The SaaS Podcast: Pendo — From Two Failed Startups to $200M ARR SaaS Success

Guest: Todd Olson, CEO & Founder of Pendo
Host: Omer Khan
Episode: 451
Date: September 4, 2025

Episode Overview

This episode features a deep dive into the entrepreneurial journey of Todd Olson, founder and CEO of Pendo, a product experience platform now surpassing $200M in annual recurring revenue (ARR). The discussion explores lessons from two failed startups, shaping Todd's relentless focus on product-market fit, and how a refusal to follow conventional paths resulted in category-defining innovation and commercial success.

Listeners will learn about early missteps, the painstaking manual process of creating a new SaaS category, founder-led sales, radical pricing moves, and the people-centric challenges of scale. The conversation is packed with actionable insights on startup validation, building for ‘pain you know,’ and breaking the conventions that don’t serve your business or customers.

Key Discussion Points & Insights

1. Early Entrepreneurial Background and Lessons Learned

• Origins in Tech: Todd started programming professionally at age 14, working at a bank and immersing himself in customer/stakeholder interaction early.

  • “I packed a suit to high school every single day. I went every single day after high school, put a suit on. I worked pretty much every afternoon, every Saturday.” — Todd Olson [06:38]

• First Startup Failure:

  • Founded Vision Systems/Sara Bellum Software during the dot-com boom.
  • Acquisition deal fell apart after the board took negotiation away from founders.
  • The company pivoted to services; Todd left.
  • “I think there's an adage that time kills all deals. Right. So I live by that now… our board thought we were too young to negotiate a transaction, so they brought in someone else and it sort of killed the deal.” — Todd Olson [10:28]

• Second Startup & Key Mistake:

  • Believed the CEO shouldn’t be technical, so gave the role to a friend from sales (“I felt like an idiot… that didn't work out for a variety of reasons.”)
  • Again, suffered from lack of product-market fit.
  • Acquired by Rally Software for a “soft landing.”
  • “I'm telling you. I read the book Four Steps to the Epiphany… I read it after my first two startups and I felt like it was speaking to me.” — Todd Olson [13:26]

• Obsession with Product-Market Fit:

  • “Once you get product market fit, it hides a lot of other problems, it makes kind of everything else a little bit easier… it's the fit that makes everything else here work.” — Todd Olson [15:40]

2. Birth of Pendo & Identifying the Problem

• Discovery at Rally Software:

  • As CPO at Rally, Todd lacked visibility into how users interacted with products and no ability to guide those stuck.
  • “I was the… Chief Product officer [and] the core Persona that Pendo sells to even today.” — Todd Olson [16:34]

• Scratching Your Own Itch:

  • Todd validated the problem with others and VCs before committing.
  • “If you keep coming back to something, like, you just can't let go of it… maybe you are the person to go start that thing.” — Todd Olson [18:36]

3. First Product Version: Design Decisions and Differentiation

• Auto-Tracking & B2B Focus

  • Rejected manual tracking (“track events”) required by all competitors.
  • Baked in B2B analytics from day one.
  • “I was absolutely convinced that [manual tracking] was a bad idea because I experienced it.” — Todd Olson [20:05]

• Complementary Features—Not Just Analytics

  • Added in-app messaging/guides right away.
  • “I never wanted to be a company just [about] analytics… within weeks after analytics build, we had guides built out.” — Todd Olson [21:03]

• Saying NO to Trends:

  • Refused session-based analytics and track events for five years, even as competitors embraced them.
  • “What you say no to is what creates opinions and products.” — Todd Olson [23:38]

4. Go-to-Market & Founder-Led Sales

• No Inbound Playbook:

  • “No one was searching for ‘product analytics plus in app guidance in the same package’… it wasn't a category.” — Todd Olson [24:55]

• Manual, Network-driven Early Growth:

  • Used his VC network for warm intros.
  • Reached out directly to Heads of Product on LinkedIn (“Hey, I'm a former head of product, I had this pain. Do you have this pain?”)

• Installations as Primary Metric

  • Focused on number of real business installs, not signups.
  • “For the first year… we only measured installs.” — Todd Olson [25:38]

• First Customer & Pricing

  • Identified heavy usage, called them, and converted to $500/month customer.
  • “You're giving this to your board directors. You should probably pay for this, shouldn't you?” — Todd Olson [27:00]

5. Scaling, Sales, and Relentless Focus on Fit

• Stubborn Founder-Led Sales

  • Refused to hire salespeople until the sales motion was repeatable and product-market fit was clear (around $500k ARR).
  • “I just kept saying no… I think I need to continue validating it.” — Todd Olson [28:05-31:14]

• Iterative Product Development with Customers

  • Used sales cycles to gather product feedback, sometimes building features on the fly to close deals.

• Insights on Product-Led Growth (PLG) and Timing

  • Despite writing about PLG, Pendo itself didn’t implement full PLG until much later.
  • Created a new category, so initial GTM depended on manual education.
  • “When things are working… like the sales team worked… when you're tripling your ARR, you're not looking to mess around with it a ton.” — Todd Olson [31:37-34:46]

6. Defining the Ideal Customer & Moving Upmarket

• Original ICP Assumptions & Reality Check

  • Targeted startups but realized larger companies valued and were willing to pay for the solution.
  • “It takes the same amount of time to close a bigger company… we just get like five, six times more revenue.” — Todd Olson [35:35]

• Building a Category: Educating the Buyer

  • Remained focused on product teams, even when marketing departments looked more lucrative.
  • “That buyer was the right buyer for us over time. So I think that was a big part of our challenge. I think it's a big part of our challenge today.” — Todd Olson [36:50]

7. Game-Changing Pricing Decisions

• Priced to Value, Not Volume

  • Early days: $99/month, thinking volume game.
  • Realization: Cheaper customers weren’t as successful, were harder to support.
  • “I came to work and I said our minimum price point is going to be $1,000 per month. And everyone freaked out… But guess what, we sold just as many deals now at 10x price.” — Todd Olson [38:22-40:22]

• Pricing as Growth Lever

  • Strategic increases forced the company upmarket, increased perceived value, and fueled rapid ARR growth.
  • "If someone's just buying me because I'm the cheapest thing. I'm going to get treated like the cheapest thing. So no, I think it’s been great for us." — Todd Olson [40:22]

• Return to Free (“Freemium”) at Scale

  • Added free tier only after brand/category education caught up.
  • “Now we reintroduced free. But look at the average Pendo customer pays almost 100k average.” — Todd Olson [41:44]

8. The Hardest Challenge: People and Scaling

• Team Building is the Most Difficult Part
  • “The people stuff, getting the people right, finding the right people, scaling… that's ultimately been my toughest decisions, my biggest mistakes. What's probably held the company back the most over time has been that.” — Todd Olson [42:30]
  • Personally conducted 800 interviews, eventually stopping out of necessity but recognizing teaching others is critical.

9. Lightning Round (Selected Highlights)

• Best Business Advice:

  • “Focus on prioritize the things that only you can do in the org.” — Todd Olson [44:21]

• Book Recommendation:

  • “Good to Great. Jim Collins. Masterclass. Amazing.” — Todd Olson [44:50]

• Top Founder Trait:

  • “Grit. I mean, yeah, it's what you need.” — Todd Olson [45:02]

• Productivity Tool:

  • “Right now it's like ChatGPT is pretty damn useful.” — Todd Olson [45:09]

• Personal Fun Fact:

  • “I have six kids.” — Todd Olson [45:37]

• Passions Outside Work:

  • “Food and wine. Outside of my kids too, of course. I love my kids.” — Todd Olson [45:47]

Notable Quotes & Memorable Moments

• On Change & Adaptability:

  • “If you don’t like change, you’re really going to hate extinction.” — Fred Smith, cited by Todd Olson [04:19]

• On Product Choices:

  • “What you say no to is what creates opinions and products.” — Todd Olson [23:38]

• On Scaling Sales:

  • “I just kept saying no [to hiring salespeople]… I think I need to continue validating it.” — Todd Olson [28:05]

• On Pricing Transformation:

  • “Our minimum price point is going to be $1,000 per month. And everyone freaked out… But guess what, we sold just as many deals now at 10x price.” — Todd Olson [38:22]

Timestamps for Key Segments

• Todd’s background, first programming job — [06:38]
• Dot-com startup, first exit failure story — [10:28]
• Lessons in product-market fit, Steve Blank’s influence — [13:26]
• Rally Software: discovering the Pendo itch — [16:34]
• Early product decisions, what to build/avoid — [20:05]
• Manual early GTM, leveraging personal network — [24:55]
• First paying customer, early pricing — [27:00]
• Relentless founder-led sales philosophy — [28:05-31:14]
• PLG and building a category — [31:37-34:46]
• Ideal customer profile evolution — [35:35-37:56]
• Bold pricing moves and outcome — [38:22-41:44]
• Scaling challenges: people and hiring — [42:30]
• Lightning round — [44:10-45:57]

Summary Takeaways & Actionable Insights

• Validate your idea relentlessly and obsess over product-market fit before scaling.
• Don’t be afraid to reject industry conventions if they don’t serve your users or vision.
• Sales-led GTM can work powerfully, especially when building new categories—manual outreach and founder selling is invaluable learning.
• Pricing is a growth lever, not just a sticker; bold, strategic pricing often pays off.
• Scaling is about people. Hiring right is the hardest and most impactful challenge.
• Building for your own pain can lead to deep customer empathy and product resonance.
• Creating a new category is as much about education as product—expect heavy manual lifting before PLG can work.

For more insights, connect with Todd Olson at todd@pendo.io or visit Pendo.io.