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Nov 10, 2019 · 16m · top-founders

1569 Why 1000+ Boarddecks Get Manged Using This $7m ARR Tool

Paroon Chadha · 8m spoken Nathan Latka · 5m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this interview, Passageways co-founder and CEO Parun Chadha joins Nathan Latka to discuss how the company scaled its flagship board portal platform, OnBoard, to over 1,000 enterprise customers, $7 million in ARR, and a 109% net revenue retention rate.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 39.9% of the talking time here. How this is scored →

Nathan as informed peer 6.2 Guest teaching 2.8 Guest disagreement 1.4 Nathan pushing back 3.0
05100:0010:001:05–4:07 · Nathan as informed peer 5/10 Passageways' Product Ecosystem: Onsemble vs. OnBoard Nathan directs the conversation to focus specifically on the faster-growing OnBoard product rather than covering both products. He tests the guest on customer pricing distribution and quickly synthesizes the enterprise ACV distribution curve.4:07–7:53 · Nathan as informed peer 6/10 Company Origins at Purdue and Scaling to 1,000+ Customers Nathan drills into the mechanics of the sales organization, probing into SDR-to-AE ratios, quotas, and conversion definitions. Parun provides detailed operational metrics on sales-accepted leads and pipeline disqualification timelines.7:53–10:38 · Nathan as informed peer 8/10 Capital Strategy, ARR Growth, and Legacy Onsemble Revenue Nathan catches a mathematical inconsistency when Parun states ARR was $3.5M a year ago and grew 65-70% to reach $7M today. Parun pushes back by differentiating between ARR growth and GAAP accounting revenue.10:38–12:50 · Nathan as informed peer 7/10 Retention Rates, Expansion Drivers, and Global CAC Dynamics Nathan instantly deduces the 12% gross expansion rate from Parun's 3% annual churn and 109% net revenue retention figures. Parun details the drivers of expansion and why international CAC is temporarily elevated.12:51–15:29 · Nathan as informed peer 5/10 Total Company Revenue Composition and Seasonality Dynamics Nathan extrapolates total company ARR from the 2/3 to 1/3 product revenue ratio. Parun educates Nathan on enterprise buying cycles, noting that 40% of their business happens in the final 30 days due to financial sector budget flushes.1:05–4:07 · Guest teaching 2/10 Passageways' Product Ecosystem: Onsemble vs. OnBoard Nathan directs the conversation to focus specifically on the faster-growing OnBoard product rather than covering both products. He tests the guest on customer pricing distribution and quickly synthesizes the enterprise ACV distribution curve.4:07–7:53 · Guest teaching 2/10 Company Origins at Purdue and Scaling to 1,000+ Customers Nathan drills into the mechanics of the sales organization, probing into SDR-to-AE ratios, quotas, and conversion definitions. Parun provides detailed operational metrics on sales-accepted leads and pipeline disqualification timelines.7:53–10:38 · Guest teaching 4/10 Capital Strategy, ARR Growth, and Legacy Onsemble Revenue Nathan catches a mathematical inconsistency when Parun states ARR was $3.5M a year ago and grew 65-70% to reach $7M today. Parun pushes back by differentiating between ARR growth and GAAP accounting revenue.10:38–12:50 · Guest teaching 2/10 Retention Rates, Expansion Drivers, and Global CAC Dynamics Nathan instantly deduces the 12% gross expansion rate from Parun's 3% annual churn and 109% net revenue retention figures. Parun details the drivers of expansion and why international CAC is temporarily elevated.12:51–15:29 · Guest teaching 4/10 Total Company Revenue Composition and Seasonality Dynamics Nathan extrapolates total company ARR from the 2/3 to 1/3 product revenue ratio. Parun educates Nathan on enterprise buying cycles, noting that 40% of their business happens in the final 30 days due to financial sector budget flushes.1:05–4:07 · Guest disagreement 1/10 Passageways' Product Ecosystem: Onsemble vs. OnBoard Nathan directs the conversation to focus specifically on the faster-growing OnBoard product rather than covering both products. He tests the guest on customer pricing distribution and quickly synthesizes the enterprise ACV distribution curve.4:07–7:53 · Guest disagreement 1/10 Company Origins at Purdue and Scaling to 1,000+ Customers Nathan drills into the mechanics of the sales organization, probing into SDR-to-AE ratios, quotas, and conversion definitions. Parun provides detailed operational metrics on sales-accepted leads and pipeline disqualification timelines.7:53–10:38 · Guest disagreement 3/10 Capital Strategy, ARR Growth, and Legacy Onsemble Revenue Nathan catches a mathematical inconsistency when Parun states ARR was $3.5M a year ago and grew 65-70% to reach $7M today. Parun pushes back by differentiating between ARR growth and GAAP accounting revenue.10:38–12:50 · Guest disagreement 1/10 Retention Rates, Expansion Drivers, and Global CAC Dynamics Nathan instantly deduces the 12% gross expansion rate from Parun's 3% annual churn and 109% net revenue retention figures. Parun details the drivers of expansion and why international CAC is temporarily elevated.12:51–15:29 · Guest disagreement 1/10 Total Company Revenue Composition and Seasonality Dynamics Nathan extrapolates total company ARR from the 2/3 to 1/3 product revenue ratio. Parun educates Nathan on enterprise buying cycles, noting that 40% of their business happens in the final 30 days due to financial sector budget flushes.1:05–4:07 · Nathan pushing back 3/10 Passageways' Product Ecosystem: Onsemble vs. OnBoard Nathan directs the conversation to focus specifically on the faster-growing OnBoard product rather than covering both products. He tests the guest on customer pricing distribution and quickly synthesizes the enterprise ACV distribution curve.4:07–7:53 · Nathan pushing back 2/10 Company Origins at Purdue and Scaling to 1,000+ Customers Nathan drills into the mechanics of the sales organization, probing into SDR-to-AE ratios, quotas, and conversion definitions. Parun provides detailed operational metrics on sales-accepted leads and pipeline disqualification timelines.7:53–10:38 · Nathan pushing back 6/10 Capital Strategy, ARR Growth, and Legacy Onsemble Revenue Nathan catches a mathematical inconsistency when Parun states ARR was $3.5M a year ago and grew 65-70% to reach $7M today. Parun pushes back by differentiating between ARR growth and GAAP accounting revenue.10:38–12:50 · Nathan pushing back 2/10 Retention Rates, Expansion Drivers, and Global CAC Dynamics Nathan instantly deduces the 12% gross expansion rate from Parun's 3% annual churn and 109% net revenue retention figures. Parun details the drivers of expansion and why international CAC is temporarily elevated.12:51–15:29 · Nathan pushing back 2/10 Total Company Revenue Composition and Seasonality Dynamics Nathan extrapolates total company ARR from the 2/3 to 1/3 product revenue ratio. Parun educates Nathan on enterprise buying cycles, noting that 40% of their business happens in the final 30 days due to financial sector budget flushes.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 63.7% · guest 36.3%0:00 · Nathan 63.7% · guest 36.3%3:00 · Nathan 25% · guest 75%3:00 · Nathan 25% · guest 75%6:00 · Nathan 29.2% · guest 70.8%6:00 · Nathan 29.2% · guest 70.8%9:00 · Nathan 40.6% · guest 59.4%9:00 · Nathan 40.6% · guest 59.4%12:00 · Nathan 26.1% · guest 73.9%12:00 · Nathan 26.1% · guest 73.9%15:00 · Nathan 76.9% · guest 23.1%15:00 · Nathan 76.9% · guest 23.1%
Sharpest disagreement ▶ 9:32 Parun defends revenue metrics against Nathan's growth math

When Nathan asserts that growing from 3.5 million to 7 million represents 100% growth rather than 65%, Parun firmly pushes back by differentiating ARR growth from GAAP revenue figures.

 Hardest push from Nathan ▶ 9:28 Nathan challenges the mathematical discrepancy in year-over-year ARR

Nathan refuses to accept the presented numbers without clarification, pointing out that doubling from $3.5M to $7M is 100% growth and requiring Parun to reconcile the math.

 Biggest teaching moment ▶ 13:28 Parun reveals massive 40% year-end budget flush concentration

Parun surprises Nathan by demonstrating that 40% of their entire annual revenue closes in the final month of the year due to financial industry seasonality and corporate budget flushes.

 Nathan holds their own ▶ 11:00 Nathan immediately calculates expansion rate from NRR and gross churn

Nathan demonstrates sharp SaaS financial fluency by instantly backing out the implied 12% expansion rate from Parun's 3% annual churn and 109% NRR numbers.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Passageways' Product Ecosystem: Onsemble vs. OnBoard 5213 Nathan directs the conversation to focus specifically on the faster-growing OnBoard product rather than covering both products. He tests the guest on customer pricing distribution and quickly synthesizes the enterprise ACV distribution curve.
Company Origins at Purdue and Scaling to 1,000+ Customers 6212 Nathan drills into the mechanics of the sales organization, probing into SDR-to-AE ratios, quotas, and conversion definitions. Parun provides detailed operational metrics on sales-accepted leads and pipeline disqualification timelines.
Capital Strategy, ARR Growth, and Legacy Onsemble Revenue 8436 Nathan catches a mathematical inconsistency when Parun states ARR was $3.5M a year ago and grew 65-70% to reach $7M today. Parun pushes back by differentiating between ARR growth and GAAP accounting revenue.
Retention Rates, Expansion Drivers, and Global CAC Dynamics 7212 Nathan instantly deduces the 12% gross expansion rate from Parun's 3% annual churn and 109% net revenue retention figures. Parun details the drivers of expansion and why international CAC is temporarily elevated.
Total Company Revenue Composition and Seasonality Dynamics 5412 Nathan extrapolates total company ARR from the 2/3 to 1/3 product revenue ratio. Parun educates Nathan on enterprise buying cycles, noting that 40% of their business happens in the final 30 days due to financial sector budget flushes.

Statements from this episode (17)

Assertion Not checkable as stated
OnBoard Charges Between $5,000 and $60,000 Annually for Board Management
“You could get started for about 5000 dollars a year. It's per user but our larger customers about 50, 60,000 dollars a year.”
Paroon Chadha Nov 10, 2019 ▶ 3:40
Assertion Not checkable as stated
OnBoard Averages $7,000 to $8,000 in Annual Contract Value
“The ACB is right around seven, 8000 dollars.”
Paroon Chadha Nov 10, 2019 ▶ 3:56
Assertion Partly supported
The US Supreme Court Uses Passageways for Its Board Management
“Now we have some of the largest customers in the world using our product, including some, you know very amazing non-profits Supreme Court in our country is using our product, some of the Fortune, 500 companies some of the biggest banks and hospitals using our …”
Paroon Chadha Nov 10, 2019 ▶ 5:01
Assertion Not checkable as stated
Passageways Serves Over 1,000 Active Board Management Customers
“We're talking about more than a thousand customers at this point.”
Paroon Chadha Nov 10, 2019 ▶ 5:39
Disclosure
Passageways Drives Two-Thirds of Acquisition Through Inbound Channels
“So most of it is, you know about two thirds of it is inbound and one third is outbound.”
Paroon Chadha Nov 10, 2019 ▶ 5:52
Disclosure
Passageways Employs 100 People, Including 15 Sales Development Reps
“We are right around a hundred people at this point, and about 15 SDRs.”
Paroon Chadha Nov 10, 2019 ▶ 6:19
Disclosure
Passageways Maintains a 1:1 Ratio of SDRs to Account Executives
“So we have almost a one to one ratio on the SDR to AEs.”
Paroon Chadha Nov 10, 2019 ▶ 6:34
Disclosure
Passageways Wins 25% to 30% of Qualified Sales Opportunities
“We win about, you know, 25, 30% of our, you know, opportunities.”
Paroon Chadha Nov 10, 2019 ▶ 7:09
Disclosure
Passageways Holds $5 Million on Its Balance Sheet Post-Raise
“At this point, we are, you know, we have about five mil on the balance sheet.”
Paroon Chadha Nov 10, 2019 ▶ 8:28
Assertion Not checkable as stated
Passageways Increased OnBoard ARR by 65% to 70% This Year
“We did grow 65, 70% this year. That's the ARR growth that we saw.”
Paroon Chadha Nov 10, 2019 ▶ 9:37
Assertion Not checkable as stated
350 Enterprise Customers Still Use Passageways' 2003 Legacy Product
“We launched that in, you know, back in 2003. And we do have three 50 customers, enterprise customers using that product.”
Paroon Chadha Nov 10, 2019 ▶ 10:28
Assertion Not checkable as stated
Passageways Maintains 3% Churn and 108% to 109% Net Retention
“Our churns you know, about three percent. Our dollar retention rate is, you know at this point, I think we are ending the year at about a 108 109%.”
Paroon Chadha Nov 10, 2019 ▶ 10:47
Assertion Not checkable as stated
Passageways Operates With a 12-Month Payback Period on CAC
“We, you know, at this point you know, we're spending about a dollar to get you know, about a dollar in ARR.”
Paroon Chadha Nov 10, 2019 ▶ 11:54
Disclosure
OnBoard Drives Two-Thirds of Passageways' Total Annual Revenue
“Two thirds of the product of the revenue at this point is you know, projected to be board product by the end of the year. And one third is going to be an employee collaboration product.”
Paroon Chadha Nov 10, 2019 ▶ 13:01
Prediction Not checkable as stated
Passageways Closes 40% of Its Annual Business in November and December
“Believe it or not, between now and the end of the year, I'm gonna do 40% of the year's business.”
Paroon Chadha Nov 10, 2019 ▶ 13:38
Disclosure
Financial Services Customers Generate 50% of Passageways' Total Revenue
“About 50% of my business is coming from the financial services industry.”
Paroon Chadha Nov 10, 2019 ▶ 13:48
Assertion Not checkable as stated
Passageways Still Uses QuickBooks for Billing at 1,000-Customer Scale
“We're still using QuickBooks.”
Paroon Chadha Nov 10, 2019 ▶ 14:50
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