CEO Jennifer Tejada just took PagerDuty public; we talked about the roadshow, the IPO and what comes next

PagerDuty debuted on the New York Stock Exchange today, and as we type, shares of the nine-year-old, San Francisco-based incident response software company are trading at nearly $39.
Thats up more than 60 percent above their IPO range of $24 per share, which was itself adjusted from the range of $21 to $23 that had been expected earlier and gives the company a valuation of close to $3 billion. Thats an awful lot for a company whose software helps technical teams at 11,000 companies spot problems with applications and respond to incidents. Though its growing quickly revenue was up 48 percent last year it still pulled in just $117.8 million in 2018. Meanwhile, its net loss widened last year, to $40.7 million from $38.1 million in 2017.
Certainly, its performance has to make the companys investors who last assigned the company a valuation of $1.3 billion back in September very happy. Some of the VCs poised to win big if PagerDutys shares continue flying high include Andreessen Horowitz, which owned 18.4 percent of PagerDutys shares sailing into the IPO; Accel, which owned 12.3 percent; and Bessemer, which owned 12.2 percent. Other winners include Baseline Ventures (6.7 percent) and Harrison Metal (5.3 percent).
Its also exciting for CEO Jennifer Tejada, a proven operator who was brought in to lead PagerDuty in 2016 and now becomes part of a small but growing club of women CEOs to take their tech companies public, including Katrina Lake of Stitch Fix and Julia Hartz of Eventbrite.
We talked with Tejada earlier today about the companys big day. In addition to crediting company co-founders (and shareholders) Andrew Miklas and Baskar Puvanathasan, both of whom have since left the company, Tejada thanked PagerDuty co-founder Alex Solomon, who remains the companys CTO. She also told us a little bit about what today has been like, and how the IPO changes things and doesnt. Our chat has been edited for length.
TC: First and foremost, how are you feeling?
JT: Its been an incredible day. Its been an incredible several months. You have to enjoy it when its going well.
TC: How does the vision for the company change now that its public? Have you been thinking ahead to possible acquisitions?
JT: The vision doesnt change. We intend to do exactly what weve been doing, which is to provide the best real-time operations platform available to companies as they undergo digital transformation to meet the growing demands of their customers. We think were [facing] an early and very large opportunity that will be available to us for a long time. So our job continues to be to build great products, stay close to our customers, expand regionally and continue doing what has allowed us to be a successful private company.
TC: You and I had talked about the challenges of retaining employees in San Francisco when we sat down together in November. Its a battle for every local company. How do you keep employees beyond the lock-up period? How do you ensure they stay focused on performance and not your share price?
JT: I think that mindset of, Its all over when you go public, is kind of a Silicon Valley fable. If you look at the most successful SaaS companies on the planet, theyve gained 10x, 20x, 30x their value post their IPO. I also think what employees look for ahead of their financial success is career success. Am I being developed and recognized and can I build my career at this company? And weve worked really hard to create those career opportunities for our employees who [I think see, as I do] the IPO like a racing boat pushing off the dock, across the starting line, and into the open ocean, where the next adventure awaits.
In the meantime, weve already lessened our reliance on [overheated job markets] by opening offices in Toronto and Atlanta and Seattle and London and Sydney, even while were still hiring in San Francisco and Seattle.
TC: Obviously, Lyfts shares have been up and down, owing to short sellers. Have you been monitoring short interest? Are you at all concerned about investors driving the price sky high, then selling it on the way down?
JT: I havent even looked at the stock price in the last several hours . . . There are a lot of things outside of my control, and the free market is one of them.
TC: PagerDuty is rare in that is doesnt have a dual-class structure, which can greatly empower leaders over everyone else associated with a company. Presumably, this is a great relief to your investors; I just wonder whether it was ever a consideration?
JT:Im a little bit of a traditionalist. Ive been around long enough to know how checks and balances work, and a single-class structure made sense for PagerDuty. Also, dual-class structures tend to emerge more when you have deeply involved founders, and though Alex is still very much a part of the business, PagerDutys other two founders have worked outside of the business for some time.
TC: You have plenty of operating experience, including previously running Keynote Systems, but youve never taken a company public. Were there ways in which you found the roadshow experience surprising?
JT: I was surprised by how fun it was! [Laughs.] When you have a great story, and a great partner helping you tell it in my case thats [PagerDuty CFO] Howard Wilson, who Ive worked with for 10 years its great. We had a great reception from investors. I loved our IPO team; our [top bank underwriting teams] were both led by women and whenever I had a question, they [had the answer]. I also had this cocoon of experience surrounding me thanks to our board. If anyone tells you that [in this position] they are super comfortable, theyre either lying or [clueless] but I was very lucky. I also have a whole bunch of buddies who are CEOs [and other executives] in SaaS and Ive been shaking them down for advice for months, so I felt well-prepared.
TC: What was some of the advice you received from those friends about how your life is about to change?
JT: Some of it was about the need to keep people focused and not get distracted, to remind everyone that this is a milestone, not the goal. [Some centered on] surrounding yourself with a great team and the importance of great investor relations, a function you dont have as a private company but that can create huge value and provide support and understanding of the market.
One CEO said to just make sure you keep having fun, to try and stay you, to find joy in the same things as before. There will be stressful moments and tough questions thats true of any company thats scaling but I heard a lot of advice about just taking care of myself, including on the roadshow. In fact, there were a lot of really supportive notes and private tweets that, in a job that can feel lonely, made me feel not alone, and Im very appreciative of that.
TC: People call IPOs just another funding event, but thats kind of baloney, isnt it? If you had to list the most meaningful moments in your life on a scale from 1 to 10, 1 being the most important, where might today fall? Would today be up there on that list?
JT: When I think of most meaningful moments, I think of the day my daughter was born, and my wedding. Another day that was very meaningful to me was when I approved our pledge to donate one percent [of PagerDutys equity, one percent of its product and one percent of employees time] to social impact. We did it a lot later in the game than some companies; our equity was already valuable. But we knew that it was going to create meaningful impact over time.
But yes, it is a gratifying day, especially for the co-founders who were pulling the idea together for PagerDuty a couple of years before they even launched it, and for employees whove been with the company for nearly as long and who turned down safer and higher-paying jobs along the way. Seeing their joy today that is a memory that will be in my top 10 for sure.
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