Erik Troan is the Co-Founder and Chief Technology Officer of Pendo, a venture-backed software company headquartered in downtown Raleigh. Erik started his career at Red Hat, where he worked as its first engineer and led the engineering team through the development of Linux, RPM and Anaconda, and eventually, the company’s IPO. He later led product marketing at Red Hat and assisted in the acquisition and integration of nine other companies.
Erik went on to found rPath in 2005, which sold to SAS in 2012. He earned a bachelor’s degree in computer science and engineering from NC State University and a master’s degree in economics from the University of Virginia.
1. What is in your pockets?
Nothing special, a set of keys and my wallet.
2. What exciting thing has happened recently for you or your organization?
Pendo works with companies that make web applications, predominantly ones that you’re going to use at work. We help the people who build those web applications understand how their users are using the applications and where they are finding value. We use those analytics to do messaging inside the app for training and onboarding. Web applications are very easy for people to switch from one solution to the other, so product managers in the SaaS space have to be building solutions that are continuing to meet customer’s needs. You don’t understand those needs by watching features. You get it by using those features, measuring, and training and teaching people to use new features to build customer stickiness and add value for SaaS companies.
With all of the changes in the tech ecosystem and the compression of valuations, it puts a lot of pressure on companies like Pendo and other unicorns to start looking at metrics other than growth. Growth was the shining star for a long time—the faster you grew, the faster your valuation multiples would go up. So, you got this cumulative compounding effect on your valuation, and your total company worth. Growing faster was far more important than anything else.
It’s exciting to take a company from one mode to another. There’s been a shift towards paying attention to cash burn, paying attention to headcount and still growing, but what is the cost of growth? It’s a more complicated equation. When you have three or four different things you’re trying to balance, growth is certainly an important component. But it’s not the only component anymore like it was for the first eight years. It’s a new set of challenges and new way of thinking about a company’s success that I find really interesting and exciting.
3. What is your favorite coffee spot?
My favorite place is Benelux in the Village District for two reasons. First, they roast their own coffee and I think they do a phenomenal roast, but they also make easily the best waffles in the Triangle. My favorite time to go there is in the summer on a Saturday morning after a 20-30 mile bike ride with friends.
4. What keeps you up at night?
Pendo collects a lot of data. We collect billions and billions of events every day, trillions of events every year. But data is not useful, information is useful. So, I worry about how we continue to find ways to innovate and make all of the data we’re collecting on how people are using SaaS applications accessible and useful and actionable for product managers who are our customers. At the end of the day, our job is not to collect data, our job is to make our product manager customers successful. So how do we leverage the data to do that?
5. What is your favorite restaurant or happy hour?
Obviously, this is the kind of thing that changes, but for now it’s Cortez. If you haven’t been, it’s a Latin American-style-inspired seafood restaurant with a tapas approach. Everything is always super fresh and super good, and the seafood is locally supplied. They have the best oysters you will find in town, great cocktails and just a fun vibe.
6. What is next for you or your organization?
Sustainability is what’s next for Pendo, to prove that we’re a company that can last for the long term. We’re a company that had hyper-growth and we were trying to go as fast as everybody else to get to be a unicorn. And now we have to prove that we have staying power and continue to add value as a public company. We’re going to continue to grow the offerings and the product value for our customers who have provable ROI in the companies who use us. We’re not a flash in the pan like so many other companies.
