Servicing IT: ServiceNow CEO Fred Luddy (Part 4)

SM: Who was your first enterprise customer?

FL: We had a couple of big customers very early. Edmunds.com was a big customer of ours, as was Qualcomm. TIAA-CREF was another. Those companies became a beachhead for us to get follow-on customers such as Hyatt.

SM: What year did you land Qualcomm as an account?

FL: I think that was in 2006.

SM: That’s fairly early in the game to get a marquee customer. What was the revenue ramp from starting your company to getting enterprise deals?

FL: Our revenue is a recurring revenue stream. The first year we did $850,000. The second year we were at $5 million, and in the third year we were $13 million. We finished the fourth year at $28 million. We are now about a $45-million-a-year recurring revenue company. Of course, the year is not over and we expect to grow some more.

SM: How much venture capital did you raise in total?

FL: We raised a total of $7.5 million in venture capital. We’ve been cash flow positive for 36 months.

SM: Tell me a little bit about your journey. What was the process of building a team to support a $45 million, high-revenue company?

FL: A lot of the people we have hired are people I knew from other companies and who I worked with. We have also hired people who have worked for some of our customers. At first I hired about four or five people who were friends and very close colleagues from Peregrine. Then we hired some people from a number of different technology companies to grow out the different areas of our business such as support, operations, sales, and marketing.

Most of the people whom we hired who became the core of the company were people I had known for five to ten years. Another bonus is that the people I originally hired have reached out into their networks, and that’s how we found our second wave of employees. We have been adding more and more employees ever since.

SM: Talk a little bit about your personal evolution. You said that you liked to program day and night. How has that worked for you as the CEO of a sizable company?

FL: One of the great things for me is that we have a wonderful senior management team. They can be relied upon to run the business day-to-day. My job is largely setting the direction for the company from a technology and market approach. I work with various groups of people in different areas to try to take our marketplace up a couple of rungs.

For me, the initial days of the company were a great time. I was able to program 16 to 17 hours a day. That is down to 10 to 15 hours a week now. The balance is very different now. It is very enjoyable for me to meet with customers, come back and meet with the employees, and communicate to them what I sensed about the customer pain points. I influence how we build technology that directly addresses our customers’ pain points. It’s a very exciting job. I don’t get to program as much, but I do get to stay involved in the technology. Overall it has been a good balance for me.

SM: How many enterprise customers do you have now?

FL: About 350.

This segment is part 4 in the series : Servicing IT: ServiceNow CEO Fred Luddy
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