StarZero All shows Try the podcast clipper →

Feb 10, 2018 · 28m · top-founders

931 Qualtrics "Well Past" $250m in ARR, When Will The Go Public?

Ryan Smith · 18m spoken Nathan Latka · 7m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of The Top Entrepreneurs Podcast, host Nathan Latka interviews Qualtrics co-founder Ryan Smith about scaling the company past $250 million in ARR, turning down a $500 million buyout, and preparing for an IPO through disciplined product-led growth.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 27.6% of the talking time here. How this is scored →

Nathan as informed peer 5.8 Guest teaching 5.2 Guest disagreement 2.4 Nathan pushing back 4.0
05100:0010:0020:000:49–5:35 · Nathan as informed peer 5/10 Rejecting a $500 Million Acquisition Offer Nathan opens by digging into the rationale behind turning down a 500 million dollar acquisition offer. Ryan explains the emotional and strategic mindset behind building Qualtrics into a long-term enterprise platform, setting an agreeable and reflective tone.5:36–12:57 · Nathan as informed peer 7/10 Scaling Past $250M ARR and Preparing for an IPO Nathan presses Ryan hard on hitting 250 million ARR, comparing his IPO timeline to MuleSoft and guessing filing dates. Ryan pushes back playfully, explaining that Qualtrics intentionally capped valuation at 2.5 billion to optimize for partners and liquidity over vanity metrics.13:00–18:00 · Nathan as informed peer 6/10 Sponsor Interlude: SignEasy Electronic Signature Tool Nathan asks about historical growth milestones and suggests using LOIs as aggressive leverage against VCs. Ryan reframes the dynamic, arguing that high cash-flow businesses do not need leverage games and that treating investors as adversaries creates bad partnerships.18:00–23:18 · Nathan as informed peer 6/10 XM Platform Expansion and Real-Time Experience Data Nathan investigates the newly launched XM platform, drilling into net retention metrics and expansion priorities. Ryan explains the convergence of employee and customer experience data and dismisses artificial segmentation of SaaS metrics.23:19–25:30 · Nathan as informed peer 5/10 Unit Economics, Long-Term Bets, and Academic Product Flywheels Nathan asks how Qualtrics maintains rationality around unit economics and payback periods. Ryan educates on playing the long game, showing how an unprofitable academic focus created an unexpected enterprise distribution pipeline when students graduated.0:49–5:35 · Guest teaching 4/10 Rejecting a $500 Million Acquisition Offer Nathan opens by digging into the rationale behind turning down a 500 million dollar acquisition offer. Ryan explains the emotional and strategic mindset behind building Qualtrics into a long-term enterprise platform, setting an agreeable and reflective tone.5:36–12:57 · Guest teaching 5/10 Scaling Past $250M ARR and Preparing for an IPO Nathan presses Ryan hard on hitting 250 million ARR, comparing his IPO timeline to MuleSoft and guessing filing dates. Ryan pushes back playfully, explaining that Qualtrics intentionally capped valuation at 2.5 billion to optimize for partners and liquidity over vanity metrics.13:00–18:00 · Guest teaching 6/10 Sponsor Interlude: SignEasy Electronic Signature Tool Nathan asks about historical growth milestones and suggests using LOIs as aggressive leverage against VCs. Ryan reframes the dynamic, arguing that high cash-flow businesses do not need leverage games and that treating investors as adversaries creates bad partnerships.18:00–23:18 · Guest teaching 5/10 XM Platform Expansion and Real-Time Experience Data Nathan investigates the newly launched XM platform, drilling into net retention metrics and expansion priorities. Ryan explains the convergence of employee and customer experience data and dismisses artificial segmentation of SaaS metrics.23:19–25:30 · Guest teaching 6/10 Unit Economics, Long-Term Bets, and Academic Product Flywheels Nathan asks how Qualtrics maintains rationality around unit economics and payback periods. Ryan educates on playing the long game, showing how an unprofitable academic focus created an unexpected enterprise distribution pipeline when students graduated.0:49–5:35 · Guest disagreement 1/10 Rejecting a $500 Million Acquisition Offer Nathan opens by digging into the rationale behind turning down a 500 million dollar acquisition offer. Ryan explains the emotional and strategic mindset behind building Qualtrics into a long-term enterprise platform, setting an agreeable and reflective tone.5:36–12:57 · Guest disagreement 3/10 Scaling Past $250M ARR and Preparing for an IPO Nathan presses Ryan hard on hitting 250 million ARR, comparing his IPO timeline to MuleSoft and guessing filing dates. Ryan pushes back playfully, explaining that Qualtrics intentionally capped valuation at 2.5 billion to optimize for partners and liquidity over vanity metrics.13:00–18:00 · Guest disagreement 3/10 Sponsor Interlude: SignEasy Electronic Signature Tool Nathan asks about historical growth milestones and suggests using LOIs as aggressive leverage against VCs. Ryan reframes the dynamic, arguing that high cash-flow businesses do not need leverage games and that treating investors as adversaries creates bad partnerships.18:00–23:18 · Guest disagreement 2/10 XM Platform Expansion and Real-Time Experience Data Nathan investigates the newly launched XM platform, drilling into net retention metrics and expansion priorities. Ryan explains the convergence of employee and customer experience data and dismisses artificial segmentation of SaaS metrics.23:19–25:30 · Guest disagreement 3/10 Unit Economics, Long-Term Bets, and Academic Product Flywheels Nathan asks how Qualtrics maintains rationality around unit economics and payback periods. Ryan educates on playing the long game, showing how an unprofitable academic focus created an unexpected enterprise distribution pipeline when students graduated.0:49–5:35 · Nathan pushing back 2/10 Rejecting a $500 Million Acquisition Offer Nathan opens by digging into the rationale behind turning down a 500 million dollar acquisition offer. Ryan explains the emotional and strategic mindset behind building Qualtrics into a long-term enterprise platform, setting an agreeable and reflective tone.5:36–12:57 · Nathan pushing back 6/10 Scaling Past $250M ARR and Preparing for an IPO Nathan presses Ryan hard on hitting 250 million ARR, comparing his IPO timeline to MuleSoft and guessing filing dates. Ryan pushes back playfully, explaining that Qualtrics intentionally capped valuation at 2.5 billion to optimize for partners and liquidity over vanity metrics.13:00–18:00 · Nathan pushing back 4/10 Sponsor Interlude: SignEasy Electronic Signature Tool Nathan asks about historical growth milestones and suggests using LOIs as aggressive leverage against VCs. Ryan reframes the dynamic, arguing that high cash-flow businesses do not need leverage games and that treating investors as adversaries creates bad partnerships.18:00–23:18 · Nathan pushing back 4/10 XM Platform Expansion and Real-Time Experience Data Nathan investigates the newly launched XM platform, drilling into net retention metrics and expansion priorities. Ryan explains the convergence of employee and customer experience data and dismisses artificial segmentation of SaaS metrics.23:19–25:30 · Nathan pushing back 4/10 Unit Economics, Long-Term Bets, and Academic Product Flywheels Nathan asks how Qualtrics maintains rationality around unit economics and payback periods. Ryan educates on playing the long game, showing how an unprofitable academic focus created an unexpected enterprise distribution pipeline when students graduated.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 49.6% · guest 50.4%0:00 · Nathan 49.6% · guest 50.4%3:00 · Nathan 18% · guest 82%3:00 · Nathan 18% · guest 82%6:00 · Nathan 29.4% · guest 70.6%6:00 · Nathan 29.4% · guest 70.6%9:00 · Nathan 24.7% · guest 75.3%9:00 · Nathan 24.7% · guest 75.3%12:00 · Nathan 30.6% · guest 69.4%12:00 · Nathan 30.6% · guest 69.4%15:00 · Nathan 28.8% · guest 71.2%15:00 · Nathan 28.8% · guest 71.2%18:00 · Nathan 17.1% · guest 82.9%18:00 · Nathan 17.1% · guest 82.9%21:00 · Nathan 13.9% · guest 86.1%21:00 · Nathan 13.9% · guest 86.1%24:00 · Nathan 23% · guest 77%24:00 · Nathan 23% · guest 77%27:00 · Nathan 60.8% · guest 39.2%27:00 · Nathan 60.8% · guest 39.2%
Sharpest disagreement ▶ 16:38 Rejecting the adversarial VC leverage playbook

Ryan rejects Nathan's suggestion to use an acquisition LOI as VC leverage, stating that founders who build profitable companies do not need leverage games and should not treat partners like adversaries.

 Hardest push from Nathan ▶ 9:54 Pressing on the MuleSoft pre-IPO timeline

Nathan calls out Ryan's smirk and explicitly matches Qualtrics' funding round to MuleSoft's pre-IPO timing to pin down an exact January 2018 filing date.

 Biggest teaching moment ▶ 24:21 Academic loss-leader turning into enterprise goldmine

Ryan educates Nathan on why short-term payback metrics would have killed their best growth channel, detailing how serving unpaid universities seeded the enterprise software buyers of tomorrow.

 Nathan holds their own ▶ 7:04 Revealing the deliberate lowball ARR interview technique

Nathan demonstrates his interviewing expertise by revealing he purposely lowballed the 250 million ARR figure so Ryan would feel comfortable confirming they had already surpassed it.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Rejecting a $500 Million Acquisition Offer 5412 Nathan opens by digging into the rationale behind turning down a 500 million dollar acquisition offer. Ryan explains the emotional and strategic mindset behind building Qualtrics into a long-term enterprise platform, setting an agreeable and reflective tone.
Scaling Past $250M ARR and Preparing for an IPO 7536 Nathan presses Ryan hard on hitting 250 million ARR, comparing his IPO timeline to MuleSoft and guessing filing dates. Ryan pushes back playfully, explaining that Qualtrics intentionally capped valuation at 2.5 billion to optimize for partners and liquidity over vanity metrics.
Sponsor Interlude: SignEasy Electronic Signature Tool 6634 Nathan asks about historical growth milestones and suggests using LOIs as aggressive leverage against VCs. Ryan reframes the dynamic, arguing that high cash-flow businesses do not need leverage games and that treating investors as adversaries creates bad partnerships.
XM Platform Expansion and Real-Time Experience Data 6524 Nathan investigates the newly launched XM platform, drilling into net retention metrics and expansion priorities. Ryan explains the convergence of employee and customer experience data and dismisses artificial segmentation of SaaS metrics.
Unit Economics, Long-Term Bets, and Academic Product Flywheels 5634 Nathan asks how Qualtrics maintains rationality around unit economics and payback periods. Ryan educates on playing the long game, showing how an unprofitable academic focus created an unexpected enterprise distribution pipeline when students graduated.

Statements from this episode (10)

Assertion Not checkable as stated
Smith: Qualtrics had 160,000 NPS studies running by 2012
“And, you know, we wake up in 2011 after a bunch of hard work with [309] Ryan Smith: You know, 2012 with 160,000 net promoter studies or NPS studies running on Qualtrics and people being able to metric and kind of power their business of experienced data.”
Ryan Smith Feb 10, 2018 ▶ 5:05
Assertion Supported
Smith: Qualtrics has 9,000 brand customers paying up to $6M annually
“Yeah, paying customers, and these are brands. These are, I mean, we have a lot more customers in the brands, but they, you know, if you look at 9000, then you look at, you know, they're paying anywhere from 12,000 all the way up to, You know, five, six millio…”
Ryan Smith Feb 10, 2018 ▶ 6:39
Assertion Supported
Smith: Qualtrics has already surpassed $250M in ARR
“I think we already have. Good. I asked that question very specifically. What I found is if I underestimate a little, a founder feels much more comfortable going, we just broke that versus. We're good. That's in the rear of your view mirror.”
Ryan Smith Feb 10, 2018 ▶ 7:11
Assertion Supported
Smith: Qualtrics is and has always been cash-flow positive
“Makeup that we have at Qualtrics where we're cashflow positive. We've always been, it was really nice to be able to say, Hey here's an opportunity to have some liquidity and, you know, kind of get acclimated a little bit to what life is going to be like for a…”
Ryan Smith Feb 10, 2018 ▶ 10:46
Disclosure
Smith: Qualtrics left $100M valuation on table during Series A
“I mean, in our series A, we raised, you know, seventy million dollars. We took, we left a hundred million extra valuation on the table from a credible party because we care about, you know, who we're going to battle with, and I think that's what we've always …”
Ryan Smith Feb 10, 2018 ▶ 12:26
Assertion Not checkable as stated
Smith: Qualtrics maintained 100% growth and profitability from 2006 to 2009
“We operated it with a hundred percent growth and being profitable through 2006, seven, eight, nine.”
Ryan Smith Feb 10, 2018 ▶ 15:34
Assertion Not checkable as stated
Smith: Qualtrics had seven term sheets and an acquisition offer in 2011
“When someone rolls into the valley in 2011 with a pretty high run rate kicking off that kind of cash, you don't need leverage, right? I mean, we didn't even really meet when we had seven term sheets and an offer to sell the company.”
Ryan Smith Feb 10, 2018 ▶ 16:39
Assertion Supported
Smith: Qualtrics powers all feedback for healthcare.gov
“We power all the feedback for healthcare.gov and, you know, thousands of brands.”
Ryan Smith Feb 10, 2018 ▶ 19:36
Assertion Not checkable as stated
Smith: Seeding universities as early customers drove massive enterprise sales
“We started with the worst economically driven customer base that you could in academics, but we have every single major university in the world on Qualtrics, and the value came when their students graduated and went to Expedia or went to You know, Heineken and…”
Ryan Smith Feb 10, 2018 ▶ 24:42
Insight
Smith: Major tech incumbents are currently out-executing agile startups
“What's happening in tech is you're watching for the first time ever the biggest companies execute better than the smaller companies in a lot of different ways with Amazon and everything else where we haven't seen this kind of juice since probably the Microsoft…”
Ryan Smith Feb 10, 2018 ▶ 26:03
Made with StarZero

Turn any episode into a week of clips.

This entire site, over 2,600 episodes transcribed, diarized, checked and made playable, runs on the StarZero media pipeline. Drop in your own episode and the podcast clipper finds the moments worth sharing, cuts them, captions them, and reframes them for every feed.

Try the podcast clipper Learn more