PagerDuty isn’t Jennifer Tejada’s first time leading a company as CEO.
Tejada had served as CEO of Keynote Systems, a startup that went public during the dot-com boom. When Keynote got acquired by Thoma Bravo in 2013, she went on the lookout for her next opportunity to build and scale a quickly growing business. She met with investors and founders all over Silicon Valley, looked at 51 CEO roles, and finally decided to join PagerDuty in 2016.
Now, after over two years heading PagerDuty, leading it to a $1.3 billion valuation, she was there at the helm when it went public on April 11— even though she had to get back surgery while the IPO process was in full swing. It all came together, though: On its first day of public trading, PagerDuty’s stock soared 56%.
Now, the company currently enjoys a market cap of about $3.9 billion, has over $100 million in annual revenue, serves over 11,000 customers, and is a favorite among IT departments everywhere.
“I don’t know if I have totally unpacked that,” Tejada told Business Insider. “It’s only been a couple of weeks [since the IPO]. There’s a time bound mission you’re on from the time you contemplate engaging in the process to ringing the bell. It’s like a game of Life or a game of Chutes and Ladders. It’s a winding path.”
A big market opportunity
PagerDuty was originally founded by Alex Solomon, Andrew Miklas, and Baskar Puvanathasan — engineers who all had gone through the hassle of being on-call when a system outage or other incident occurred. Indeed, the name of the company is a reference to how IT pros used to carry pagers around to get quick notification of any problems.
Initially, many investors passed on PagerDuty, believing it was too technical for a wide audience, and not understanding the value of a company that sells products for developers.
But in 2010, PagerDuty was admitted to Y Combinator, the famed Silicon Valley startup incubator. From there, PagerDuty and its product started to take off, and investors finally took note: All told, PagerDuty raised about $174 million in venture capital funding in the years before IPO.
By early 2016, though, Solomon wanted to find a CEO to replace him who would be better suited to growing the company into the next stage, so that he could step into the more technical role of CTO.
Tejada says it can be rare to find a founder who is truly willing to hand over the keys to the kingdom and help the new CEO succeed. More often, she says, founders like to bring in a potential replacement as a lieutenant before making the final call.
“There’s a lot of people who want to try-before-you-buy optionality, but I had no interest in being a number 2,” Tejada said. “I’ve been a number 2, and I loved it, but when I was a CEO, I thought, this is the job for me…I’ve had other conversations where [founders] say you’ll run everything except product and finance. And I’m like, well, that’s not really a CEO job, is it?”
Tejada recalls that when she first was getting to know Solomon, they went out to chat over a beer. At the time, Solomon was trying to keep the CEO search under wraps — but this informal meeting almost blew the surprise.
“We’re having a nice conversation and I enjoy hearing about his family, his background growing up, and he suddenly goes fully white,” Tejada said. “I’m like, ‘dude, are you OK?’ He said,’oh my god, a whole bunch of PagerDuty employees came in.’ I’m like, ‘Don’t worry, just say you’re on a date with Mrs. Robinson or something. Let them think whatever they want.'”
Little did those employees know that Tejada would get the nod to become their next CEO.
Tejada and Solomon talked ahead of time about what their new roles would look like. By the time she officially joined as CEO, and he moved over to the role of CTO, they both knew exactly how the transition would go down. She calls him a “phenomenal partner” — one who paved the way for her, rather than simply moving out of the way.
“That to me represents a huge amount of humility, putting the company ahead of myself,” Tejada said. “Me coming on board helps him shift his focus to things he’s passionate about and cares about.”
By the time Tejada joined PagerDuty, it was “already beloved by developers,” she said. Users have told her that they won’t take a job that doesn’t use PagerDuty, or that they introduce the service to their companies. Some even told her that it saved their marriages.
She says one misconception about PagerDuty is that people think it just fixes outages, or that it’s an alert tool that wakes teams up in the middle of the night and disrupts people’s lives. What PagerDuty actually does is proactively address issues before they arise, she says.
“PagerDuty was solving a very big pain point very early,” Tejada said. “One of the other things that’s really interesting is the business is super efficient. It’s one of the hallmarks of our business that we are growing rapidly and are growing efficiently and have always grown efficiently.”
As a leader, Tejada said she often looks to other startup CEOs for advice, such as Zoom CEO Eric Yuan, who took his company public on April 18 — a week after PagerDuty’s own IPO.
There are certain things a business leader might not be able to share with a team or a family, but she says being “open and vulnerable” with other CEOs has helped her learn and grow. She says that she’s a fan of the growth mindset, the philosophy of being open to learning and change espoused by leaders like Microsoft CEO Satya Nadella.
“I spend a lot of time applying a growth mindset to how I think about handling challenges in the business by talking to other CEOs,” Tejada said. “We talk to each other about life. I ask them all my stupid questions…It starts out as peer mentorship but it becomes camaraderie and friendship over time and it solves the lonely-at-the-top problem.”
In addition, Tejada says she’s on a mission to work towards gender balance in the tech industry. Half of her leadership team are women, but she says the company can do even better. She has a list of qualified women candidates — and if she’s not able to hire them at PagerDuty, she has started referring them to others.
“I see us as a company that can be an example of changing the complexion of your company, how you set the tone at the top,” Tejada said. “It starts with me, it starts with leadership, it starts with our board. It starts with not accepting excuses or setting limits. I hear, wow your board is gender balanced. I’m like, I’m not done, there’s more to do.”
Leading PagerDuty to its IPO felt like living in parallel universes, or even training for a marathon, Tejada says. While she was leading the company, she also had to meet with bankers and investors. It was a tough process, made all the worse by a back surgery she had to undergo in December, while the process was ongoing.
“It’s funny, back surgery was a real blessing in disguise,” Tejada said. “It forced me to delegate a lot of operational work and letting go of that has created capacity to focus on product, continuing to think about long term strategy and also think about how I continue to round myself out.”
Finally, IPO day came — and it turned into something of a celebration, capping off all the hard work. After Tejada rang the ceremonial opening bell, an impromptu dance party started up on the podium of the New York Stock Exchange, led by Tejada’s daughter, and her childhood friend, the daughter of PagerDuty CFO Howard Wilson. PagerDuty’s offices in San Francisco and Toronto held their own parties, too.
“You’re up on the podium and ringing the bell, and there’s unbridled joy and pride and wonder,” Tejada said. “People are a little incredulous that they’re there and you see it in their faces. A lot of people are people who never thought this would be something they accomplish in their careers…It was quite an incredible experience.”
But the next day, it was back to work. In her talks with employees, she likened the IPO to a wedding: An important milestone, and a good excuse to celebrate, but only the beginning of the real work.
“The next day, we went back to the two main offices, held town halls, talked about having a wedding celebration but to stay focused on the marriage,” Tejada said.