More and more SaaS companies are going public, but we often don’t get an inside look at what that process is like. As a CEO, how do you know when your company is ready? What comes next? How do you prepare yourself and your companies for growth?
Jennifer Tejada, CEO of PagerDuty, discusses the process leading up to IPO in 2019, her main focus for the company in the years since, and the lessons she’s learned along the way.
Lesson 1: You can’t plan for everything.
Before PagerDuty went public in 2019, we had our clear “why” for doing so. We wanted to demonstrate to the market that we are a viable, long-term platform that could support the largest enterprises in the globe, so those companies could support their customers, too. But just because we had our “why,” doesn’t mean we could guess what came next or how the public would react.
People tend to focus on getting ready [to go public], but at the end of the day, you have to think about what it means to be a public company. What’s going to change? Are those changes positive? Will they help you to scale? Or will those changes get in your way?
For example, Pagey, our mascot, ended up videobombing me during an interview with CNBC. From then on, Pagey became a meme as a part of our IPO—he even had a Fortune article written about him and has an entire public reputation to manage.
While you can’t always anticipate a popular company mascot, you can prepare yourself for what’s to come. My recommendation is to have the next six quarters lined up. You have to have great instrumentation on your pipeline and confidence in your leadership’s performance. For first-quarter reporting, put down the lowest believable number. You want it to be realistic, but you also want to demonstrate to your investors that you can scale and grow.
Make sure to have the next six quarters lined up. It’s not enough to meet your guidance, you have to beat your guidance.
Lesson 2: Going IPO is not an exit event—it’s a launching point for hypergrowth and employee empowerment.
Going IPO is a very important milestone. Sometimes it’s treated more like an exit, but it’s only an exit for private investors. It’s just the beginning for your employees, partners, new investors, and customers.
Think hard about what you want your next milestones to be. For PagerDuty, ours were winning enterprise deals and becoming a $1 billion revenue SaaS company. It was an audacious goal, but it inspired everyone involved to keep doing incredible work.
It’s super important to make sure that once you get through that public crossover, you’re still setting those milestones and audacious goals that get people excited and inspired to do their best work and create incredible products and services. It helps everyone stay focused on the long game.
IPO is not an exit event for checking in with your employees’ satisfaction, either. Manage employee sentiment throughout your growth. They’ll likely be looking at stock prices daily, but remember: On a day when your stock is up 10%, that doesn’t mean you were 10% smarter, just like you aren’t 10% more stupid than the day before when your stock drops 10%.
Help connect employees to a broader purpose outside of the company, too, with something like Pledge 1%. Your public company can be a force for good in the world.
Lesson 3: Be ready to stand behind the tailwinds you set before you went public.
When you’re gearing up to go public, banks and advisors help you build out a narrative for you and your company. One thing you talk about is, what are the tailwinds that are going to support the durability of your company’s growth?
Before going public, PagerDuty landed on tailwinds like cloud adoption and migration, DevOps transformation, and digital acceleration (formerly digital transformation). You share your tailwinds and you hope they’re long term because the public market is going to watch you and ask you to demonstrate those tailwinds came to fruition. Investors need to see value in the money they put into your company.
You need to be ready to stand behind those tailwinds when you come up with them: what they are, why you chose those, and where they’ll take the company. For PagerDuty, the tailwinds we decided on before going public are the ones we still talk about to this day. Don’t forget other, less obvious tailwinds as well, like brand sentiment, word-of-mouth, and employee attrition.
When a PagerDuty employee leaves one company and goes to another, they take PagerDuty with them. Word of mouth has always been good for us, so we see employee mobility as a potential tailwind as well.
Running a public company can be a very lonely job with a big audience. The first thing you need to remember as a CEO is to take care of yourself and your mental, emotional, and physical health first. Put on your oxygen mask before helping your employees with theirs. There’s no structured, predictable day as the CEO of a public company, so it’s important to set your work boundaries and stick to them to do the best work for your company you can.
When you prioritize taking care of yourself, creating and maintaining your company’s ongoing milestones, supporting employee growth, and using your company’s platform to do good for the world all happen a lot easier.
About the speakers
Jennifer Tejada is CEO and Chairperson of PagerDuty and also currently serves as a board member of The Estée Lauder Companies Inc. She’s a SaaStr veteran and has 25 years of experience, spanning mass consumer products to disruptive cloud and software solutions.
Sameer Dholakia sits on PagerDuty’s board of directors, first joining the board in 2019. Mr. Dholakia served as the CEO of Twilio SendGrid at Twilio, Inc., a cloud communication platform, since Twilio’s acquisition of Sendgrid in February 2019, and now as a General Partner at Bessemer Venture Partners