$70M to $100M in 2.5 yrs: PandaDoc President on growth

0:01We solved it by focusing on a single metric for both sales and marketing. I would never go to another company that doesn't do this. Having a single metric that they align to prevents that friction and prevents the argument. So we do pipeline dollars because it requires both marketing and sales to agree. And that has led to so much teamwork between the teams. And so I highly recommend making sure you're aligned on a single quantitative metric and then build your OKRs around that metric. Welcome to the SaaS Revolution Show, a podcast by SaaS.com. Here we interview SaaS founders from around the world who've been there and done that.

0:39They share the ins and outs of how they built their businesses, their operations, their path for securing investment and more. Our mission with the podcast is to help you, the founder, learn how to scale your SaaS, maintain your well-being and navigate the complexities of this ever-changing industry. I'm your host, Alex Deema, and together we'll explore the good, the bad and the ugly in the journey to SaaS success. SaaS Stock Europe is just 11 weeks away. And this year we're evolving more than a SaaS conference. This year's SaaS Stock Europe is where machine learning meets go-to-market, where funding meets future, where AI meets ARR.

1:20Join 4 ,500 AI and SaaS founders, leaders and investors who are shaping the future of software. Are you ready to build the future? Secure your spot at sasstockeurope.com slash tickets. See you there. I'm very excited. My name is Jenny Gartwa. I can't believe AJ nailed my last name. No one's ever done that. I'm the CEO of a company called GoNimbly. We're a rev ops agency. We work with big clients like Twilio, Zendesk Intercom. And I own a game company, which is a lot less relevant for this crowd. But I'm really excited to share the stage with Keith Rapkin. He is the president of PandaDoc. Do you mind if I do a little intro for you?

1:59I would love that. I've done a little research. Thank you. So Keith has been at really big companies, your Googles, your YouTubes, and he's been from CRO to president of Panadoc. Can I get some hand raises? Who knows Panadoc? Yeah, I love that. Keep your hands raised. Are you a customer of Panadoc? We might change that. That's okay. We've got a lead source. It's actually shocking because they've got over 60 ,000 customers and about 650 employees, sales team of almost 100. Yep. Yeah. And in the past two and a half years, Keith has led them from 70 to$100 million. So I'm very pumped to talk to you about this.

2:40And I wanted to start off. Can you do a little like elevator pitch? A lot of people know Panadoc. So imagine you're going to like the eighth floor. We're not going very high. Give me a little elevator pitch of Panadoc and then maybe a little roadmap peek of anything y 'all are making big bets on. Sounds great. So Panadoc is the all-in-one solution for proposals, quotes, and contracts. And we really streamline that to make your workflow much easier for agreement automation. Most solutions that are out there are actually very painful to use. You may have used some of them. And so we streamline that, make it extremely easy for your customer to say yes to an agreement.

3:17Our roadmap has historically been really focused on the sales use case and getting customers to get quotes out and get those signed very quickly so you can move on with business and concentrate on the things your company does best. we're increasingly moving into CPQ for the more complex quotes, and then gradually moving into contract lifecycle management, where most solutions that are out there today are designed with a lawyer in mind. There's a lot of redlining. It's very painful. Our job is to make that easier for small businesses, especially founder-led companies who make up a large portion of our customer base.

3:51That makes me think of a big hairy question. I'm sorry to say Voldemort's name right now, but you guys go after incumbents, right? So you've gone after DocuSign. I think that's kind of the first part. And then now you're talking CPQ. So you're about to go after the overlord Salesforce. How do you think about going into a space that has an incumbent, that has a giant brand? And how are you creating space? How are you winning? So I think one of the most important things, and I think it's very relevant with this founder audience, is that founders have a purpose. And I'm not a founder, obviously, but I came along to this company and really adopted the purpose of what PandaDoc is, which is empowering small businesses to do the work that they love.

4:35And nobody loves getting their documents out. It's not something anyone enjoys, right? You like the signature. Yeah, you like getting the signature back, but that's like the end of the process. And so when we think about that and what founders do, it's all about passion. Last night at dinner, I was talking to two different founders and they both said they want to be doing this until they're 120 20 years old, right? They love what they're doing. And I think a big part of going after incumbents is making sure you bring that passion. And we try to bring it throughout our entire sales team. Our sales team loves selling our product because they know it brings value to our customers.

5:06Our CX team loves servicing customers and helping them get that value because it, in turn, lets them do their job more effectively. The second thing is about focus. We started out as a proposal and quote tool. And we gradually expanded into contracts and more complex quotes. But being really focused and knowing that kernel that your customers love and then building off that is really important. And then lastly, I would say, you know, a big part of it is not just letting the fish jump in the boat and getting complacent. These big companies, the demand comes to them. But when you are really specific about what you're going after and you target a specific ICP and you build your product for them, the doors kind of open up.

5:50And we actually have a better win rate against DocuSign than we do against anyone else. Okay. I've listened to a few podcasts that you have and you've talked about how at the beginning you actually went too broad. That you started when the product was really blowing up, you went into a bunch of different use cases and then came together. You also have 70 to 80 % of your customer base SMB, but you're also moving up market. How are you balancing that? Your ICP is getting broader. Yeah. So I think one of the interesting things on our journey to a hundred million plus is at some points you have to take a step back and you have to look at where did you get, where did you get complacent?

6:27Where did you get lazy? Where did you start to find easy things that are distracting you from the core mission and what is most effective in your going to market process? And we did that. One of the things we did when I first got there was we started looking at the customer journey to analyze where there was friction. And what we saw is we had, you know, and many people did this in 2022 and 2023. They had just like hired tons of salespeople. They put SDRs on everything. They hired MDRs. You had CSMs, renewal experts, account managers. You just had everyone talking to your customers and it made it really hard for those customers to do business with you.

7:03So we started back with first principles. How do we make it easy for the customer? And that really started to line things back up and accelerate our growth. And we've actually decreased our headcount over the last two years through attrition, but increased our financial results. And I think it really leads to a better outcome for our customers. That's interesting because you came in right at a time when money got expensive and the playbook of doubling your revenue with double your sales team was out. And you have this big focus on efficiency, but how are you balancing creating this efficiency?

7:35I'm assuming your ARR by employee and all that is up. How are you balancing that with getting a really great customer experience, which sometimes means, I don't know, less accounts per CSM or increasing the number of touches, which is more human time. How are you thinking about those two things? Yeah, I mean, I think at some level, you've got to force scarcity and that scarcity is going to give you better choices, like create some pressure in what you're doing from a go-to-market angle. And so what, you know, I'm not a traditional CRO. I didn't come up through a sales background. and as such, I'm not really that focused on how many accounts my sales team has, right?

8:14And so what happens is my sellers are like, I've got too many accounts. I can't handle this. But what we see is actually when we add accounts, these hunters, they get like really focused on the best opportunities. And we've seen really strong growth from doing that. And so I try to make sure that we do it until the pressure is about to burst and then we go make that additional hire. And along the way, I think this is really important is to make sure that your operations are smooth. I know I'm talking to a RevOps professional here, but take stock as you're going, fix the things that are broken.

8:49Because I think oftentimes we use humans to paper up or cover up what is an operational deficiency. And so that can really help make sure that you're streamlined and ready for growth. And it's important that these inflections in your journey to pause, be really deliberate about the expensive resources, which are hiring, and put in place the automation that's going to help you make a great system for your customers. Yeah, but these are all fundamentals. They're the boring stuff. It is boring. I mean, I don't think you get to 100 million without doing the boring stuff. Yeah, you hit a plateau at some point where your growth got you to a certain area, and then it's down to fundamentals.

9:27Okay, the big question when you're somebody who's very focused on operations, fundamentals, are you still making bets on AI for your go-to-market team? Absolutely. I think with AI, if you're not making bets and you're not forcing your team to use it, then you're doomed. But I don't want to jump in. I think it's moving so fast. We've had a couple of our sales team be like, we need this tool right now. And we're always taking a pause. Like, my philosophy is let a thousand flowers bloom. Let a bunch of people experiment with it, find what works, and let the cream rise to the top. That's working really well for us.

10:03and then we're going to pick the winners out of that and use that effectively. We've had some false starts with some things that seemed promising and didn't work out. We've had some real runaway successes. And then in terms of the product, we're really focused on putting AI in a way that's organic to our customers. I don't know about you guys, but I've seen tons of the tools we use just jam AI in our throat, and it's completely unhelpful, meaningless, and just distracts us from getting the job done. For PandaDoc, we want to make sure that we help you get the agreement signed And AI is not there just to make like some flashy marketing statement.

10:39It's there to help you get the job done. And same thing for my sellers. I want to make sure that the AI helps them do their job, not just something that is like distracting. We were talking and saying it's so easy to spot an email that's generated by AI. Let's make sure it's authentic and that it fits into the existing workflow that my team is using. Yeah, and this is maybe a hot take, but all the AI things that we're rolling out are going to become table stakes. And so absolutely, you're getting that initial lift on anything that you do. So I can customize an email and it's going to shine. If you think five years ago, if you emailed me and you were like, Jen, I saw you went to UNC, I might be like, oh my gosh, they know me.

11:19And now if you mention where I went to school, I'm deleting it. And so there is also these tactics that are having this initial push. But again, if they're not focused on the customer, if they're not actually also tied to your competitive advantage, it's not moving the needle. You mentioned that you're having some successes. Can I ask you what those are? The successes we've had with AI really focus on the ICP. To me, almost everything goes back to making sure you understand the customer and then you speak to their pain. Those are two of the most important principles I have in go-to-market. Who's my customer?

11:54Let me be very specific on it. And then what is their pain? A lot of people do feature selling. A lot of people do value selling. I try to do pain selling because I think the avoidance of pain is so much more powerful than the benefit that you get from something. And so one of the successes we had was rolling out an AI tool that identified ICP based on who was in our CRM, suggested lookalikes, and then started with some talking points for our AEs. I would say it like half drafted the outbound for us. And that was a real significant lift in our outbound motion. So that's really powerful. I would say we've had a ton of success with Gong and using Gong conversational intelligence from an AI perspective just to reduce the manual workload.

12:42For me, the most important thing my sellers and CX team can do is spend time with the customer. And I don't want them doing any manual work. So if I can pull that work out of their hands through automation, and it's really simple. It's not like it's anything fancy. It's taking the call transcript, automatically summarizing it and pushing it into our CRM. That really saves us a ton of time. And then they can spend that time researching the customer, making sure they get them to value and getting an extra few calls in or prospecting calls. Yeah. And there's a big focus in all of these around sales and a little bit at CS.

13:15I find a lot of folks that went through the CRO path are VP of sales or glorified VP of sales or only working on that part of the funnel. How are you thinking about top of funnel? How are you thinking about keeping your customers? Do you think about the entire thing? Or like if you had to get percentages on sales, marketing, CS, where are you spending your time? Yeah, so my role at PandaDoc encompasses sales, marketing, and CX. And I spend a lot of time thinking about top of funnel. We are mostly an inbound driven business, although I'm really proud that we've diversified and grown our pipeline into outbound using some of the tactics we just talked about.

13:50But for that top of funnel, I think there's a big part in making sure your customers understand what works for you. And so like the language we speak to them and we speak to them in a category that is defined by a very big incumbent or incumbents. And so they know the brand names. The terms we use or the terms I use, proposal, quote, contract are very generic. So I need to figure out what language really resonates. And so we've built a very fast testing and iterating cycle on our website. And that's where an LLM can really help because we can just draft material, run it out, and we have a ton of traffic.

14:27So we can get significance very quickly and then see how that works. And we translate it all the way into pipeline and leads. And so we'll measure the effectiveness of different language there. And building the muscle to test that even faster is on our roadmap. Do you have the typical friction of sales, marketing, MQLs, anything along those lines? Or how have you fought it? Yeah. So when I got here two and a half years ago, that was my daily battle. I was lucky at the time because marketing also rolled up to me. But we solved it by focusing on a single metric for both sales and marketing. And I would never go to another company that doesn't do this.

15:04Having a single metric that they align to prevents that friction and prevents the argument. So we do pipeline dollars because it requires both marketing and sales to agree. And that has led to so much teamwork between the teams to the point where when I get the VP of sales and the VP of marketing in a room, like they will take the blame for low pipeline themselves and not blame the other one, which I'd love to see. And so I highly recommend making sure you're aligned on a single quantitative metric and then build your OKRs around that metric. Yeah, it's a theme that comes up a lot with you, which is this idea of focus.

15:40I mean, you're bringing the teams and you're focusing on pipeline dollars. Well, you're bringing all that clarity. How do you say no? How do you decide on saying no? How do you make sure that you're staying real focused? I'm actually terrible at that. Can I have 30 bucks? No, my team always tells me, they're like, you tell us to focus and then you're throwing these ideas at us. And I think it's really important to make sure that your team can push back on you in that way. because then when they call me out, I'm like, yeah, you know what? As much as we love driving payments dollars because we've actually started attaching payments into our proposals and allowing you to collect the money, that is not the primary focus right now.

16:17That's like a nice to have. We'll capture it when it comes, but that's not where we're going to focus. And so I think making sure that you think about what your asymmetric bets are. What's the thing where one plus one equals five, not the thing that's one plus one equals two. There's a lot of those out there. So make sure that with your scarcest resource is time, that you spend your time and attention on the things that will have the disproportionate impact. Tactically, is this written somewhere or is this just like you have to reiterate? Is it an ever-changing list that you're saying yes, no to?

16:48How does your team know where they're rowing? I would say I love the phrase repetition doesn't spoil the prayer. Okay. You have to repeat it over and over and over and over again. And we see this with every single team. It's with my leadership team. It's with our sales team. Outbound, outbound, outbound, outbound. Value-based selling over and over and over and over. Marketing, same thing. ICP, ICP, ICP. You don't get distracted and you never stop saying it. So it's not written anywhere, but we just like build it into our mantra. A little bit of a pivot. with that kind of ICP, you do have primarily an SMB product, but I'm assuming you're also trying to go up market and enterprise.

17:36How do you walk that line? Yeah, we've done a really good job of going up market in the last two and a half years, but it does start with understanding who your target customer is and then seeing how you can add additional value. What we did see was that Customers were growing out of us. At Pandadoc, we started out as a very SMB company. And then we saw customers who were using us for quotes and proposals graduating into CPQ. And so it was natural that we wanted to help these customers continue to succeed. And I think the important thing is you don't just jump straight to the top. You add that incremental functionality, you build it slowly, and you launch and iterate.

18:11I think that's something I really learned at Google is you start small, and then you rapidly develop. So that's what we've been doing with CPQ. and that's been really helpful in going up market. And then I think the other thing is just looking for the commonalities. So value-based selling means understanding what is important to your customer and then making sure that you answer that. We always, from the time I've been here and even before, got inbound demand from large customers. What we didn't do a good job of was saying no to customers who didn't fit what we could do. And we always tried to force things.

18:44And I think it's really important to be very honest with yourself. your team and your customers about what you can do because it brings you credibility. And I would much rather have a customer who's going to stay with me for three years than one who's going to come in, be very unhappy, cause a support burden and then churn within a year. And so that's been a big focus for us. But it's hard to turn down cash. Oh, absolutely. Okay. We have one minute and I just want to do a question. You advise companies, you talk to a lot of founders. When you go in, what's something that you look for where you go, hey, this is a founder that's focused in the right areas?

19:17Or where do you find that you have to push and advise? I think with making sure that founders are focused on the right thing starts with going back to the mission. Why did you found your company? What is special about it? And how is it differentiated? There's a lot of startups out there that are in very crowded spaces. And while their mission is good, they may not have that differentiating factor or understand why they're truly better for their customer base. And the ones that are going to win or the ones that I want to back are the ones that have that special something that shows a determination to solve a problem in a way that no one else can.

19:55Because that will stand out in the marketplace. You know, with all the solutions that are out there, when you have that something that separates you and it's very apparent to your customers and in your marketing materials, then you win the business. And it's not the like, oh, I went to a focus group and they told me, you know, my company does this better. It's that one thing that really stands out and separates you. Love it. Okay, Keith, I got much smarter. Thank you very much. Can I get a round of applause for Keith? Thank you, everyone. Thank you. Thanks for listening to the SaaS Revolution Show.

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