The Ledger
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Lemkin: Bootstrapped and venture SaaS models converge at $10M-$20M revenue
“Somewhere between 10 and twenty million in revenue, depending on your sales motion, the models converge. The models converge. So, if you have twenty million in revenue and you're bootstrapped, and you're willing to spend all 20, right, you can basically hire a…”
Smith: Acquirers will not move without a compelling event like an IPO
“If you're not building a company that can stand up and go public, Then you're probably going to be, no one's going to want it anyways. And you, there's going to be an outlier or two where you're going to point to and say that, but no one ever really, I mean, S…”
Smith: Accel and Sequoia totally underestimated Qualtrics' TAM
“And I think Excel and Sequoia totally shorted our TAM.”
Smith: SAP will pause M&A after $8B Qualtrics deal
“SAP's not buying anything for a while. We took all their powder.”
Smith: Venture funding would have prevented Qualtrics from pivoting to XM
“If we would have just bought our way through, I don't think we would have had that confidence or DNA to pivot the whole company and create this new category of experience management, which is really what SAP wanted.”
Lemkin: VCs Love Bootstrapped Startups for Their Clean Cap Tables
“VCs love bootstrap companies. If you talk to Excel partners, one of the top VCs at all times, they'll say our favorite investments were Atlassian, right, which I think they bought 20% of, bootstrapped. Qualtrics, bootstrapped, on and on. Why do VCs like bootst…”
Cummings: Qualtrics scaled to $500M ARR without primary balance sheet capital
“Ryan Smith from Qualtrics, and he told the amazing story of going from zero to five hundred million of revenue
And not requiring any primary capital. Five hundred million in recurring revenue, and they never raised any money that went to the balance sheet.”
Smith: Marketing and fundraising for brand recognition is futile
“There's this whole rationale of fundraising and marketing that you're going out there so people will know who you are. They're not gonna know who you are. So just go build a good business.”
Ryan Smith: Qualtrics was fully committed to an IPO, not dual-tracking
“I was not running a dual track. I invited 300 of my closest friends to take mortgages on their house to go buy into the friends and family, and then I was like, oh, J slash K, it was like a pump fake, and everyone went flying by, and then we laid it.”
Ryan Smith: Two competitors sunsetted their tech and migrated to Qualtrics
“We've had two of our competitors sunset all of their technology and move everything over to Qualtrics”
Smith: Qualtrics reached $50M in sales with zero PR or media
“For the first 10 years we didn't do one media interview and we got to fifty million in sales. Think about that. Right? Not, not one media interview, not one press release.”
Smith: Targeting academia seeded Qualtrics across the enterprise workforce
“It was the most brilliant thing that we did, and everywhere I go, and we were on the road show and everything, it was, wow, that was the most brilliant model I've ever seen because, you know, millions of academics used Qualtrics and then took it with them into…”
Smith: Spending equity on marketing campaigns is ineffective
“Brand and marketing are different where I see a lot of companies raising around and plugging their cap table into the marketing engine. Yeah, which is like, okay, that campaign was worth five percent of your company. When's that ever been effective?”
Ryan Smith: Only $30M of $8B acquisition went to former employees
“There's eight billion dollars, and only Thirty million dollars of it went to people who weren't in the building at the time of the transaction.”
Smith: Qualtrics wouldn't have targeted academia if it had venture capital
“If we would have had capital, we would have never gone after the academic market.”
Smith: Building software for demanding PhDs prepared Qualtrics for enterprise
“We actually learned to develop great products in that phase because, you know, if you've got to develop a product where a PhD or researcher calls in, Imagine the support system you've got to have on the other side to support Dan Ariely, who is a behavioral eco…”
Smith: Qualtrics grew 47% to $500M in sales prior to SAP deal
“I mean, we grew up 47% last year, five hundred million in sales.”
Smith: Qualtrics rejected a $500M buyout offer at a $50M run rate
“The backstory here is we turned down an acquisition offer for five hundred million dollars in 2012. And I had done, I mean, we were about a fifty million dollar sales run rate, but I'd never done a media interview.”
Ryan Smith: Qualtrics' valuation grew $100M each year they delayed funding
“From 2009, 10 and 11, Every year we waited, our valuation went up a hundred million dollars back then.”
Ryan Smith: Qualtrics staff will earn more post-acquisition than prior 17 years
“Outside of about six or seven people, every single person in the company will make more money over the next five years than they did the prior 17.”
Smith: Qualtrics maintained 122% net retention overall and 140% in enterprise
“And a 122% net retention, and then the enterprise, it's a 140. That, that means that you've got a solid foundation, a solid engine, where people are living and it's mission critical to them.”
Lemkin: Veeva and Qualtrics IPO'd with 70% and 80% Software Revenue Splits
“Viva went public, which is at thirty billion. 7030. Qualtrics was like 8020.”
Qualtrics had one-third services revenue in its $8B SAP acquisition
“Qualtrics went public, and also before they went public, they sold to SAP for eight billion dollars, and, you know, when they, when you look at their S-one they were about to go public before they got bought. They actually had a third of the revenue was servic…”
Lemkin: SaaS founders led Front's $600M valuation round
“The last round in front, which I think was at six or seven hundred million, was all founders. Okay, it was Ryan Smith from Qualtrics, I forget who else, the other billion, our friends, the billionaires of SaaS, but they all, I think, led that round instead of …”
Ryan Smith: Qualtrics raised from Sequoia and Accel at $350M–$400M valuation
“We raised at four hundred million dollars, three hundred fifty million dollars with Sequoia and Excel.”