The road to becoming one of the biggest marketing automation companies with a $100M+ exit with David Cummings, co-founder of Pardot

In their early days, startups typically go through multiple rounds of funding. From brand awareness campaigns to product development–and much more—tackling these and other business milestones are usually easier to accomplish with external funding. In some cases, however, certain startups manage to achieve success without any outside funding.

David Cummings, co-founder of Pardot, joins this week’s episode to talk about the tremendous success of his startup. Founded in 2007, Pardot’s co-founders managed to generate $13.5M in revenue without any external funding. On top of that, Cummings and his co-founder sold their company for almost $100M. (Pardot was acquired in 2012 by Salesforce.)

Tune in to this week’s episode to find out more about Pardot’s success, and keep reading to learn about Pardot’s highlights and more difficult moments.

Demonstrating incredible flexibility

Originally Pardot was meant to be a bid management system for Google Adwords (now Google Ads), to generate leads before selling them to business-to-business (B2B) tech companies. Going to market was relatively quick, as team members’ collective work experience allowed them to generate leads within the first few weeks of Pardot’s launch.

In speaking with potential customers, Pardot’s team quickly understood that the company should take a different approach. According to Cummings, their customers wanted to generate the leads themselves, keeping them for their business rather than sharing with other B2B tech companies.

“The customer discovery made it abundantly clear that we were going in the wrong direction, but there was a good direction nearby,” says Cummings. This insight led Pardot’s team to pivot its operations completely, going from developing a bid management system to a marketing automation software.

“There was a lot more engineering work to be done, the product needed to be polished and needed to be used externally,” Cummings recalls.

Setting the right expectations

At the outset, Pardot had four co-founders; however, after only six weeks, once it was clear that the company needed to change its business plan, two of Pardot’s co-founders left the business. Cummings notes that having a six month cliff—or some other agreed upon period of time—is best when starting a business. That way startup founders can set the right expectations.

Pardot’s learnings

While Pardot was extremely successful, especially since it sold at target, Cummings reflects on his time as Pardot’s co-founder and shares some of his learnings.

• Hire the right people. As soon as they got the first version of their product to market, Cummings and his co-founder hired a cold caller to help them scale their business. “We found the perfect person who helped us grow from no revenue to tens of millions of revenue,” he says. “It was an unbelievably lucky successful hire for us.”
• Only commit to what you can. Pardot’s team tried to enter the European market but didn’t have the right resources to be able to commit. In hindsight, Cummings states they should have waited until they could have allocated more resources to the European market. “We opened an office in London, we hired a team, and we didn’t have the resources to do it well,” he says. “We didn’t commit the way I’ve seen other companies do.”
• Seize more opportunities. “We were in an amazing market with the right product at the right time, and our metrics were spectacular,” Cummings says. But even with such impressive metrics, the Pardot co-founder states the company could have seized more opportunities as there was a lot of demand for their product.