Jim conin fan huh yeah Big Jim con fan love all right number two is there a CEO you're following or studying right now Aaron LY number three is there F besides your own is there a favorite online tool you have like HostGator not HostGator I don't know that one uh favorite online tool I've been playing around with 155 love it what do they do they do um Performance Management con reporting things like that all right good number four yes or no do you get eight hours of sleep every night no of course not good answer I just your voice inclination is great on that all right so no on the eight hours of sleep and what's your situation Todd married single you have kids uh married with a bunch of kids you know I ask that all the time because I get parents always go Nathan we can't start our own company because we have kids and we have no time so it's helpful when people understand other people are doing it with kids I have a seven week old a 20-year-old 9y old seven we old right now now yep you got it man you're an animal all right so married four kids and how old are you Todd 41 all right last question take us back 21 years what do you wish your 20-year-old self knew um you know I wish I knew that I I knew more at 21 than I thought I knew wait say that again you would have I'm very confused I think I lacked confidence at 21 cuz I didn't realized that I actually knew more than than you know I actually was pretty decent at 21 so wish I knew that at 21 do tribe there you have it from Todd allson he wishes he was more confident at 21 more confident in what he was doing and and uh what he was focused on again he was leading product at rally software before he was founder of six sense which went into rally software rally software then went public one of the things Todd learned at rally was there were some key things that you had to get folks to do in the product to make them sticky he realized this was a big problem 2013 launched pendo to help solve this problem now serving over 200 customers with an average arpo a monthly of around 2,000 bucks 76 People based in mostly in Raleigh again focused on solving this problem for people again 31 million bucks race Todd thank you for taking us to the top thank you D if you enjoyed Todd today go back and listen to sahil Aurora yesterday he started his company when he was 16 years old and now he's 18 doing 7 18K and monthly recurring Revenue helping you put your ads inside of taxis in India he's doing this via a major partnership with Uber top drive I love giving away free money I feel like o we giving away cars and I have something special for you today how many of you have heard our super sharp guests talk about success they've had with Facebook and Google ads well all of you listening right now yes if you're listening you get $100 in free AdWords here's how you get it okay again thanks for listening get the free $100 from Google right when you sign up with my website host provider HostGator go sign up now to get your free money hostgator.com Nathan again that's hostgator.com Nathan okay top tribe I'll see you bright and early tomorrow morning and don't forget before you listen to any other episodes subscribe on iTunes right now for your chance to win 100 bucks every Monday [Music]