Qualtrics (www.qualtrics.com), is a fast-growing company based in Provo, UT that makes sophisticated research simple. They have recently been featured in a four-page article in Forbes, as well as The Wall Street Journal, TechCrunch and a profile in the Salt Lake Tribune. Ryan Smith, CEO and co-founder of Qualtrics, took some time to chat with Ascent Advisor.
Ascent Advisor: Qualtrics recently raised $70M from Accel Partners and Sequoia Capital. You’ve turned down a lot of investors over the past decade. What was different this time?
Ryan: It’s really been a long time coming. A lot of it had to do with timing and how we viewed the need for other people under the tent. We’ve created a pretty amazing suite of products and we are making some major decisions. It is all very positive and what I call “world-class decisions,” but it’s good to have other people who have been there before to act as sounding boards and help us open up Europe. When we got the opportunity to work with Sequoia Capital and Accel Partners, we realized it doesn’t get better than that.
So far it’s been unbelievable and I don’t anticipate that changing. We know it’s going to be hard work, but we’re very clear on what we’ve signed up for and what we’re ready to do. I think that everything came together beautifully.
Ascent Advisor: Data collection is the essence of Qualtrics. What role does data play in your management style?
Ryan: If it didn’t influence us then we’d be selling something we don’t believe in!
There’s a quote from Jim Barksdale (former CEO of Netscape) something like, “If you don’t have any facts, we’ll just use my opinion.”
We don’t believe in opinion decision-making. We want to eliminate as much of it as possible because if there is data out there to make decisions, then your guess factor is minimal. We think the data we need for what we’re doing is out there. It’s in a lot of different formats, and we’re getting it together to make better decisions.
We use data for absolutely everything—from sales metrics to hiring, from where we’re going on our company offsite to what we’re eating for lunch. The feedback from everyone who has looked at our organization is that they can’t believe how metric-driven our organization is and the data points that are available.
I think our internal systems rival anything out there for having something that’s transparent and where the data flows to enable decision making. Fortunately, we did this early on and it’s grown as part of the culture.
Ascent Advisor: Where do you think that discipline came from?
Ryan: I think it has evolved. If you look at the genesis of our company, you’ve got my father, a scientist; you’ve got myself; and then a brother who did a lot of this at Google. He understands from an engineering standpoint as good as anyone I’ve ever seen how this structure works. We’re actually a 10-year “overnight success” so it’s been an evolution. Now our internal systems are mature enough that a lot of people would like to license them.
Ascent Advisor: Your first clients were university professors who don’t see themselves as buyers typically. How did that hyper-focus help you to deliver and be successful?
Ryan: Academic researchers are a difficult and demanding group. If you can serve them, you can serve everyone else.
A lot of companies wouldn’t pay the price to do what we had to do. It was really a matter of timing because that was all we had as they were the only ones doing survey research online. Universities used to be a much larger portion of our business than they are today.
People can look back and say the success of Qualtrics is because we nailed the academic market. Everyone who has been to business school knows Qualtrics. We did the same thing with ad agencies and cruise lines. I think it has to do with our DNA and who we are.
Whether it had been university professors or ad agencies, the focus is what got us to dominate the market. I’ve never focused on something so hard in my life. In a business where things change every day and we get pulled in different directions, staying focused is tough. We’ve done it a couple times really well and I think that’s what sets us apart. We love the academic market right now. We absolutely love them.
Ascent Advisor: A lot of things are changing right now at Qualtrics (moving from a single product company to a suite of products, new board members from Accel and Sequoia, doubling the size of the workforce.) How are you keeping employees engaged in all this change?
Ryan: To be honest, I think change in itself keeps employees engaged if it is positive. If employees aren’t engaged right now with everything that’s gone on in the past few months with Qualtrics, then they’re never going to be!
All I can do from my standpoint as a CEO and a founder is create a good environment. I can’t tell people how to think. We just create a good environment and try to execute so that people can buy into a vision. I would say we’ve been successful. We’re not perfect—no one is—but we decided we were going to go out and raise some money, and we did it. We decided we were going to go after the academic market and we did it. We decided that we were going to hire and we’re doing that.
People like positive change. They like to be a part of something that’s on fire. I think that’s what our employees are after, but we also realize that’s not for everyone. We’re looking for those who want a challenge—they want to do something where they’re going into uncharted waters and they’re going to make a difference. A big focus for us to find people who are “Qualtricsy,” the same way that Google wants people who are “Googley.”
Ascent Advisor: How would you define “Qualtricsy”? What is the right mix of a person here?
Ryan: We have a pretty young workforce, but I think it’s a misconception that you’ve got to be young and energetic to work here. We actually have an ex-Google guy who’s 60 and really making a huge impact. It boils down to finding people that have a high trajectory and are still progressing upward in their career.
It’s also extremely important for us that they’re up for the task, eager to do something that maybe no one else has done, and they’ve got to own it from start to finish. That’s what Qualtricsy is. It doesn’t matter who you are or if you have an MBA, you might have to move boxes. It’s all hands on deck all the time here right now. Given that we’re a very metric-oriented organization and everything is run on data, we want everyone thinking about how they are going to fuel the fire.
It’s probably not one of those organizations where you come in and point out everything that is broken. We don’t need other people just telling people what to do. We need people who can own something from start to finish and really execute at a high level.
Ascent Advisor: You have said before that you have to be careful what you point out is wrong because you might end up owning it.
Ryan: Yes, when you’re dealing with a high-growth organization, it’s easy to point out things that aren’t working. I can walk into any organization in America and point out at least three things they’re not doing right, but there are probably some things I couldn’t fix so what good does that do?
Everyone needs to be executing at a high level and achieving their goals, and then together as an organization we’ll achieve our goals. It’s not one person, but the entire group. Our next 200 hires are extremely important.
Ascent Advisor: How do you anticipate doubling your workforce?
Ryan: We’ve done it before. It’s not going to be easy, but we’re up for the challenge. This is what we signed up to do. I’m working harder now than I’ve ever worked in my life. That’s exciting for me.
I know what it’s like to play golf every day, and I don’t want to do that right now. We’re driven to make sure that we do this. It’s going to push everyone involved and we’ve got a lot of employees that are up for it. If you’re not going home at the end of the day feeling like it was difficult, then I don’t think you’ve done anything. There will be good and bad days, but you need to tackle the hardest problem that you can find within the organization. I firmly believe that.
When one of the co-founders at Qualtrics, Stuart Orgill, was choosing his major at BYU he selected accounting. I asked him why and he said, “Because I’m not good at it.” While others selected what they were good at and what they thought was a good fit, he selected an area where he was weakest and dominated it. That’s the way that we feel.
Ascent Advisor: In the last couple months there seems to be an emphasis on letting the world know about Qualtrics. What was the catalyst behind that?
Ryan: I think a lot of companies do things backwards. They come out of the gate with marketing and PR and forget about the rest. We came out the gate really focusing on delivering a good product, a great user experience and signing up customers. We’ve been heads down for a long time.
We started to get some exposure last year, to the point where people were starting to take notice. You can decide to tell your own story or let someone tell it for you. We’re ready now to tell our own story.
Ascent Advisor: When you founded Qualtrics, what was the vision for the company?
Now we want to create a great company and we’re well on our way with two partners that share our vision. There’s no way Sequoia Capital and Accel would have invested in us is they didn’t. Both of these firms look at several thousand companies a year but choose to invest in just 4-6 like us. They can spend as much time on a company that’s not going anywhere as one that is. If you look at the other portfolio companies within their brands (Facebook, Groupon, Linkedin, Dropbox), they definitely believe that we have the same potential for success. That’s one of the reasons we did the investment because they not only share our vision, but also believe in our team and that’s exciting. That gets me pumped up.
Ascent Advisor: You have doubled revenue consistently over the last 10 years. What’s the biggest challenge that has come from that growth?
Ryan: I think it’s the same challenge that everyone faces: execution. We have a lot of hard work ahead of us to scale to an organization of 500 employees. I think we’re set up to do it better than most companies I’ve seen, but everything depends on how we execute. Can we execute everything we want to do? The best way to look at the future is to look at the past, and the answer is yes.
When you become a 500-person organization weird stuff starts to happen. Any time you’re dealing with that number of employees, it’s definitely challenging. Time management is a big challenge for me. And then maintaining the small feel is also going to be interesting. I think we’ve done a really good job of being completely transparent with the organization throughout this whole process as well as with everything we do. We’re almost too transparent.
We’re all growing up together; we’re all a family. This is a magic pony ride. We call this the ride you’re going to get maybe once or twice in a career if you’re lucky.
Going back to your other question, that’s what keeps employees engaged. There’s a certain type of person that loves that rush, loves that ride. I just brought an old friend back to the company that was with us in the early basement days and he was just blown away with all the excitement. That’s what people like.
Ascent Advisor: The culture at Qualtrics and work environment are very unique. Have you set out to let people ride bikes and have dogs in the office? Or is that naturally who you are?
Ryan: You can’t fake it. It’s really who we are. Once again, all I can really do is set up the environment and then the culture comes from our employees. It comes from who we hire. I could absolutely kill the culture with 20 hires. We have to be extremely careful when hiring to make sure everyone fits the culture. If people aren’t fitting it, then it’s not going to be a good experience for anyone.
Ascent Advisor: What is the vision for Qualtrics today?
Ryan: We’re focused on creating a great company and we want to do it the right way. We want the right customers, the right growth. We’re having success in pretty much every industry and now we’re developing additional products to create more of a data collection platform. Every organization in the world needs Qualtrics—from academics to nonprofits to government to the Fortune 500. They’re all using it. We have people in every space and they need our products for better insights and decision-making.
Ascent Advisor: What’s a challenge that you and your leadership team face that you wish your employees understood better?
Ryan: I think the number one thing is how hard we need to work. This is hard work. But it’s the hardest work that’s the most rewarding. I think we have a lot of employees that understand that. If you look back at your life to figure out your most rewarding accomplishments, they are typically the ones you have worked the hardest to achieve.
Ascent Advisor: What’s the next hurdle? What’s the big next issue that Qualtrics is facing?
Ryan: Reaching 500 employees. Scaling is definitely a challenge. It’s always fun and no one can tell you how to do it. We need to focus and execute the same way we have done in the past when we went after universities.
Our employees are getting smarter, brighter and more experienced. It’s unbelievable. It’s exciting to put someone in the chair next to you that’s smarter and is going to challenge you and raise the bar a little bit.