Rise to the challenge of scale
With Todd Olson, CEO and Co-founder of Pendo
Startup Victoria’s Growth Club gives scaleup founders access to real-world experience on building a high-growth business, from successful founders, technology executives and investors.
This February, scaleup founders had the privilege to hear from startup veteran Todd Olson, CEO and Co-founder of Pendo.
Todd started his first company, Cerebellum, as a college senior, where he raised $17 million in funding before the dotcom bubble hit. Then in 2008, he sold his second company, 6th Sense, to Rally, where he then worked as VP Product when it went public. For the last seven and a half years, Todd has been at helm of the B2B SaSS unicorn Pendo.
Todd has over 20 years of running high-growth startups, with a treasure trove of advice on how founders need to change as their business grows.
“You can’t keep doing things the exact same way, it doesn’t scale,” he says.
Read on to hear Todd’s advice on how founders can adjust to the challenges that growth presents.
Create a product led organisation
It may seem obvious that startups should be providing their customers with the best possible experience.
But how do founders create those experiences which keep people coming back at scale?
Todd leads Pendo as a product-led organisation. For Todd, this is a framework for driving increased collaboration and agility, faster innovation, and higher revenues.
“Companies should put the product at the center of the customer experience … constantly trying to find ways to evolve from human led processes to ones where your product is leading.”
This, he says, is about more than product-led growth – relying on the product to drive acquisition, conversion or expansion.
Being truly product led aims to minimise the number of human led processes, so that a company can grow and then sustain that new size.
Todd gives the example of human-led onboarding compared to automated onboarding.
A human approach to onboarding involves signing the customer, calling them, setting up each user and walking them through the app manually. By contrast, the automated onboarding process is built into the app.
Of course, the automated approach sounds better on paper, but that may not be the case when you consider the amount of development needed to make it happen.
“There’s an old adage: don’t do things at scale when you’re tiny,” Todd says.
Rather than trying to automate everything as quickly as possible, the founder with a product-led mindset is poised to identify and meet the changing demands of customers as the company scales.
The right approach is less about which is best, than which is right for right now.
Grow with your values
Maintaining culture at scale is a challenge for any founder.
In the early stage startups, you can handpick a team who’ll all work closely together while your business is still small. This stops being possible when the company grows past a certain size.
With that, the company culture will change.
“You’re gonna hire people that take you in different directions.”
This is made even more challenging in a political climate that’s becoming more divisive. Now, founders may have to mitigate between staff with different, strongly held beliefs.
This is a balancing act. Todd knows from experience, that people begin to feel less welcome at work if the company is seen to be picking sides. It’s the job of leadership to make everyone feel like they’re on the same team.
At Pendo, they’ve addressed these challenges by creating open forums for discussion and by revisiting the company’s core values.
“The core values are things that probably shouldn’t change a lot, if ever, in your business.”
He says, even though the Pendo values have mostly stood the test of time, there was something missing that was preventing them from rising to the current challenges.
These challenges were identified by opening dialogue that included people across the company and having the empathy to listen to them.
Meet the demands of scale
In startups, characterised by rapid growth, it isn’t uncommon for the company to outpace the people.
This can be a very personal challenge for founders, when their role outgrows their skill set.
According to Todd, there is a lot of value in having founders remain within the company as it grows. Founders have a unique role to play in scaling culture and tend to be more innovative.
“There’s almost this like moral authority at the business that no person after you is going to have,” Todd says.
This has a measurable effect on the company, which investors recognise and prize.
The question becomes, when should founders push through and when should they move on? As a leader, you need to bring it every day, but it doesn’t do the business any good for a founder to stay on if they are tired or ill suited to the role.
Todd says that, when uncertainty around roles arises, founders and leaders should turn to other leaders for support and guidance.
“I have a CEO coach and a CEO group.”
“We talk about our businesses openly. We share kind of deep dives in certain areas and trust me, impostor syndrome is one of the number one things we talk about,” he says.
Founders have a tendency to expect a lot from themselves and their business.
As a leader, you might ask yourself, would I hire myself for this job?
Even if you say ‘no’, realise that can give you an edge if it motivates you to fight and get better.
Don’t forget to focus on what you bring, rather than fixating on the thing you lack.
“If you still love it, you’re probably adding more value than you think, and it’s OK to walk into something not knowing something, right?”