Last year Qualtrics was worth $2.5 billion. A year later it was $8 billion: That is what happens in SAAS. The whole world is waiting for you to fall. If you can just hit that next checkpoint without crashing it will compound. SAAS is like compounding interest.
Switching the name of the company from Survey Pros to Qualtrics was the best thing we ever did. We wanted to do more than just surveys. We could do under the Qualtrics umbrella.
People would criticize the name Qualtrics. They’d say it is not descriptive. They’d say they didn’t know what it is. The reality is people don’t know what anything that anyone is creating is.
SAP was criticized for spending $8 billion on a company no one has ever heard of. There were 300 articles about our IPO and no one heard of us. This may be helpful for Founders: There is this whole rationale around doing fundraising and marketing so people know who you are. They won’t know who you are. So just go out there a build a good business.
We were bootstrapped because we didn’t want outside bosses. Every year that we waited to raise increased our valuation by $100 million.
The longer you can wait the more money you end up with.
Your cap table is your number one asset as a founder and as a company. If my kid was joining a company the number one thing I would say is what does the cap table look like.
I’ve watched really smart founders get lapped by us because they had a bad cap table.
Sometimes an influx of capital can make you take the shortcuts. If we would of had capital, we would have never gone after the academic market. We had to find an efficient way. One that worked at scale before going into the corporate market. The percent of revenue from the academic market went from 100% of our revenues to 10%.
We always had the goal of being number one in whatever market we went into. We wouldn’t go into the market if we didn’t think we could be number one.
There are two things that are happening in tech that scares me. 1) Founders are not thinking long term enough. It is going to take longer than they think. Nothing we have ever done has been shorter than we thought. 2) When your company is valued at over $1 billion or $2 billion, there are not that many companies that can acquire you. And they don’t buy all the time.
You should build your business with the goal to go public. Build your company to be able to do that. Act like there is no other option. If you are not building a company that can go public no potential acquirer will want it anyways. There is always an outlier or two. The fact that we were about to go public made SAP want us more.
One thing I am really proud of is only $30 million of the $8 billion went to people who weren’t in the building. We created more millionaires than any other company I know about.
The most important lesson is you have to have good products that people want to use.
We teach a case study at Stanford about why we turned down a $500 million acquisition. The decision was easy. I talked to my wife. She said, “Ryan you don’t need a bunch of money. I don’t want you home more. Just go for it.” Everyone thinks it is a math equation. After we got the money from this sale there was no emotional reaction. If you think you are going to sell and think you have arrived, you will be seriously let down. It is about building. It is about the journey.
