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HR & Finance
Powered by Battery  |  May 9, 2016
NC Law May Impact Smaller Businesses

Last month, Todd Olson, CEO of Raleigh, NC-based software company Pendo *, wrote a post on his company’s blog criticizing North Carolina’s highly publicized HB2. The legislation–now the subject of dueling federal lawsuits–does away with some protections for lesbian, gay, bisexual and transgender people. Powered by Battery recently caught up with Todd to talk about why he wrote the post and feels so strongly about the issue.

Powered by Battery: Your blog post on the legislation was very powerful. Why, as a CEO, did you feel you needed to write it?

Todd Olson: I thought about this for a while. I took my time; I don’t generally make it a habit of engaging in political debates. But it became clear to me after reading the legislation that I needed to take a position. It just did not reflect our company values or my personal values. Some of the big talking points around the bill relate to safety and protecting children. I’m a father of two young daughters, 8 and 10 years old. I was dismayed that people were leveraging children as an excuse to discriminate against people. I just think discrimination in any form is deplorable. It’s just honestly a sad excuse to discriminate. And I felt our company could be affected as well.

PBB: How specifically could Pendo, which is based in Raleigh, be affected?

Olson: It comes down to the culture we’re trying to create. We’re trying to build a great company in North Carolina. It’s not the Bay Area, it’s not a large, high-tech hub like New York City or Boston. I’ve always thought our way of life here and our people helped give us a competitive advantage that we could really leverage. But to me, this bill threatens our ability to hire great people and build a great culture.

PBB: Are you worried people won’t join Pendo and move to North Carolina because of this legislation? I know in your post you wrote that the bill “does not help Pendo raise money, recruit people, or win customers.”

Olson: Right. We’ve moved four people here from outside the state so far. Getting people to move anywhere is hard. You’re uprooting your life, and often a whole family. It takes convincing. Part of the convincing is the company, but part of it is the area. It’s important to us that all people feel comfortable making the move.

PBB: You also point out that the governor and the state legislature are supposed to be pro-business, and you don’t feel this bill helps businesses.

Olson: Yes. Exactly. It feels hypocritical to me. I’m pro-business as well, and nothing about this bill feels pro-business. If anything it’s had a negative impact. There’s the negative impact you read about in the paper, whether it’s PayPal (withdrawing plans for a business expansion in North Carolina) or Google Ventures (saying it will not invest in companies based in the state) or Bruce Springsteen canceling his concert. Pearl Jam was another one. But there are unforeseen side effects that are also disconcerting. What if someone who’s amazing applies for a job at Pendo and then goes dark (because of the law). We feel like we had a few people who were considering jobs with us who went dark. It’s not 100% correlative, but it could be a factor.

We’re also talking about having our first user conference. We’ve started thinking about, how many of our customers now have travel bans (to the state)? Will this affect their ability to get here? It would cost us a lot more money to have the conference outside our area.

PBB: So in writing the blog post, were you addressing Pendo employees, and prospective employees? Or did you feel like you wanted to send a message to the governor and the state legislature?

Olson: I think my primary audience was around our employees, our prospective employees and obviously our customers. We have a very customer-driven culture. We want them to know we’re going to treat them well no matter who they are. That to me was super important.

And do I want to send a message to the legislature? A little bit. At the end of the day we’re constituents. We all live here. We want to make sure the representatives know this does not reflect our values. We do not feel represented by this.

PBB: What kind of reaction have you gotten since you published the post?

Olson: All positive. I’ve gotten a few emails, a few messages on social media. I’ve also had conversations with local CEOs, some of whom are customers, some of whom are not. I got really positive support. Several people thanked us for making a statement. Before I wrote it, I reached out to a lot of people at the company, and not a single person said, I disagree with you, you shouldn’t do this.

PBB: What do you think will happen to the bill now? Could the governor and legislature change their position?

Olson: I actually met with some legislators last week. I was part of a group of CEOs who went to the state capitol and talked to some state reps about this. I think there is movement to undo at least parts of the bill, or maybe the whole bill. It’s a compromise on both sides, though obviously a highly politicized issue. There are a lot of people who do support overturning it. I haven’t spoken to a CEO in Raleigh who’s for it. Not a single one.

Though I realize I live in a big city in North Carolina, and generally people in big cities are more progressive. It’s highlighting this divide between urban areas and rural areas that we’re hearing so much about.

PBB: I know you’re not from North Carolina—when did you move there?

Olson: I have resided in North Carolina since 2001. So a little over 15 years. I raised kids here, I have a house here. North Carolina is my home. I don’t plan on leaving. I think the thing that’s saddest about this, is that (this bill) is definitely not who we are. It does not reflect the values of the people I spend time with or know. It’s a bit shocking to be honest.

PBB: What job did you move to North Carolina for?

Olson: I moved for TogetherSoft, which had raised venture money from TA Associates in the Bay Area. So pretty much every company I’ve founded or worked for here has taken money from outside this area. This bill makes it that much harder to do that. So it’s also really bad if you’re a new entrepreneur and trying to raise money.

PBB: How many employees does Pendo have now?

Olson: Forty-two today. We expect to grow by another 50% this year. And we added 30 people in the prior six months.

PBB: Remind us exactly what Pendo does?

Olson: We help companies create more engaging software. We capture data about how people are using their software, then help guide their users inside their application to improve the overall experience. We call it product success.

PBB: Well, we wish you much success in the future!

 

*For a full list of all Battery investments and exits, please click here.

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