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Continuing with yesterday’s post Key Moments in the Life of Pardot, it’s also important to address some of the things we could have done better. Over the course of five and a half years we had a number of opportunities, many for which the appropriate response was saying “no” (see the post Startups Should Say No to 99% of Partnership Opportunities).

Here are some things we could have done better at Pardot:

• At one point we went almost an entire year without adding a net new salesperson, while our business and market continued to grow super fast (we subsequently invested heavily in our sales team and sales recruiters)
• Hosting costs grew significantly faster than revenue for a period of time before we realized that we needed to change our approach, which we addressed and brought inline after six months
• When we hit our stride and started growing fast on an absolute and relative basis, we ramped up hiring slower than possible (it took us time to realize we should be hiring for all major positions, all the time so as to always be opportunistically hiring)
• Our London expansion turned out well but needed much more money than we budgeted to be successful

All issues were high class and great learning experiences. We never strove to be perfect, rather, we worked hard to make the best decisions possible based on the information available.

What else? What are some learning experiences from your startup where you could have done things better?

One of my goals is to document what worked well, and didn’t work well, in the life of Pardot leading to our acquisition by ExactTarget. Looking back, there were a number of key moments and decisions that turned out great and really shaped the growth trajectory of the business.

Of the thousands of big decisions in the first 5.5 years of Pardot, these were some of the most important (dates will be approximate but they are directionally correct):

• December 2006 – Started brainstorming the idea with my co-founder and bought the domain name Pardot.com for $8
• March 2007 – Co-founder and I started working full-time on the business with the original model being a pay per click bid arbitrage platform to generate leads from potential technology buyers and then sell them to technology vendors (like LendingTree for technology leads)
• May 2007 – Pivoted into marketing automation software using most of the code we’d already written for the original product (we were already 60% of the way to a minimum respectable product) and built the product focused on serving the needs of a 25 person software company
• June 2007 – Hired our amazing lead engineer that did an unbelievable job (he was a colleague I’d worked with before)
• August 2007 – Soft launch of our product with a key partner that specialized in SEO and SEM
• September 2007 – Hired an incredible sales leader that did everything we could hope for and more (he replied to our job posting for a junior sales rep on Craigslist even though he had 10 years of experience)
• December 2007 – Signed our first customer, via a partner introduction, and we were off to the races
• April 2008 – Raised prices from $65/user/month to $325/account/month to encourage more user adoption in the organization and to capture value based on other usage params (number and types of modules)
• October 2008 – Signed our 100th customer and knew the business was going to be successful (roughly 1.5 years after starting)
• January 2009 – Added email marketing to the native product functionality after religiously staying away from it (previously we’d connect with third-party email marketing tools to do email but were too limited in functionality)
• July 2009 – Passed $1M in annual recurring revenue and decided it was time to raise venture capital so that we could significantly accelerate our growth (took 2.3 years to get to a $1M run rate)
• November 2009 – Participated in our first Salesforce.com Dreamforce conference (startup sponsorship level with a modest kiosk for a booth)
• December 2009 – Decided to not raise money after talking to 30+ VCs and doing five full partner pitches (sales really took off in Q4 2009 such that it didn’t make sense to raise money based on how fast we could grow organically)
• March 2010 – Raised our prices to $1,000/account/month and included a free quick start services package to on board customers (this was a major game changer since we previous required a $2,500 quick start services package for new customers that created too much friction in the sales process)
• April 2010 – Atlanta Business Chronicle named Pardot the #1 fastest growing technology company in Metro Atlanta with a 42,000% growth rate (it’s easy to grow fast on a relative basis when the first year’s revenues are almost $0)
• June 2010 – Published our company book Think Outside the Inbox, which proved to be more successful than I ever expected
• August 2010 – Participated in our second Salesforce.com Dreamforce conference as a silver sponsor, and, more importantly, at the end of the conference, committed to a $400,000 Dreamforce Platinum sponsorship for 2011, representing a full 50% of our 2011 marketing budget (huge risk but completely worth it)
• December 2010 – Launched our London office through a joint venture
• December 2010 – Passed $5M in annual recurring revenue
• August 2011 – Participated in our third Salesforce.com Dreamforce conference as a platinum sponsor, with one of the best positions on the entire floor, and gave notice to the entire marketing automation market that we were a serious player with strong momentum
• January 2012 – Passed $10M in annual recurring revenue
• April 2012 – Atlanta Journal Constitution named Pardot the #1 place to work in Metro Atlanta
• August 2012 – Inc. magazined named Pardot to the Inc. 500 as the 172nd fastest growing company in the United States
• October 2012 – ExactTarget acquired Pardot

Companies, like everything, have a story to tell and follow an arc that builds on previous experiences. Thousands of important moments occurred over the 5.5 years, with these being some of the most important.

Failing at a startup is never fun. In fact, it’s often emotionally draining and frustrating. Fortunately, for many entrepreneurs I’ve talked to, myself included, failing at a startup always results in amazing learnings. When a startup fails there’s often so much more to learn because a number of tactics were tried and didn’t work. When a startup succeeds and does really well, it’s easy to believe that most of the decisions were right without necessarily learning many hard lessons.

After an entrepreneur fails, often some of the best opportunities emerge, including joining a new startup. Here are some observations about entrepreneurs that have decided to move on to the next venture:

• After a failure, it’s easier to judge what type of team and market you want to be part of for the next venture
• Failure creates more humility and hunger for the next go around
• Often what not to do is easier to define than what to do
• Failure tests whether you really like the startup world or would prefer a different type of environment

Startup failures are a healthy part of the ecosystem, especially when the entrepreneurs reflect on what worked, and didn’t work, and talent is recycled into the next wave of ventures.

What else? What are some other reasons startup failures lead to new opportunities?

Recently I was talking to a friend and he posed the question, “how does life change after a nice exit?” After thinking about it for a second, I quickly replied that things really aren’t any different. This amazing, life-changing event happens and things continue as normal, as would be expected.

Here are some things that do change after a nice exit:

• More people ask you to join their non-profit board, be a startup advisor, give advice, etc
• Local entrepreneur-related organizations ask you to speak (you’re the cool new kid at the party)
• Private wealth managers and investment advisors aggressively seek to manage your money with many different ideas on how to invest it
• Friends, family, and acquaintances realize that this crazy entrepreneur (you) really was on to something and wasn’t just toiling away alone in the basement (things seem so much more legitimate when there’s a large dollar exit attached to it)
• Earning money, for the purposes of making ends meet and having a nice lifestyle, no longer becomes something on the to do list, resulting in more thinking about how to make an impact in your field/community and leave a legacy

In the end, life is about the journey, relationships, higher purpose, and the all the little things. Like a big canvas with only a tiny picture drawn, a nice exit is just an opportunity to continue fleshing out the art.

What else? What are some other ways life changes after a nice exit?