Unless you’ve been living under a rock, you’ve probably heard a bit about Qualtrics in the past few months. They rocked the MR world and made headlines in investor circles, IT media, and in their native Utah with the announcement of their $70 Million investment from Accel Partners and Sequoia last April. Forbes has all of the details and a wonderful bit of insight into this stealth player that is now a major force in the industry. It’s a pretty inspiring story.
I was able to chat with Ryan Smith, CEO of Qualtrics last year and was immediately impressed by the almost fanatical focus the man evidenced in our conversation. If there was any question in my mind of how Qualtrics had accomplished their recent feats they were dispelled after that conversation. He is the very definition of a visionary leader, cut from the same cloth as a Bill Gates or Steve Jobs: brilliant, tenacious, charismatic and driven. It was a little daunting actually; the man is intense. If you meet him you’ll see what I mean.
Since then I’ve had the pleasure to get to know Ryan and the Qualtrics team more and I continue to be impressed, so much so that I asked them to be a part of the Insight Innovation Exchange in Philadelphia this June and if I could do an interview with Ryan to share with our readers. This is that interview.
I think a lot of those qualities I mentioned shine through here; reading Ryan’s answers is an awful lot like talking with him. I think you’ll be as impressed with the man and the vision he has for Qualtrics (and it’s potential impact on the MR space as a whole) as I have been. This is a leader and a company that we’re going to be hearing an awful lot about in the coming years so pay attention folks; Ryan and Qualtrics are going to be making a big impact on the MR industry.
Here is the interview.
LFM: Thanks for taking the time to chat Ryan! Let’s dive right in with an “easy” one: Qualtrics was flying under the radar for much of the MR industry until you made a big splash with your news last year that the company had secured $70M in venture capital from Accel Partners and Sequoia Capital. Can you share a bit of the Qualtrics story and how you made a deal like that happen?
We’ve actually kept a pretty low profile until now on purpose. We founded the company in 2002, but spent the first four years in a basement. In the early days it was hard to sell what we had and our first customers were academics doing really sophisticated research. We set a goal to get 100 universities on board, and then 250—now 1,300 universities are using Qualtrics, including 95 of the top 100 business schools. It actually turned out to be a brilliant strategy as thousands of MBAs are going to corporations and influencing the buying decisions for enterprise survey software. Our corporate business also really took off during the economic downturn in 2007-2008 when companies realized they needed to listen a lot more to their customers. That’s when we moved out of the basement. Now we have more than 5,000 customers and nearly 300 employees.
Our partnership with Accel and Sequoia is the best-case scenario for us. We didn’t need the capital as we’ve always been a profitable, bootstrapped business, but we wanted partners that shared our same vision for growth. Accel has funded Facebook and Groupon, and Sequoia has funded companies like Apple, Google, and Dropbox. We weren’t going after any funding, but Accel had been reaching out to us for nearly three years. Both firms got excited about our enterprise story and made their largest joint investment ever in us. I think that when you build a good business, it’s easy for people to want to be a part of it. We’ve made some very good long-term decisions that have paid off and the market is really responding. It’s great to have these two partners in the tent with us.
LFM: How has the capital infusion changed the company, especially the company culture?
Our company culture hasn’t fundamentally changed, but it’s always evolving. We are a much better company that we were a year ago (with 100% employee growth) and we’ll be a much better company a year from now. It’s not every day that you can get partners on board like Accel and Sequoia that share the same vision and excitement for the business. Having two of the best firms in the world on our team definitely validates where we’re headed. We have an overachieving culture with people who are not afraid to solve hard problems.
LFM: It seems as if you have built the Qualtrics platform in lock-step with evolving client needs; with that in mind, what’s next in the evolution of your offerings?
We definitely have built what our clients need, but we are also innovating for what they’ll need in the future. The whole stack in the research world is broken. We’re automating the data collection piece and reporting, but we’re also working to really change the way research is being done. A good example is the Qualtrics Site Intercept product we launched last year where we’re empowering marketers to conduct real-time website research, without the need for help from IT. Imagine being able to intelligently target website visitors and get 2,000 survey responses in a matter of minutes. This is a recent example of how we are expanding our platform to really change how people are doing research. And there’s a lot more ahead.
LFM: Looking at all of the buzz topics in the industry right now (mobile, MROCs, big data, text analytics, etc…) what do you think offer the greatest opportunity to the industry as a whole?
In our world, we are seeing an increasing demand from businesses to gather more consumer insight. These buzz topics all help to improve the ability to get real-time intelligence, but I don’t think that in isolation any of these topics are that game changing. Obviously, mobile sets itself apart with the ability to do interesting things and attract a lot more people. Text analytics is a really interesting area, but I don’t think anyone has nailed it yet. I also think that there is a great need for education in the market around Big Data, a topic that can be complex because people aren’t thinking about it the same across industries.
Where we see the greatest opportunity in the industry is in enabling both professional and DIY researchers to gather insight faster, cheaper and better than ever before. We are having great success with a single platform that has all the needed security, scalability and control to share data across the enterprise.
LFM: There has been a lot of news lately about the integration of text analytics and social media measurement into traditional research platforms as an effort to both increase data analysis efficiency and to take a step further along to the vision of “common informational frameworks”. Do you anticipate moving down a similar path?
Our research platform is in a phase of rapid development and movement down the path to fully integrated text and social measurement, classification, and analysis. The ability to access and process social media and text from online communities is really today’s window for viewing social content, and consumer sentiment and intentions. We are heavily focused on expanding our platform for qualitative data classification and predictive analysis in ways that have never been possible before. We view tracking and predicting the movement of markets and consumers as a key component in the research mix that fosters business success and increased customer satisfaction and loyalty.
LFM: The recent news of the Survey Monkey recapitalization at $800M must have been good news for you and your investors. What do you expect to see happen the self-service market over the next year or two?
The SurveyMonkey news highlights the significance and demand for the DIY research model. In the enterprise market where we play, we saw accelerated growth across all major industries last year. We are also seeing that some industries are increasing their demand for insight faster than others, such as healthcare, retail and technology. Our users sent more than a billion surveys using the Qualtrics platform in 2012.
As for the future, we are only in the third inning. We see the self-service market being transformed by the demand for more research better, cheaper, faster. Companies are figuring out that having multiple research solutions and silos of data just isn’t a scalable approach. They need the ability to leverage an enterprise-wide platform in order to collaborate across multiple constituents and departments, as well as consolidate and integrate the systems.
We are seeing this DIY approach benefit not only our corporate customers, but also market research firms looking for an enterprise research platform. As a technology provider, we are helping these firms provide insights faster and better than ever before with the ability to collaborate with their clients and have all data in a central location.
LFM: Is your vision Qualtrics becoming the core insight & analytics platform for client-side organizations regardless of data source or methodology?
Organizations are using Qualtrics as their core insights and analytics platform by taking advantage of our integration with other applications, channels and touch points. Our customers are pushing this pretty hard as they are having tremendous success with a centralized platform. It becomes game changing as they manage different vendors and partners.
LFM: Do you envision Qualtrics developing APIs for 3rd party development or integration with other platforms?
Absolutely. We have several of the most common integrations through our existing API, including CRM vendors like Salesforce.com and web analytics firms like Adobe. As an enterprise application, it is critical that we continue to maintain and expand our APIs and integration capabilities. With so much customer feedback and data spanning an organization, it is important we are able to bring it together in a meaningful way.
LFM: Thinking five years down the road, what is your take on what the research supplier landscape will look like? Will it be dominated by platforms like Qualtrics, new entrants like Google, and analytics firms like MuSigma with what we think of today as market research firms predominately function as service providers and consultants?
The landscape will change as organizations not only need more insights, but are also becoming much more technical. It will be hard for some market research firms to keep charging for technology when it’s not their core competency. They need to charge for what they do best in the world and typically, that’s not technology.
LFM: Much of the supplier community has been taken by surprise by your rapid growth and bold direction. What one thing would you say to them to try to get them to think of you as a partner rather than a threat?
First and foremost, Qualtrics is a technology company. While we may be a threat to some suppliers, we are a great partner for those that are technology driven. We have built great partnerships with innovative firms who are betting on tech for the future. I heard a recent estimate that there is more than a trillion dollars worth of market value trapped in old school software companies that are technically, culturally, and financially incapable of making the transition to the world of tomorrow. Suppliers had better be partnering with the right technology.
LFM: OK, last question Ryan, and we’ll make this a fun one to give folks a glimpse into you as a person vs. the word-dominating business CEO. Fill in the blanks:
1. The last movie I saw was: Argo
2. The last book I read was: “How Will You Measure Your Life?” by Clayton Christensen
3. What’s on repeat on your Mp3 player? Gotye
4. What’s your number 1 leisure activity? Golf
5. Are you a cat person or a dog person? I’m a kid person – three kids under the age of five
LFM: As a fellow dad of 3 kids under the age of 4 (plus 2 teenagers!), I think I am even more impressed with your energy now! Thanks for chatting Ryan and best of luck to you and your team.