SaaS Interviews with CEOs, Startups, Founders
1188 Pega About To Hit $1B in ARR as 30+ Year "Overnight Success"
25 Oct 2018
Chapter 1: What is the main topic discussed in this episode?
stay patient. And boy, has he done it.
Chapter 2: What inspired Alan Trefler to found Pegasystems in 1983?
Founded in 1983. Actually, this was maybe an inpatient move. 1996 IPO-ing, maybe a little early, raising north of $100 million on day one and going, oh my gosh, we now have investors. What do we do here?
Chapter 3: How did Pegasystems navigate the challenges of its early IPO in 1996?
They're doing about $32 million run right then. Fast forward a couple of years into 2000, hired an external CEO to try and drive more growth. Didn't work out so well. So eventually took back the helm in 2010, made a big acquisition to develop out a system that more fully integrated their customer engagement and process automation platform.
They're today doing north of 847 million bucks in run rate, targeting about 900 million. Again, focusing and just staying home on what they know well, which is, again, these enterprise accounts, customer engagement, process automation. This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn.
Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple of hundred thousand dollars to 2.7 million.
Chapter 4: What lessons did Alan learn from hiring an external CEO in 2000?
I had no money when I started the company. It was $160 million, which is the size of many IPOs. We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc.
Chapter 5: What major acquisition did Alan make to enhance Pegasystems' platform?
are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is Alan Treffler. He's a visionary leader and a technology change agent and an innovative philanthropist, a chess master and a trusted advisor to business and executives around the world.
He founded Pegasystems to change the way the world builds software. Today, the company employs nearly 4,500 people around the world and has a market cap of almost $5 billion. Alan, are you ready to take us to the top?
Well, I am.
Chapter 6: How has Pegasystems achieved significant growth in recent years?
Very good. So the reason I told you before, and I was excited to get you on because you are the opposite of like a WhatsApp or even Atlassian. They had, you know, a 14 year run down there out of Sydney, but you really, this was the long haul for Pegasus. Tell us the long, so you launched in what year in 1963 or what was it? 83. 83.
Not by 63, but it could feel that way at that point.
Sorry.
It's in 1983. And where were you at that point in your life? Well, I had been working as a systems integrator, putting together, well, very sophisticated systems for some dead banks like Chemical Bank and some still living ones like Citibank. And I was pretty amazed at how bad the software development process was.
Chapter 7: What unique advantages does Pegasystems offer in the CRM market?
And had the idea of ways to really revolutionize it. The company I was working for was acquired, not a really fun experience. And I struck out on my own.
Yeah, that's great. OK, so 1983, you jump in now. Were you all in or did you save up a cushion from kind of the corporate salary where you had a little fail safe?
I was beyond all in. I had to borrow money from family. And one of the first things I did was take out a $500,000 term life in policy on myself because if this didn't work out, I was going to have to pay this back. I wasn't going to kill myself.
Chapter 8: How does Alan Trefler define success for Pegasystems moving forward?
calculated in an early spreadsheet program that if i worked like a dog and spent no money and lived in a hovel i could pay it back in about eight years yeah and uh that was my that was my plan b so guys those of you listening i want to contrast this to today where last reported a revenue you know 800 900 million ish i want to ask him when he thinks they're going to pass a billion but exciting space built over a long time let's go back to that original story so you take out the initial things what was the initial product alan that you built
Well, it was interesting. It, in many ways, is reflective of what we do today, though after four complete generational rewrites, obviously life has moved on quite a bit. The initial system was what one would have called a workflow system. It enabled you to organize, in that era just for large companies, how you wanted to get your business processes to work.
And it let you define the steps, the systems you had to deal with, the human interactions. And I never liked the word workflow, though it stuck around for a lot of years. I always thought it should be work-do, because we've always sought to incorporate AI principles and incorporate automation into this from the inception. But that was the original idea. And
The way it evolved is we really moved into the front office, being able to do end-to-end work all the way from a customer's customer right through execution.
And then fast, so fast forward, how many decades is that? One, two, three, four decades.
How would you describe the product today? Well, you know, the way I describe the company is we became an overnight success after 24 years. So it took 24 years to hit $100 billion in revenue. And then obviously the business has really been clipping along since then. Today, we're a company that offers technology that does not just
but, you know, which has now been renamed digital process automation, but is also able to do full end-to-end CRM for many of the world's most demanding firms. Being able to bring process and rules and intelligence from the point a customer or one of our client staff touches something related to a customer all the way through execution.
Yeah.
And take so 2000, you said 24 years after 1983. So that would have been 2007. You hit 100 million bucks in NAR. Is that right?
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