The Ledger
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Bhaskaran: Not rewriting an acquired company's codebase is a huge long-term mistake
“The first time I did it, I did not rewrite the platform. I rewrite their code base and I, that's, in fact in long term, a huge mistake, right? So because now you have multiple code bases, and my team doesn't want to work on better, and there's all this, all th…”
SaaS double-digit multiple expansion triggers at $60M to $70M revenue
“I think the kind of like the trigger is in the 60, 70 range where people can look at that and say, like, can we get this to 203 104 hundred, really, right? And that's a linear argument. I mean, it's still a pretty, Pretty big lift, but it's a linear argument, …”
Bhaskaran stopped studying Jeff Bezos because he 'became a dick'
“I used to follow Bezos before he became a dick, but that's alright.”
Upfront cash is the only real financial risk for acquirers
“Whatever price tag you give, you can divide it between what you pay today, and what you pay tomorrow, and what you pay the day after. And whatever you pay tomorrow and the day after usually has some contingencies, right? If you think about it, like, yeah, I me…”
Bhaskaran: 20% of acquired employees will quit regardless of retention efforts
“I would argue anytime you do a deal, 20% of the people in, in the selling company will just leave no matter what you do, really, because they are like, it's a good kind of like, you know, break point”
Bhaskaran: Rewriting acquired tech is not complicated once product-market fit is proven
“Rewriting tech is actually not that complicated once you know what to build. The key thing that Valerie did was like, all right, cool. We know exactly what the product market fit is. Everything's working. People are paying for it.”
Bhaskaran: Balsamiq beats Figma for rapid information architecture
“Figma is great, but Balsamiq is even like, it gets kind of the information architecture really quickly, really fast in terms of what I want to get done. And you don't need to have, you know, you don't get caught up with the UI design elements. You get the info…”
Bhaskaran: Term sheets and LOIs should simply state basic payment terms
“And LOI and term sheets are nothing but just, whatever you think, just write it down. It's not that complicated. Just write down, like, okay, this is how much I'm gonna pay right now, this is how much I'll pay in the future, and so on and so forth.”
Bhaskaran: Diligence timeline extensions do not matter once an LOI is signed
“Once you're in LOI, like, you know, if it takes 30 days, nah, say 60 days, who cares, really, it just goes through.”
QuestionPro beats Qualtrics in Dubai because its local team works Sundays
“In Dubai, we can beat out Qualtrics and Medallia very, very easily, because we walk into the door and say, hey, look, we are right here. You know, enterprise sales is largely about, hey, you work on Sundays, we work on Sundays.”
Bhaskaran: Acquirers should lock in price before doing due diligence
“The only, my, only thing that really matters is like, dude, how much are you going to pay? That's it, right? So get that conversation, at least that's what I do, get that conversation out of the way first. And then start worrying about the diligence and everyt…”
Upfront cash is the make-or-break element in M&A deals
“To me, like, the most important negotiation, negotiating position is the upfront cash element, because that makes or breaks a deal, simply put, right?”
Bhaskaran: QuestionPro has never failed to pay an earnout
“Honestly, I think I've never, ever kind of not paid an earnout.”
Bhaskaran: Large enterprises start CX initiatives with journey mapping, not NPS
“If you think about CX ecosystem, large companies start the conversation online. Off with journey mapping. They don't start off with saying, Hey, let's do an NPS program together. They start off and let's understand the journey of the customer, then find the to…”
Bhaskaran: QuestionPro uses an internal valuation benchmark of 5x revenue
“We kind of have an internal kind of like benchmark of a five X, simply put, right? It's not 10, it's not three either, realistically. That's the way we kind of like think about ourselves.”
Bhaskaran: QuestionPro took $10K customer deals to build features overnight
“I did that quite a bit in the first part, which I said, like, I never said no to any feature, right? Anybody said that they wanted something, I said, I'll get it done. Really, right? Will you buy it? And I was just like on the spot. I've done deals where like,…”
SEO success depends on competitor positioning rather than absolute content quality
“SEO is a game of not how good you are, but how everybody else is playing that game, really, right?”
Acquire stalled sub-$1M ARR startups purely to acquihire their founders
“You can hire founders by just acquiring their companies, simply put, right? Smaller companies that they, they're kind of either exhausted, or, They are looking, they just need more, they're not able to get beyond the one million dollar ARR function.”
Bhaskaran bought a $3.5M revenue PE business for $1 million
“So it was making three and a half million bucks. I said, well, I'm not going to pay anything for this. So I typed in that email and I just put an offer letter on my iPhone, and I offered them 800 grand. And they came back and said, would you do one million? I'…”
Bhaskaran guarantees QuestionPro's Latin America revenue will hit $10M
“And that thing is gonna hit ten million bucks. I'm guaranteeing you that.”
Scaling past $20M ARR requires selling multiple products to existing buyers
“So, so when you start getting to this kind of scale, we just have to have more product to sell to the same buyer, and we round it out, and we, I call it the share a wallet model, so, you know, that's how we do it.”
QuestionPro generates $15M from enterprise and $5M from non-enterprise
“If you look, if you ask me, like, okay, we made twenty million bucks, out of which I would say fifteen million dollars was from the enterprise business and five million from the non-enterprise business, realistically.”
QuestionPro is in private equity talks to scale to $100M ARR
“We're in talks with a couple of private equity firms to help us kind of scale up from twenty million to a hundred million.”
Private equity investors will likely demand a 50% to 60% stake
“I think at that rate, they're very likely most of, most folks want to have some control premium. So they'll, they'll want us to control at least 50, 60% of the company.”
QuestionPro acquired Sweet CX for 2x revenue with kickers to 3x
“So I think it was, it ended up being two X with some kickers, if, you know, if it could go up all the way to three X if certain, kind of, obviously, benchmarks are met.”
QuestionPro paid just under $700k in upfront cash for Sweet CX
“Little less than 700 and change, I think. Right. 700 and change was my exposure.”
Bhaskaran: QuestionPro targets $40M 2023 revenue with 80% organic growth
“Well, the target is 40, so let's see. ... My expectation is 80, at least 80% of that is going to be organic, maybe 20%, you know, M&A, but, you know, yeah, maybe 80, 20 is kind of the benchmark that I would foot.”
Bhaskaran: QuestionPro nearly 9x'd traffic through Latin America expansion
“So that gives you, kind of, how much we grew in the last couple of years. We almost nine-xed our traffic.”
Bhaskaran: QuestionPro plateaued at $4M ARR for four years before reaching $10M
“From 2005 to 2009, we got to four million bucks. Then we got stuck over there, right? For almost four years, I got stuck. I mean, now we were four to 4.2 to 4.3 and then eventually kind of 6.5, and so it's, and then we got from 6.5 to 10.”
QuestionPro grew Latin America revenue from $100K to $4.5 million
“Ah, so we started off at a hundred grand, and now it's four and a half million bucks. Just out of Latin America. Not just Mexico, but all of Latin America. Mexico, that includes Brazil and everything else, really, right?”
QuestionPro serves 800 enterprise and 4,000 non-enterprise customers
“The enterprise is about 800 customers and non-enterprise about 4000 customers.”
QuestionPro expects to reach $18M to $20M ARR in 2020
“So the error for this calendar year will be in the 18 to twenty million dollar range.”
QuestionPro currently operates at 15% to 20% profit margins
“Even today we run at about, you know, 15 to 20% margins.”
Startup acquisition targets refuse all-stock M&A deals without cash
“Nobody wants you to just do an all stock deal.”
QuestionPro expands enterprise accounts by about 30% annually
“We grow accounts by about 30% effectively. Our goal is to grow every account by about 30%.”
QuestionPro pays $6K to $8K CAC for $15K enterprise accounts
“So, yeah, I mean, I think our kind of cat approximately is, and I think our analysis is somewhere in the six to 8000 dollar range, you know, in terms of getting people into the door.”
SEO has been QuestionPro's core business driver for years
“A lot of our work is through SEO and you know, that's kind of, that has been our driver for our business for a long, long time.”
QuestionPro converts 2% to 2.5% of free trials to paid
“So we have a lot of information. So we, about, we convert about two percent to two and a half percent. So we're not converting at 10%. We're converting at two percent.”
QuestionPro ACV is $300 self-serve versus $12K for enterprise accounts
“You know, on this side, I'm making about three to 400 bucks a pop, and that side, we're making 12 grand a pop, realistically, right?”
QuestionPro holds $5M in cash reserves to fund acquisitions
“We have a couple of, you know, five million bucks in the bank, frankly, at this point to do deals of our own, but we want it, we want somebody with, like, a little bigger, bigger kind of checkbook that can help us, you know, frankly, acquire revenue at a much …”