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Mar 30, 2017 · 21m · top-founders

EP 614: Pendo Raises $31M Helping 200 Customers With In App Messaging To Drive Usage with CEO Todd Olson

Nathan Latka · 10m spoken Todd Olson · 8m 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 episode of The Top, Nathan Latka interviews Pendo CEO Todd Olson about bootstrapping and scaling the product intelligence platform to over 200 customers, $31M in funding, and 140% net revenue retention.

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 55.4% of the talking time here. How this is scored →

Nathan as informed peer 4.0 Guest teaching 2.6 Guest disagreement 2.1 Nathan pushing back 2.7
05100:0010:0020:000:27–4:13 · Nathan as informed peer 4/10 Weekly Contest Winner and Subscription Promotion Nathan introduces the interview and probes on whether Pendo is mobile-only and how it compares to Intercom. Todd clarifies that Pendo is primarily for web applications and focuses on in-app user onboarding and guidance campaigns rather than general communication.4:13–6:13 · Nathan as informed peer 4/10 The Founding of Pendo and Rally Software Experience Nathan tries to identify the company Todd previously sold to Rally Software, confusing it with an unrelated 6sense URL. Todd politely corrects him on the spelling and acquisition details, while Nathan offers domain insights into product engagement milestones.6:13–8:34 · Nathan as informed peer 5/10 Early Bootstrapping, Seed Round, and Capital Growth Nathan digs into the startup financing history, identifying the rarity of a million-dollar convertible note in 2013 and joking about holiday closing deadlines. Todd agrees collaboratively with Nathan's framing regarding deal mechanics.8:34–12:53 · Nathan as informed peer 6/10 Customer Tiers, Pricing, and Multi-Product Expansion When Todd playfully deflects a question about customer cohorts by saying all customers are top tier, Nathan openly resets and restates the question. Nathan and Todd then dive into multi-product expansion models versus seat-based pricing.12:54–16:11 · Nathan as informed peer 7/10 SaaS Retention Metrics and Net Negative Churn Nathan calculates CAC payback and extrapolates MRR from customer counts and ARPU. Todd pushes back firmly on confirming revenue figures on air, leading Nathan to defend why transparent benchmarks matter to founders.16:13–19:07 · Nathan as informed peer 2/10 Sponsor Break: FreshBooks Accounting and Expense Tracking Following the mid-roll ad read, Nathan transitions to the Famous Five rapid-fire segment. Todd answers succinctly with minimal friction or debate.19:07–19:48 · Nathan as informed peer 0/10 Founder Journey Summary and Interview Conclusion Monologue outro segment where Nathan recaps Pendo's key metrics, funding, and founding story before delivering sponsor sign-offs.0:27–4:13 · Guest teaching 3/10 Weekly Contest Winner and Subscription Promotion Nathan introduces the interview and probes on whether Pendo is mobile-only and how it compares to Intercom. Todd clarifies that Pendo is primarily for web applications and focuses on in-app user onboarding and guidance campaigns rather than general communication.4:13–6:13 · Guest teaching 4/10 The Founding of Pendo and Rally Software Experience Nathan tries to identify the company Todd previously sold to Rally Software, confusing it with an unrelated 6sense URL. Todd politely corrects him on the spelling and acquisition details, while Nathan offers domain insights into product engagement milestones.6:13–8:34 · Guest teaching 2/10 Early Bootstrapping, Seed Round, and Capital Growth Nathan digs into the startup financing history, identifying the rarity of a million-dollar convertible note in 2013 and joking about holiday closing deadlines. Todd agrees collaboratively with Nathan's framing regarding deal mechanics.8:34–12:53 · Guest teaching 4/10 Customer Tiers, Pricing, and Multi-Product Expansion When Todd playfully deflects a question about customer cohorts by saying all customers are top tier, Nathan openly resets and restates the question. Nathan and Todd then dive into multi-product expansion models versus seat-based pricing.12:54–16:11 · Guest teaching 4/10 SaaS Retention Metrics and Net Negative Churn Nathan calculates CAC payback and extrapolates MRR from customer counts and ARPU. Todd pushes back firmly on confirming revenue figures on air, leading Nathan to defend why transparent benchmarks matter to founders.16:13–19:07 · Guest teaching 1/10 Sponsor Break: FreshBooks Accounting and Expense Tracking Following the mid-roll ad read, Nathan transitions to the Famous Five rapid-fire segment. Todd answers succinctly with minimal friction or debate.19:07–19:48 · Guest teaching 0/10 Founder Journey Summary and Interview Conclusion Monologue outro segment where Nathan recaps Pendo's key metrics, funding, and founding story before delivering sponsor sign-offs.0:27–4:13 · Guest disagreement 2/10 Weekly Contest Winner and Subscription Promotion Nathan introduces the interview and probes on whether Pendo is mobile-only and how it compares to Intercom. Todd clarifies that Pendo is primarily for web applications and focuses on in-app user onboarding and guidance campaigns rather than general communication.4:13–6:13 · Guest disagreement 3/10 The Founding of Pendo and Rally Software Experience Nathan tries to identify the company Todd previously sold to Rally Software, confusing it with an unrelated 6sense URL. Todd politely corrects him on the spelling and acquisition details, while Nathan offers domain insights into product engagement milestones.6:13–8:34 · Guest disagreement 1/10 Early Bootstrapping, Seed Round, and Capital Growth Nathan digs into the startup financing history, identifying the rarity of a million-dollar convertible note in 2013 and joking about holiday closing deadlines. Todd agrees collaboratively with Nathan's framing regarding deal mechanics.8:34–12:53 · Guest disagreement 3/10 Customer Tiers, Pricing, and Multi-Product Expansion When Todd playfully deflects a question about customer cohorts by saying all customers are top tier, Nathan openly resets and restates the question. Nathan and Todd then dive into multi-product expansion models versus seat-based pricing.12:54–16:11 · Guest disagreement 5/10 SaaS Retention Metrics and Net Negative Churn Nathan calculates CAC payback and extrapolates MRR from customer counts and ARPU. Todd pushes back firmly on confirming revenue figures on air, leading Nathan to defend why transparent benchmarks matter to founders.16:13–19:07 · Guest disagreement 1/10 Sponsor Break: FreshBooks Accounting and Expense Tracking Following the mid-roll ad read, Nathan transitions to the Famous Five rapid-fire segment. Todd answers succinctly with minimal friction or debate.19:07–19:48 · Guest disagreement 0/10 Founder Journey Summary and Interview Conclusion Monologue outro segment where Nathan recaps Pendo's key metrics, funding, and founding story before delivering sponsor sign-offs.0:27–4:13 · Nathan pushing back 2/10 Weekly Contest Winner and Subscription Promotion Nathan introduces the interview and probes on whether Pendo is mobile-only and how it compares to Intercom. Todd clarifies that Pendo is primarily for web applications and focuses on in-app user onboarding and guidance campaigns rather than general communication.4:13–6:13 · Nathan pushing back 2/10 The Founding of Pendo and Rally Software Experience Nathan tries to identify the company Todd previously sold to Rally Software, confusing it with an unrelated 6sense URL. Todd politely corrects him on the spelling and acquisition details, while Nathan offers domain insights into product engagement milestones.6:13–8:34 · Nathan pushing back 3/10 Early Bootstrapping, Seed Round, and Capital Growth Nathan digs into the startup financing history, identifying the rarity of a million-dollar convertible note in 2013 and joking about holiday closing deadlines. Todd agrees collaboratively with Nathan's framing regarding deal mechanics.8:34–12:53 · Nathan pushing back 6/10 Customer Tiers, Pricing, and Multi-Product Expansion When Todd playfully deflects a question about customer cohorts by saying all customers are top tier, Nathan openly resets and restates the question. Nathan and Todd then dive into multi-product expansion models versus seat-based pricing.12:54–16:11 · Nathan pushing back 5/10 SaaS Retention Metrics and Net Negative Churn Nathan calculates CAC payback and extrapolates MRR from customer counts and ARPU. Todd pushes back firmly on confirming revenue figures on air, leading Nathan to defend why transparent benchmarks matter to founders.16:13–19:07 · Nathan pushing back 1/10 Sponsor Break: FreshBooks Accounting and Expense Tracking Following the mid-roll ad read, Nathan transitions to the Famous Five rapid-fire segment. Todd answers succinctly with minimal friction or debate.19:07–19:48 · Nathan pushing back 0/10 Founder Journey Summary and Interview Conclusion Monologue outro segment where Nathan recaps Pendo's key metrics, funding, and founding story before delivering sponsor sign-offs.

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

0:00 · Nathan 80% · guest 20%0:00 · Nathan 80% · guest 20%3:00 · Nathan 27.2% · guest 72.8%3:00 · Nathan 27.2% · guest 72.8%6:00 · Nathan 52.1% · guest 47.9%6:00 · Nathan 52.1% · guest 47.9%9:00 · Nathan 35.4% · guest 64.6%9:00 · Nathan 35.4% · guest 64.6%12:00 · Nathan 34.7% · guest 65.3%12:00 · Nathan 34.7% · guest 65.3%15:00 · Nathan 75.1% · guest 24.9%15:00 · Nathan 75.1% · guest 24.9%18:00 · Nathan 84.7% · guest 15.3%18:00 · Nathan 84.7% · guest 15.3%21:00 · Nathan 0% · guest 0%21:00 · Nathan 0% · guest 0%
Sharpest disagreement ▶ 15:48 Refusal to confirm revenue numbers

Todd directly pushes back against Nathan calculating his company's MRR on air, asserting that he will not quote or comment on revenue publicly.

 Hardest push from Nathan ▶ 8:58 Reframing deflected customer tier question

Nathan rejects Todd's evasive PR answer that all customers are top tier, explicitly rewording and re-asking the question to get the exact customer cohort distribution.

 Biggest teaching moment ▶ 11:17 Todd explains why seat pricing fails for PM tools

Todd educates Nathan on why charging per product rather than per seat is essential when selling to product managers, where seat counts vary wildly across organizations.

 Nathan holds their own ▶ 15:10 Host calculates unit economics and MRR live

Nathan demonstrates strong SaaS financial acumen by immediately translating a 12-month CAC payback at $2,000 ARPU into a $24,000 acquisition allowance and deducing estimated MRR.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Weekly Contest Winner and Subscription Promotion 4322 Nathan introduces the interview and probes on whether Pendo is mobile-only and how it compares to Intercom. Todd clarifies that Pendo is primarily for web applications and focuses on in-app user onboarding and guidance campaigns rather than general communication.
The Founding of Pendo and Rally Software Experience 4432 Nathan tries to identify the company Todd previously sold to Rally Software, confusing it with an unrelated 6sense URL. Todd politely corrects him on the spelling and acquisition details, while Nathan offers domain insights into product engagement milestones.
Early Bootstrapping, Seed Round, and Capital Growth 5213 Nathan digs into the startup financing history, identifying the rarity of a million-dollar convertible note in 2013 and joking about holiday closing deadlines. Todd agrees collaboratively with Nathan's framing regarding deal mechanics.
Customer Tiers, Pricing, and Multi-Product Expansion 6436 When Todd playfully deflects a question about customer cohorts by saying all customers are top tier, Nathan openly resets and restates the question. Nathan and Todd then dive into multi-product expansion models versus seat-based pricing.
SaaS Retention Metrics and Net Negative Churn 7455 Nathan calculates CAC payback and extrapolates MRR from customer counts and ARPU. Todd pushes back firmly on confirming revenue figures on air, leading Nathan to defend why transparent benchmarks matter to founders.
Sponsor Break: FreshBooks Accounting and Expense Tracking 2111 Following the mid-roll ad read, Nathan transitions to the Famous Five rapid-fire segment. Todd answers succinctly with minimal friction or debate.
Founder Journey Summary and Interview Conclusion 0000 Monologue outro segment where Nathan recaps Pendo's key metrics, funding, and founding story before delivering sponsor sign-offs.

Statements from this episode (12)

Assertion Supported
Optimizely uses Pendo to analyze and guide trial onboarding
“I think a good example of someone who's using a company people have heard of is Optimizely. Optimizely uses us to one, understand people who are in their trial flow and onboarding flow to help get up and running, start creating experiments. Their team can get …”
Todd Olson Mar 30, 2017 ▶ 2:59
Opinion
How Pendo positions its in-app messaging against Intercom
“I think intercoms focuses more around being a next generation communication platform. Think of our in-app 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 th…”
Todd Olson Mar 30, 2017 ▶ 3:35
Insight
Fast feature adoption directly drives conversion and customer lifetime value
“Every product has a key set of features that, you know, if people get to those fast, they're more likely to either convert to a paying customer and or stay a happy customer and ultimately renew and generate a ton of lifetime value.”
Todd Olson Mar 30, 2017 ▶ 5:26
Assertion Not checkable as stated
Pendo generated zero revenue during its first two years
“Zero year one, zero year two, and then we started making some the next.”
Todd Olson Mar 30, 2017 ▶ 6:35
Disclosure
Pendo has raised $31 million in total funding
“Thirty-one million.”
Todd Olson Mar 30, 2017 ▶ 8:17
Disclosure
Pendo employs 76 people, primarily in the Research Triangle
“76 people.”
Todd Olson Mar 30, 2017 ▶ 8:27
Assertion Not checkable as stated
Pendo's average customer pays over $2,000 per month
“Average amount customers paying us per month is over 2000 dollars a month.”
Todd Olson Mar 30, 2017 ▶ 9:44
Disclosure
Pendo expands primarily by adding products rather than seats
“So we typically land on a single product and we expand when they put us on another product. So take a company like an Infor, you know, we may start with a couple of products, then the product management products will go to their peers and say, Hey, check this …”
Todd Olson Mar 30, 2017 ▶ 10:21
Assertion Supported
Pendo has over 200 customers as of Q1 2017
“We are working with a little over 200.”
Todd Olson Mar 30, 2017 ▶ 12:29
Assertion Not checkable as stated
Pendo maintains an annual revenue churn rate under five percent
“I mean, churn as a percentage is as a percentage of overall revenue is very, very small under five percent.”
Todd Olson Mar 30, 2017 ▶ 13:14
Assertion Not checkable as stated
Pendo achieves net negative churn with net retention over 130%
“We have net negative. Oh, absolutely. Yeah. Yeah. Our net numbers are in the one 40 range. So north of one 30.”
Todd Olson Mar 30, 2017 ▶ 13:35
Assertion Not checkable as stated
Pendo's CAC payback period is approximately 12 months
“Our CAC payback is right around 12 months.”
Todd Olson Mar 30, 2017 ▶ 15:05
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