SaaS Interviews with CEOs, Startups, Founders
1216 PandaDoc CEO: "We've passed $1m in monthly bookings"
22 Nov 2018
Chapter 1: What inspired the CEO's entrepreneurial journey from Belarus?
He would have sharpened his people skills earlier on, but it seems to be doing something right. We're 170 people on his team today. Launched in 2011, PandaDoc helping you send proposals and quotes in minutes. They're scaling rapidly.
Chapter 2: How did PandaDoc evolve from its initial launch to today?
A year ago, they had about 7,000 customers. Now they have over 10,000 customers paying on average 100 bucks a month. So they're flirting with that 100 million, sorry, $1 million per month mark. 70% year over year growth, really healthy. $20 million raised. Spending up to 1600 bucks to acquire a customer.
Chapter 3: What are the current customer metrics and growth rates for PandaDoc?
He's comfortable with a 16 month payback period considering they had just raised capital. Healthy Economics, and his team is split between Belarus and the United States. 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 hundred thousand dollars to 2.7 million.
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. 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 Makita Makado.
He was born in a place called Minsk, Belarus, around the time USSR started to collapse. Severe infection with the entrepreneurship bug got him to do things like wash cars when he was seven years old and sell berries when he was 10. Eventually, he got so bad, he had to jump on a plane to the United States where this type of disease not only treated, but also rewarded.
He started multiple software companies, raised many millions of dollars in financing, built amazing teams, and helped dozens of thousands of businesses grow. be more efficient. His project today, PandaDoc.com. Makita, are you ready to take us to the top? Absolutely. You secretly miss those berry picking days, don't you? I do.
I do miss those a lot. It's a lot healthier than sitting in front of your computer. That is true. In case you're considering something like that.
So tell us about the berries you're picking today in the form of PandaDoc. What do you guys do and what's your revenue model? How do you make money?
Yeah, we're a software company that helps to streamline sales documents. Anything from quotes to proposals, contracts, getting those documents generated, delivered, signed, tracked, and so on and so forth. That's our business. We charge per user per month basis. It is a subscription-based software that you can use out of your browser.
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Chapter 4: What is PandaDoc's revenue model and pricing structure?
Okay.
That's pretty healthy though. I mean, you guys are getting up in the, I mean, if you're, if you're close, if you've passed a million bucks a month in bookings, I mean, it's hard to double 12 million in ARR, right?
Well, you can do that. And I think we can do that as well. Um, It's just a matter of, uh, choices that we make, uh, strategically. Uh, we don't see a, um, we don't see that competition wise. Uh, there are a lot of threats. And what do you mean you don't see that?
You know, their growth rates are lower than yours.
We, we know that, um, from the, uh, product perspective and from the, uh, also growth perspective, um, We have a little bit of time, so we choose not to raise a ton of money and be super aggressive at this time. We might change that. That thinking might change, but for now, that suits us pretty well. As long as you're not burning a lot of money and you can become profitable at any point you want,
Um, 70% is good.
Yep. Yep. So, so again, look, 70% year over year growth. Again, if you're around that million ish mark today in MRR, I mean, is it fair to say about a year and a half ago you were doing somewhere around 500, 600, is that generally accurate?
Um, so 500, I think we were at 500 around the way January, 2016 is the time we would talk. Yes. Uh, so January, 2017 is, is that's, that's when we're at, Okay, great.
That's good. Probably a little less than that. That's great. And then as you execute your growth strategy here throughout 2018, it sounds like you have other AppExchange launches coming down the pipeline. What do you hope to drive ARR to? What do you hope to drive your growth at?
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Chapter 5: How has PandaDoc's customer acquisition strategy changed over time?
First of all, we introduced professional service. I don't think we had them at the time we talked. So that helped. The reason we do professional services is, frankly, not to make money, but to ensure that our customers get to value faster. And that helps tremendously. So that's number one. Number two, we increased coverage for our customer success team. What's that mean?
Well, in the past, we started with two CSMs. uh, that focused only on large accounts.
There was customer success managers.
Yeah. Yeah. Yeah. Yeah. Customer success managers. And, uh, today we have a team of eight, uh, that focus on much smaller accounts comparing to, you know, a year and a half ago. And then finally product, uh, product came a long way quarter over quarter. We were fixing bugs and adding features and, uh, polishing UX and onboarding and so on and so forth.
And you can see in the cohort analysis that things get greener and greener and greener, better and better and better. So that obviously helps.
If you guys are like me, it was quite a shock to me when I was building my first company, Heyo, and we reached like 10, 11, 12 people. And all of a sudden I'm going, wait, why am I getting notices from all these states? And that's because I had to file payroll and stuff in these states as we started hiring people from remote locations. It was the biggest pain in the butt. I hated the paperwork.
I hated the payroll. And so now today when I'm launching new companies, hiring new remote employees, I use a company called Gusto. It's very simple. Payroll benefits in HR for modern small businesses. What I like most, and I've timed this, it takes about seven minutes on average for my folks to run payroll. It's got fast, easy to run payroll, including W-2s and 1099s.
I love that they have health benefits and 401ks all built in for nearly any budget. So you kind of just pick what you want. And they've got
expert hr support just to call away so you don't have to hire you know hr people in-house but most importantly it frees up my time so i can go back to my monday.com kanban board print you know plan the next sprint you know put the next spec out on the line and talk to three more customers so
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Chapter 6: What professional services does PandaDoc offer to its customers?
So pitch anything. And what doesn't kill us both those books. Yeah. All right. Number two, Makita, is there a CEO you're following or studying? CDO CEO.
Oh, CEO. Um, is there a CEO I'm following or studying? Yeah. Yeah. So, um, actually I read, um, a lot of stuff that, uh, both founders of HubSpot put out through, um, think right. And I think they got, they got awesome pieces there. Um, And I find a lot of similarities between our businesses. The market we go after is very similar. So I find that content very relevant.
Number three, is there a favorite online tool you have for building your business besides your own and besides HubSpot?
Besides HubSpot? I didn't name HubSpot. Let's see. Let's see.
Just one you use every day.
You got to... Yeah, you got to cut off me being dumb. But what do I use every day? I use my calendar at this point. And I use Google Slides. That's my job. Google Slides. Blah, blah, blah. And put slides together.
Blah, blah, blah more. Good.
That's really all I do.
Number four, how many hours of sleep do you get every night? Eight hours of sleep. That's good because you're at your house right now. You got a little one running around, right? I got two, two little ones and married, right? Yeah. And how old are you? I'm 32, 32. Last question. What do you wish your 20 year old? Yeah, I am. What do you wish your 20 year old self knew?
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Chapter 7: What factors contribute to PandaDoc's customer growth?
Spending up to $1,600 to acquire a customer, he's comfortable with a 16-month payback period considering they had just raised capital. Healthy economics, and his team is split between Belarus and the United States. Makita, thank you for taking us to the top.