The $100m Pendo Story

Please help me in welcoming Todd Olson to the stage, the CEO and Founder of Pendo.

Thank you. Thank you. Good morning, everyone. How's everyone doing? Great. So I'm going to talk about some of the unscalable things we did. And throughout any journey, you're going to get told, hey, that doesn't scale. Why are you doing that? And it's breaking through and knowing when to do that that I think was a big part of our success. Because sometimes you have to do just crazy unscalable things to actually hit another milestone. I'm going start

with a story. It's not actually about travelling but, look early days you build a product and conventional wisdom from other founders and board members like go hire a salesperson to go sell it. But I realized if I hired a salesperson that it was actually going to separate me from the feedback loops of working directly with customers. And while I am an engineer by training, honestly never carried a bag in my life, I decided that I had

to overcome that inexperience and maybe a little bit of fear and go out there and pound the pavement myself and try to get those first few customers. So I went to Dreamforce. Everyone's heard of Dreamforce Salesforce's big conference. Fun fact, you can get a free free, no dollars, Expo Pass where you can just walk the so I and that's what I did. I didn't we didn't have money to pay for a Dreamforce Pass. That was insane.

We didn't have Salesforce at the time. So I walked the expo floor asking for business cards, asking for leads. I spent the entire day doing it. I got a bunch of leads. I called. I got a great opportunity at this unicorn SaaS company, you know, aspirational logo like nothing we'd ever closed before and we had just started selling. The product company was about a year old and we're going through this deal cycle, we're going through a

trial, they love the product. It's the last week of the quarter, I was talking to the person who I thought was the signer and on a Monday he tells me, oh I've got to go talk to my boss, the head of product, and I was like, oh shit, this guy has no power. He cannot sign this. And my quarter ends on Friday and I told my board that I'm going to sell myself so I start coming

in and missing, I'm going to look like an idiot that I decided to go this certain path. So I was like, I plan on being on Salt Lake at the end of the week. Can we get a meeting with your boss? Mind you, I definitely was not planning on being on Salt Lake at the end of the week. So But he says, well let me check schedules and he's really, really busy. So finally, on Thursday he's

like, yeah, tomorrow morning my boss is available if you're still here assuming I'm already in town because it is the end of the week. I immediately drive home, book a flight, pack a bag, arrive in Salt Lake at about midnight, do a call at a meeting face to face at nine a. M. And his issue was, hey I love Pendo, I want to buy it. Who's going to actually implement it? Like who's your onboarding team and

your customer success team? Mind you folks we were four people. There was no onboarding team, professional services team. And I was like, oh yeah, we got you covered. We got a team, they'll come in, it's like, can you get someone here Monday? I was like, look, if you sign today, on my way back to the airport, I will have a human in seat Monday Monday. So Friday, get back in an Uber. I am editing in the

Uber this contract. It has a commitment to have a human being there. I immediately call the office in Raleigh and I'm like, what engineer wants to take a trip on Sunday night to get to Salt Lake City by Monday and we had an engineer who frankly just had a baby and was like looking for some nights of sleep. So he's like I'll go I'll go. So one of our best engineers got on a plane. I sent

the contract in DocuSign from an Uber. I signed it it was signed in line while I was boarding my flight. It was a 60 k deal ARR when our largest deal previous was about $1,500 ARR. So so it gives you a sense that sometimes you have to do crazy things. And if I hadn't been willing to, like, just put myself out there, I will be there this week, we would have never closed that deal. And that

was the first of many deals like that that just set this motion that we're gonna do whatever it takes to win. And look, the reality is it's paid off. Well, sorry, I have two slides here. So you're going have to do unscalable things at every stage. Even today, I do things that are like, I can't believe I'm doing this. We're nearly a thousand people. So we are about a thousand nearly a thousand employees and there's still

things I do today. Everyone's like, why are you spending your time doing it? It's like, one, I like doing it. And two, it it helps me be more effective and helps us hit our goals. And we have grown very rapidly. I am not a bootstrap business, so I hope that doesn't disappoint anyone in the room. But we've announced that we crossed $100,000,000 near our last year we're growing north of 50%, so you can get a sense

of where we are. It's about a year later from that. We'll probably end the year just under 200,000,000 ARR. So and we've gone from basically zero to that in under eight years. And, still honestly our best days are far ahead of us. So look, I'm going talk about two areas because to talk about three would not fit within forty minutes. I'm gonna give you a bonus story at the end about my third. These are the three

things I care about. Customer, people, and the thing not listed is product. I believe that the critical thing for any company and certainly any startup is you gotta obsess over customers, your people, that's your employees of course, and then your product. And so that my extra story, my bonus story is going be about product. That is my background and specialty, so I I I obsess over that a good part of my time. But when we talk

about unscalable customer things, because the things we do today are of course not the things we did in the very, very beginning. The things we did in the beginning was assess about a human. This is Amy from Evoke, actually she's not in Evoke anymore, this was like many, many years ago. Believe for a while we had one user in our product, one. And we looked at everything this user did. What she did, what she didn't do,

we would follow-up with qualitative research to understand why she did certain things. One day we show up at the office like holy crap she used this part of our product like 20 times more than we had anticipated anyone would ever use this. So we call up and we realize oh this is not good design. She's probably misusing the product because we made it unnaturally difficult to do this certain action. And the cool thing is we hadn't

even conceived of someone using our product in this way. So this is the value of doing unscalable things is by going direct to the user, direct to the customer, you derive all sorts of learnings that inform new feature developments. We actually end of lifed the thing that she was using and developed a whole new feature area that benefited every customer and kind of reinvented certain use cases around our product. But we wouldn't have done it if

we weren't going really, really deep and doing unscalable things. That's led to Nathan likes having checks in Deck, so we have his check. But I think part of the reason we did this is we treated every customer in those early days as the most important customer. So we hung checks from the wall, we hung every logo from the wall, we were in co working space, it got to the point where we ran out of wall space.

And then we move into offices and my my they were like, where the hell do we put all these customer logos? And like, I have no idea. We have people trying to go to craft stores. So like, eventually we stopped putting customer logos, like all of them on the wall. We we do have some now on the wall, but it frankly did not get scalable over time. But I think it's this attitude that every single customer

mattered. And then, of course, they still matter, we just can't put them on the wall. Also a fun fact, we used to do a shot for every customer. Quinn, that's not good for your liver, So we don't do that anymore. It was certainly fun in the early days, but now when I mean, yesterday was our end of month, you know, I I wouldn't have been able walk after the after like 10AM. So, which is a good

problem to have but something you certainly want to reevaluate. The other thing you do is when you're small and you're early, everyone's in customer support. Everyone. Like you, like your CTO, whoever, like there is no no one's too important for customer support. If someone has an issue, get on that issue and solve it. And, oh, by the way, if you find yourself like trading emails with a customer, like pick up the phone. Pick up the phone.

In the early days of the company I picked up the phone every single time a customer emailed me. Every time. I managed Zendesk Q myself amongst other things. If I saw someone doing something I jumped on the phone I resolved it. And that set the culture that we just don't let customers fail silently and tend to send four emails back and forth replicating their solution, sending me screenshots. That is incredible waste and inefficient. And that kind

of maniacal customer success ended up evolving to one of our core values and is now part of our culture where, you know and look, I'll admit, it's much harder at our size and scale now to provide that level of support, but that is what we aspire to, to have that same level of support when we were tiny, when I was personally doing it. Folks, I still am in the Zendesk queue and actually even this morning, I

was communicating with my VP of support. We're like looking at doing a a sprint to burn down our backlog, and I volunteered to go into the tickets and burn down the backlog with our support team. I haven't done that in a while, so it's honestly a little scary, but I will probably learn something if I go spend four or five hours just obsessing over why are people sending messages to support and why do we have so

many tickets. I'll probably learn something that will benefit the company in many, many other ways. And this led to our funding. Our

first round, no one had heard of us. We were in Raleigh, North Carolina. It wasn't the hotbed of, you know, the time unicorn startups. And we heard about us because an investor, Battery, was here in Austin and they were meeting with a local company and the CEO they asked the CEO, who's an interesting company that you use? And then this Pendo thing is like pretty good and they got great support and, you know, I like the

people. Sure enough, they reached out and that led to this financing, which really sort of broke us away and started driving a lot of our growth. The other things we've done since the very early days is obsess over Net Promoter Score, and some of you may have different opinions about this. And what you notice here is I'm not sharing like a number, I'm not showing you a trend, I am literally showing you an individual response. This

morning when I woke up, I read every single NPS response we got this morning from the last time I looked, which is last night when I got off the plane and got to the hotel. So, thankfully, most of them were nines and tens. But I tell you, if there's a six, there's a thread below that six on every single one. So this isn't something and then everyone's like well how do you scale every single one? And

folks we get thousands of these. It's because it matters. A customer took the time to write two paragraphs, we can take the time to do something about it. Because not every customer will write two paragraphs, some will give us a nine or a 10 and just, you know, we'll of course celebrate some of those small wins. But in general, if someone who says this, they're getting a follow-up, they're getting a call, hell, I may get on

the phone call. Depending on who the customer is, what it is. I was just talking with someone. One of my favorite things is actually using our product in the wild, using a product that uses our product. I know too matrix y for folks or whatever. But the reality is I was using a product with my daughter and I saw Pendo on it, the next day that product gave us an NPS response that was lower than I

liked. It wasn't thankfully a six, But I immediately reached out to the user myself, said, hey, I saw this. I would I just used your product yesterday with my daughter. I would love to jump on the phone and talk about how we can make your experience a little bit better with Pendo. Like I think she was shocked that I reached out to her. But that surprise goes a long way to build that loyalty and sentiment. I

mean now at our scale, I mean, yeah, with almost 3,000 customers and almost 1,000 people we do things very, very differently. But I mean, another fun story. I was talking to our head of EMEA customer success and he was talking about he's in Israel. He, was a search and rescue coordinator for the Israeli defense and he was saying, like, I want a cockpit to come in, but there were too many things that were missing in Salesforce

or operational issues. You know what he did? He did an unscalable thing. He created his own spreadsheet, in Google Sheets. He created his own APIs to pull data in. He created his own dashboard when a dashboard wasn't there. He didn't wait for us to buy a system, eval or spend six months thinking about it. He did things himself. And every once in a while, like, the connections weren't right. He said, Todd, you know, I did some

automation. It got like 90% of the accounts. You know, I did the rest by hand. It was manual. Manual today today with all the, you know, trust me folks, have plenty of money to buy things and do things. But at the end of the day, if you're trying to get something done, sometimes the right answer is do something scalable. We will fix it later and make it more repeatable, but he was blocked. He was blocked on

managing his business and he needed to manage his business. And that's how you need to think about it. You want people that can break down walls, do unscalable things, still support the business independent of your size. So that's customer things. I want to switch and talk a little bit about people things. Look, if your people aren't amazing and your culture isn't amazing, you will not be able to support your customers. A great culture, empowered people, happy

people make happy customers. The two are absolutely linked. Right? So if you've got grumpy people who hate coming to work, what do you think your customers are going to experience? It's not a pleasant thing. So you have to these things are absolutely linked. So there's a bunch of things I did

some nearly everything people told me I was nuts. But this is a view of my calendar from, well, is 2019. You see the yellow is interviews And it is a fun fact that I interviewed nearly every person at the company up until 500 employees. This is just a snapshot of a week. This is I'm averaging three probably a day, every day of my life and sometimes on weekends. I mean, we're a global company. I'm doing calls

at night. I'm doing calls in the early morning. I'm interviewing a lot of people. And everyone is like is it because you don't trust your people? Are you a control freak? Probably a little bit. So like I own that. But one of my mentors and now board members, he and I were talking and he did a very similar thing and what his response to the question of don't you trust me was I don't trust myself and

that's how I feel in interviewing. Let's be honest folks, we meet someone for thirty minutes, as good as you are as a human, you have no idea how that human is going to be. I mean if you are, I would love to find out what questions you ask and what savant level deep dive into people's psychology you have. But the reality is people have gotten good at interviewing. There's like a 100 blog posts on how to

prepare for interviews. So if you don't think that person is skilled at answering your what is your biggest weakness question or what do you want to be when you grow up, no. They're going to give you a really, really good answer. Trust me. Like every time I ask them what their weakness is, they give you some like like answer like I work too hard. Yeah. Okay. Well, that's that's a real weakness. So, yeah. We don't want

people that work hard. Yeah. So, like, completely useless question and and so so so then question is why do I do it? I do it because I think the more humans whoops. I broke something. The more humans that that talk to a people, the more you can triangulate and the more you catch things. The second thing that the reason I do it is that it's a great moment of coaching for my managers. Why did you give

me this candidate? Like how do they get through five people to get to me? That's often a question I ask. How the hell does this person get to me? What did you see that I don't see? Was there something in the background? What did I miss? And it gets them thinking. And well, first of all, they know they're going to get that question, so they're prepared for it. And it creates a lot more rigor in our

process when I'm involved in the process. The reality is I still catch things. I catch things. Job hoppers. This person's worked eight jobs in the last two years. Did you at least ask why they moved around so much? Well, they had a good reason. Really? These are good companies. What were the good reasons? So, like I asked the uncomfortable questions. It's like hey you lasted three months at this company. Did you leave on your own or

did they ask you to leave? I mean, and you'll see how people kind of squirm a little bit in their seat and they thought, well, it was a mutual yeah, mutual. Yeah. Anyway, the point is is that when you ask those hard questions you learn things and you learn things about your team and that now I'm not in every interview, know how to do it because we've we've fine tuned that process. The last thing on interviewing

I'll I'll share is that because we sell to heads of product and I'm a former head of product, I'm a buyer. So my my question in the back of my head when I'm meeting a sales rep or a prospective sales rep is what I buy from this human? Do I feel comfortable? Because some sales people, let's be honest, are a little skeezy, slimy, whatever words you like to use. No offense to any sales people out there,

but like I like a level of authenticity when I'm buying that I know someone's not trying to pull one over on me and get like a quick dollar out of it. So that's how I like to buy and that is how our buyer likes to buy. So the fact that we're connecting these things is really, really, really important. The next thing you'll see, you'll see these darker red ones say 90 plus day check-in. I was meeting

with a CEO very early in the company and said I asked him what he did that was really useful. He said he met with every single employee after the first ninety days. Now think about that, there's a lot of people. Trust me, was told I couldn't do that nearly every month for years of my life. And I just stopped it about a year ago. We added four fifty people last year so that's when I it. So,

that's impossible. So, But, you learn so much when you do that skip level. Like, that's a deep skip level. That is how was onboarding? What was going on? I learned things. I learned things about different departments. I learned things about different functions. We reinvented our SDR function just through me doing pat you know, one on ones repeatedly. We looked at different offices. Like it solves so many problems when you just go really deep in different areas

of the business. One of the interesting things about onboarding is that as a founder, like I hear this like everyone complaining about onboarding like, well, I mean, I'm already onboarded. So like I didn't experience this problem. So it took like eight of these one on ones. Like I went back to our leadership team like, he wants to have this onboarding problem. Like, should we do something about this? Like, feel fine. But you know, really, it's like

you have new people coming off the street, there's lots of jargon and lingo and process and we had to really tighten how we think about onboarding. The next thing we do is look, many of you probably don't even have an office, maybe this is like a completely like dated concept, but we have eight offices globally and I visited each office quarterly and you learn so much. This is me having a team dinner in Israel. Israel was

an acquisition and it took repeated trips to understand the culture and the people. It led to things like I changed out a leader. And I changed out a leader in a foreign country, I mean that was tough. Literally we lost 50% of the office in the first six months. Our EMPS, employee NPS, which we measure quarterly, went from like positive 20 or 30 in the office to negative 10 in six months. I mean, thought that the

whole thing I mean, we're talking about do we shut this thing down? Like I'm traveling there, I'm spending all my evenings on the phone back, like what the hell do I do? I'm doing all these one on ones and but then I just I saw enough positive things and heard enough positive because I was there that we left the leader in seat. That office is now a positive 70 e m p s. Positive 70. It's the

highest in the company. Mean, like like positive 70 by the way is a really good, industry standard. Our company average is over 60, but I credit it to being in seat with these people and them seeing me. This course was pre pandemic. But look, worked at a company pre Pendo where the just didn't like to visit places and then like how does that make the average employee feel in that office? That the CEO like this is

important enough to like spend time with them? And look, you may not have an office, this may be again not relevant to you, but you're going to have people scattered all over the world likely and don't always make them come to you, go to them. It's respect. It's seeing people in their element, seeing people in their community. It's really, really important.

Now, of course, with our size and scale, you can't do that. Well, I still travel, but I can't do all these skip level meetings. I don't meet with everyone individually. So it's hard. I mean, honestly, the day I walked into the office and I didn't know every single person was like a sad day for me and still is a sad day for me. But I literally walk around the streets of Raleigh and Raleigh is not a

huge town and I like people walk up and say, hey, like I should know who they are. And I probably should know who they are but I don't and it makes me very sad. But the reality is you have to do things differently. So now what we do is we do like a very, very detailed comprehensive talent review nearly every quarter, certainly every half year, but that's doing things like Nine Box. If you're not doing Nine

Box, it's looking at it's looking at performance versus skill level or upside. And every single human at the company is putting within a Nine Box. And the executive team spends days reviewing all of these inboxes and all of these teams and understanding who is the talent that we need to make sure we invest in and keep. That is who's the talent that I need to make sure that I spend time with when I go to an

office? I have a list. My admin has that list. When I travel to an office there's a set of like 10 high performer future people that like I make the time to spend time with them. Who are the potential attrition risks in every single office or every single locale and every single department that I should be reselling on why they should be at Pendo for the next four years? Who might as I always tell my team,

who are putting a bear hug around to make sure they just don't go anywhere because we need them, we need them, we want them, and we see their potential. It's these these systems surface up these names. So I do get to know the names that are going to be the future leaders of the company. You have to do this in some way. And look, this takes an incredible amount of time. It's hours of your day, but it is worth it to make sure you're connected to the the amazing people that are gonna power the next generation, at your business.

So look, you gotta do unscalable things. I mean, hope you heard things that sounded like a little bit crazy, lots of hours of doing certain things. But I think it's these are the things that keep you really, really close to the business so you can discover, you can learn, you can see trends that other people don't see. One of the reasons I do unscalable things and this is something for like any founder or executive to think

about is when you're you're up in a high levels in an organization, there are a lot of filters between you and the frontline. Whether it's the frontline engineer, whether it's the frontline sales rep, or the frontline customer success manager, there's a lot of filters. You know, once I was talking to one of our product designers and they said, before I meet with you, my manager, my manager, manager, and my manager's manager, manager wants to review the

presentation and make sure I don't embarrass them. Now that's a little bit sad, I admit. But that's just a fact. The fact is you've got a lot of layers and they all want to look good and they all care about how they're perceived inside the organization. So if there's a presentation to someone high in an organization, you're going to get three people's filter on what that data actually looks like and that isn't always helpful. I actually

like to form my own opinions. So the only way you can do that is to go deep roll up your sleeves, get in the details. I do this every single day of my life and I think it's one of the things that I don't know, I couldn't live without and I certainly couldn't do my job without. And I said I would close on a product related issue and products near to your heart and these are actual

companies, I actually don't even know if these are yeah. I'm sure that they're from, like approved to use, yeah. Always don't know what PR firms and things. But, I'll never forget our CTO and I used to fight so much about scale. He would say, I need time to build scale into the system. We're collecting so much data. And I'll say, well, how much time? Well, I don't really know. And so we kept getting in arguments. I

say, look, we need customers. We need customers and revenue. Like, if something breaks, it breaks. But, like, we can't just, like, not go sign a customer because we think it's going to break. We actually have to just go sign the customer and see what's going to break when it actually does. And this is what we've done. Now it creates a ridiculous amount of stress for your teams when you do it, but you see some of these

names. I mean, I'll never forget when Zendesk was turned in. It was a replacement of an existing product that just didn't scale. So we knew it was going to be hard. One of our competitors literally took days to process the data, and they said, can you handle this? And we were like, sure. Of course, we didn't think we could, but we had no idea it was gonna break. And that was the key lesson is what we

thought was going to break wasn't the thing that actually broke when we turned it on. We turned it on on Friday, it absolutely cratered some portion of our system. The engineering spent team spent the entire weekend, twenty four hour days, patching up what it was. It got it usable. Now we had to make the performance substantively better than what they were, using before. That took probably another month, but we were very communicative with the customers every

week. And look, we said, we want to earn your business. Give us a month to handle your scale. And if we can handle your scale performance that you like, give us the business. And we are in the business. They're still a customer today. They're they're one of our largest data. And you can think about we can basically collect that data from products. Think about someone using a Zendesk. They're in the product all day long. It's an

incredible amount of data. Another one is like Schoology, which is an EdTech company which has an incredible amount of data and again broke the system because it's another level of scale. Each of these companies when something broke we did work that unlocked a step function of new scale but you wouldn't have known it until you got it. And that's the lesson. Sometimes things have to break and fall over to actually see what you need to fix.

And look, I'm wearing a shirt. We used to print shirts when we had numbers events that says a 100,000,000,000 events on it. We now get over a 100,000,000,000 a week. And this is when we had a 100,000,000,000 cumulatively. This is probably back in that 2017 range. We have tens of trillions of events now. So the reality is, what our brains sometimes can't process and they hold us back from doing things. Sometimes you just got to go

get the customer, deal a little bit of pain and work through it. This is how we've done it and driving some of success we've had. And with that, thank you for your time. It's great to be here. Enjoy the rest of your day.