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Mar 14, 2018 · 17m · top-founders

963 How Ping Identity Moved $75m One Time Revenue to $100m+ Recurring and Sold for $600m in 2016

Andre Durand · 9m spoken Nathan Latka · 5m spoken
0:00 / 0:00

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In this episode of the Top Entrepreneurs podcast, host Nathan Latka interviews Ping Identity founder and CEO Andre Durand about navigating the company's pivotal transition from $75 million in perpetual licensing to over $100 million in recurring SaaS ARR, leading to its $600 million acquisition by Vista Equity Partners.

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 37.4% of the talking time here. How this is scored →

Nathan as informed peer 4.5 Guest teaching 3.3 Guest disagreement 1.0 Nathan pushing back 1.8
05100:0010:000:49–4:51 · Nathan as informed peer 3/10 Andre Durand's Background and Serial Entrepreneurship Nathan introduces Andre's previous exits and prompts him on the acquisition by Vista Equity Partners. Andre provides a detailed overview of founding Ping Identity in 2002 and the shift towards frictionless zero-login security.4:51–6:54 · Nathan as informed peer 4/10 Customer Segments, Enterprise Pricing, and Sales Organization Nathan probes into pricing mechanics, contract value, and sales strategy. Andre corrects Nathan's assumption about inside sales, clarifying that large enterprise deals require a substantial field sales force.6:54–9:14 · Nathan as informed peer 5/10 Pivoting from Perpetual Licensing to $100M+ Recurring ARR Andre details transitioning the business model from perpetual licensing to subscriptions, explaining the resulting $80M cash flow gap. When Nathan mistakes the baseline $75M for ARR, Andre politely corrects him that it was one-time bookings.9:14–11:49 · Nathan as informed peer 5/10 Evaluating Private Equity Acquisition Versus an IPO Nathan presses Andre on choosing a private equity sale for $600M instead of pursuing an IPO. Andre schools Nathan on investor horizon limits and the practical realities of public market lockup periods and secondary offerings.11:51–14:03 · Nathan as informed peer 7/10 SaaS Metrics, Payback Periods, and Customer Expansion Nathan demonstrates strong SaaS fluency by translating CAC ratios into an estimated 14-month payback period and grilling on net retention versus logo churn. Andre validates Nathan's figures and outlines expansion white space.14:04–16:42 · Nathan as informed peer 3/10 Post-Exit Motivation and the Audacious Goat Joke Nathan asks about post-exit motivation and playfully inquires about Andre's 50th birthday shirt, leading to an amusing story about a misheard BHAG joke before finishing the Famous Five questions.0:49–4:51 · Guest teaching 3/10 Andre Durand's Background and Serial Entrepreneurship Nathan introduces Andre's previous exits and prompts him on the acquisition by Vista Equity Partners. Andre provides a detailed overview of founding Ping Identity in 2002 and the shift towards frictionless zero-login security.4:51–6:54 · Guest teaching 3/10 Customer Segments, Enterprise Pricing, and Sales Organization Nathan probes into pricing mechanics, contract value, and sales strategy. Andre corrects Nathan's assumption about inside sales, clarifying that large enterprise deals require a substantial field sales force.6:54–9:14 · Guest teaching 5/10 Pivoting from Perpetual Licensing to $100M+ Recurring ARR Andre details transitioning the business model from perpetual licensing to subscriptions, explaining the resulting $80M cash flow gap. When Nathan mistakes the baseline $75M for ARR, Andre politely corrects him that it was one-time bookings.9:14–11:49 · Guest teaching 6/10 Evaluating Private Equity Acquisition Versus an IPO Nathan presses Andre on choosing a private equity sale for $600M instead of pursuing an IPO. Andre schools Nathan on investor horizon limits and the practical realities of public market lockup periods and secondary offerings.11:51–14:03 · Guest teaching 2/10 SaaS Metrics, Payback Periods, and Customer Expansion Nathan demonstrates strong SaaS fluency by translating CAC ratios into an estimated 14-month payback period and grilling on net retention versus logo churn. Andre validates Nathan's figures and outlines expansion white space.14:04–16:42 · Guest teaching 1/10 Post-Exit Motivation and the Audacious Goat Joke Nathan asks about post-exit motivation and playfully inquires about Andre's 50th birthday shirt, leading to an amusing story about a misheard BHAG joke before finishing the Famous Five questions.0:49–4:51 · Guest disagreement 1/10 Andre Durand's Background and Serial Entrepreneurship Nathan introduces Andre's previous exits and prompts him on the acquisition by Vista Equity Partners. Andre provides a detailed overview of founding Ping Identity in 2002 and the shift towards frictionless zero-login security.4:51–6:54 · Guest disagreement 1/10 Customer Segments, Enterprise Pricing, and Sales Organization Nathan probes into pricing mechanics, contract value, and sales strategy. Andre corrects Nathan's assumption about inside sales, clarifying that large enterprise deals require a substantial field sales force.6:54–9:14 · Guest disagreement 1/10 Pivoting from Perpetual Licensing to $100M+ Recurring ARR Andre details transitioning the business model from perpetual licensing to subscriptions, explaining the resulting $80M cash flow gap. When Nathan mistakes the baseline $75M for ARR, Andre politely corrects him that it was one-time bookings.9:14–11:49 · Guest disagreement 2/10 Evaluating Private Equity Acquisition Versus an IPO Nathan presses Andre on choosing a private equity sale for $600M instead of pursuing an IPO. Andre schools Nathan on investor horizon limits and the practical realities of public market lockup periods and secondary offerings.11:51–14:03 · Guest disagreement 1/10 SaaS Metrics, Payback Periods, and Customer Expansion Nathan demonstrates strong SaaS fluency by translating CAC ratios into an estimated 14-month payback period and grilling on net retention versus logo churn. Andre validates Nathan's figures and outlines expansion white space.14:04–16:42 · Guest disagreement 0/10 Post-Exit Motivation and the Audacious Goat Joke Nathan asks about post-exit motivation and playfully inquires about Andre's 50th birthday shirt, leading to an amusing story about a misheard BHAG joke before finishing the Famous Five questions.0:49–4:51 · Nathan pushing back 1/10 Andre Durand's Background and Serial Entrepreneurship Nathan introduces Andre's previous exits and prompts him on the acquisition by Vista Equity Partners. Andre provides a detailed overview of founding Ping Identity in 2002 and the shift towards frictionless zero-login security.4:51–6:54 · Nathan pushing back 2/10 Customer Segments, Enterprise Pricing, and Sales Organization Nathan probes into pricing mechanics, contract value, and sales strategy. Andre corrects Nathan's assumption about inside sales, clarifying that large enterprise deals require a substantial field sales force.6:54–9:14 · Nathan pushing back 2/10 Pivoting from Perpetual Licensing to $100M+ Recurring ARR Andre details transitioning the business model from perpetual licensing to subscriptions, explaining the resulting $80M cash flow gap. When Nathan mistakes the baseline $75M for ARR, Andre politely corrects him that it was one-time bookings.9:14–11:49 · Nathan pushing back 3/10 Evaluating Private Equity Acquisition Versus an IPO Nathan presses Andre on choosing a private equity sale for $600M instead of pursuing an IPO. Andre schools Nathan on investor horizon limits and the practical realities of public market lockup periods and secondary offerings.11:51–14:03 · Nathan pushing back 2/10 SaaS Metrics, Payback Periods, and Customer Expansion Nathan demonstrates strong SaaS fluency by translating CAC ratios into an estimated 14-month payback period and grilling on net retention versus logo churn. Andre validates Nathan's figures and outlines expansion white space.14:04–16:42 · Nathan pushing back 1/10 Post-Exit Motivation and the Audacious Goat Joke Nathan asks about post-exit motivation and playfully inquires about Andre's 50th birthday shirt, leading to an amusing story about a misheard BHAG joke before finishing the Famous Five questions.

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

0:00 · Nathan 52.4% · guest 47.6%0:00 · Nathan 52.4% · guest 47.6%3:00 · Nathan 7.5% · guest 92.5%3:00 · Nathan 7.5% · guest 92.5%6:00 · Nathan 27.9% · guest 72.1%6:00 · Nathan 27.9% · guest 72.1%9:00 · Nathan 50.2% · guest 49.8%9:00 · Nathan 50.2% · guest 49.8%12:00 · Nathan 37.6% · guest 62.4%12:00 · Nathan 37.6% · guest 62.4%15:00 · Nathan 53% · guest 47%15:00 · Nathan 53% · guest 47%
Sharpest disagreement ▶ 10:16 Andre challenges IPO liquidity assumptions

Andre directly counters Nathan's premise that going public offers cleaner liquidity, emphasizing that pulling out both principal and profit takes multiple years and perfect execution.

 Hardest push from Nathan ▶ 9:14 Nathan questions selling to PE over doing an IPO

Nathan challenges the strategic choice of selling out for $600M rather than retaining control and taking a $100M+ ARR company to the public market.

 Biggest teaching moment ▶ 10:18 Andre educates on public market lockups and secondary exits

Andre walks through the mechanics of capital return, showing why early venture backers often prefer an immediate PE buyout over a prolonged public offering process.

 Nathan holds their own ▶ 12:26 Nathan calculates CAC payback speed on the fly

Nathan immediately translates Andre's $1.20 CAC per dollar of ARR into a precise 14-month payback period, displaying sharp SaaS metrics command.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Andre Durand's Background and Serial Entrepreneurship 3311 Nathan introduces Andre's previous exits and prompts him on the acquisition by Vista Equity Partners. Andre provides a detailed overview of founding Ping Identity in 2002 and the shift towards frictionless zero-login security.
Customer Segments, Enterprise Pricing, and Sales Organization 4312 Nathan probes into pricing mechanics, contract value, and sales strategy. Andre corrects Nathan's assumption about inside sales, clarifying that large enterprise deals require a substantial field sales force.
Pivoting from Perpetual Licensing to $100M+ Recurring ARR 5512 Andre details transitioning the business model from perpetual licensing to subscriptions, explaining the resulting $80M cash flow gap. When Nathan mistakes the baseline $75M for ARR, Andre politely corrects him that it was one-time bookings.
Evaluating Private Equity Acquisition Versus an IPO 5623 Nathan presses Andre on choosing a private equity sale for $600M instead of pursuing an IPO. Andre schools Nathan on investor horizon limits and the practical realities of public market lockup periods and secondary offerings.
SaaS Metrics, Payback Periods, and Customer Expansion 7212 Nathan demonstrates strong SaaS fluency by translating CAC ratios into an estimated 14-month payback period and grilling on net retention versus logo churn. Andre validates Nathan's figures and outlines expansion white space.
Post-Exit Motivation and the Audacious Goat Joke 3101 Nathan asks about post-exit motivation and playfully inquires about Andre's 50th birthday shirt, leading to an amusing story about a misheard BHAG joke before finishing the Famous Five questions.

Statements from this episode (10)

Insight
Durand: Device intelligence will soon enable zero-login continuous security
“It's the notion that our devices are so intelligent now and have so many sensors and capabilities that they should be able to recognize us when we're using them. And then the backend infrastructure that supports what we have access to should be smart enough to…”
Andre Durand Mar 14, 2018 ▶ 4:06
Assertion Not checkable as stated
Durand: Ping Identity's initial ASPs land in the low hundreds of thousands
“You know, our average prices range from, you know, kind of initial ASPs, if you will, range in the, Low hundreds of thousands. And for larger customers, they will make north of million dollar annual commitments.”
Andre Durand Mar 14, 2018 ▶ 6:03
Insight
Durand: Shifting to SaaS creates a two-thirds cash flow deficit initially
“So when we switch the business to subscription, you start collecting about a third of what you would normally collect under a perpetual license. And so that created a cashflow deficit the first year of about two thirds of that seventy five million, the second …”
Andre Durand Mar 14, 2018 ▶ 7:50
Disclosure
Durand: Ping Identity raised $80M just to survive its SaaS transition
“So between 20 13 and 20 16, we needed to raise about eighty million of the 110 To fund the cash flow deficit during the transition.”
Andre Durand Mar 14, 2018 ▶ 8:11
Assertion Supported
Durand: Ping Identity converted $75M perpetual revenue to $100M+ ARR
“And so at the end of 20 16, then, we were north. We had converted Seventy-five million in one-time revenue to over a hundred million in recurring revenue.”
Andre Durand Mar 14, 2018 ▶ 8:40
Assertion Contradicted
Durand: Services fees consistently stay under 5% of Ping Identity's revenue
“No, we've always been less than five percent services fees, so that's really all recurring.”
Andre Durand Mar 14, 2018 ▶ 9:10
Insight
Durand: Full VC liquidity after an IPO takes two to three years
“You know, an organized secondary with perfect execution, maybe within the first six to nine months would get out maybe the invested capital but it wouldn't get out their profit. And so, you know, the truth is the timing of liquidity for early investors that wo…”
Andre Durand Mar 14, 2018 ▶ 10:29
Assertion Partly supported
Durand: Ping Identity has just under 1,500 enterprise customers
“We're just under 1500 enterprise customers.”
Andre Durand Mar 14, 2018 ▶ 11:56
Assertion Not checkable as stated
Durand: Ping Identity spends $1.20 to acquire $1.00 of new ARR
“We spend about a dollar 20 to get a dollar in ARR.”
Andre Durand Mar 14, 2018 ▶ 12:31
Assertion Not checkable as stated
Durand: Ping Identity's enterprise account LTV is in the millions
“The lifetime value of an enterprise account is absolutely in the millions.”
Andre Durand Mar 14, 2018 ▶ 13:42
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