On Thursday night, at a StrictlyVC event atSurveyMonkeyin Palo Alto, this editorsat down with CEO Zander Lurie to learn more about the direction of the 17-year-oldcompany, known for the roughly 90 million surveys thatthe outfitand its customers create for their various constituents each month(andwhose average order volume is $300, says Lurie).
I wasparticularly interested inLurie, a former GoPro, CBS, and CNET executive,given his relatively quiet tenure aschief executivea role he accepted in Januaryafter the passing of longtime CEO Dave Goldberg last year (and following a brief stint by a more immediate precedessor, tech veteran Ben Veghte).
We wound up chatting about the companys valuation, polling accuracy, and whether and when the company will go public, among other things. Part of that chat, edited for length, follows.
TC:Youve been a CEO for nine months. What do you now appreciate much more about every CEO youve ever known?
ZL: I always had a boss or somebody who was there for constant feedback, and its different when youre CEO. We have an amazing board of directors . . . but as CEO, youre in charge of the script:Whats the strategy, who are the teams youre entrusting to build the company, then all the commsand the motivation and accountability associated with delivering on the companys promise. Itson you to be that great storyteller. And I love it, but thats what has struck out for me. Theres no one to ask: Am I doing a good job?
TC: You inherited a unicorn company valued at $2 billionat its last financing in late 2014. You also inherited the company under unique circumstances. Do you feel extra pressure owing to those circumstances?
ZL:Were fortunate to have one of the most profitable businesses on the internet. You couldnt really do a survey until SurveyMonkey and its founder really invented this new online survey platform. The company in 2009 had about 12 employees and $25 million in profits, then beloved Dave Goldberg became CEO in a buyoutandin six years hired about 600 people, and today well do about $200 million in revenue, with EBITDA margins in the mid 30s. So sure, the circumstances under which I became CEO were awful. Dave was one of my best friends in the whole world. But the culture he built, and his ability to recruit a team of world-class people across product and engineering and marketing, amazes me still. Sowhile its a lot of pressure, its also super fun and a great honor.
TC: How many people are using your surveys?
ZL: There are15 million who are sending [surveys] on an annual basis and interacting with our products in different ways. The vast majority are responding to surveys from people they trust, increasingly on a mobile device.
We have a very detailed cohort analysis whereby people who try [the service] on a monthly basis tend to come on a somewhat transactional basis, and those who sign up for an annual planthe longer they stay, the less likely they are to churn, and those are obviously ourmost profitable companies.
TC: Uber is one of your many corporate customers, correct? Are they responsible for those five-star ratings were asked to give drivers at the end of each ride?
ZL:Uber is using a variety of [our] products, though I cant say exactly which. I think the largest survey company in the world today is Uber. Today, every time you take an Uber, you take a .2-second survey where youre rating your driver, and obviously those data points are helping inform them about which drivers are doing a great job, as well as [informing Uber about] the customers who drivers like. Its using what we call people-powered data in a really refreshing way to drive their product forward.
TC: I always give drivers five stars out of some paranoid fear that if I dont, there will be ramifications. Other people game surveys for their own reasons. How do you ensure these surveys are actually useful to your customers?
ZL:For us, its really about the brand and scale. Because of the footprint we now have across geographies, ethnicities, age groups, genders, and companies, we have an ability to weight the data in a way that we can give customers really great answers.
TC: You have 650 employees, following a layoff earlier this year. At the same time, youre planning to move into a new space at year end. What does that tell us?
ZL:We did a layoff in March; we were overexposed in one business areaan outbound, sales-driven audience area. But werehiring pretty aggressively in other areas.
[And] yes, we have a first-class space in Palo Alto, but for all those founders who are looking to invest their VC dollars, Palo Alto real estate is a tough place to do it. So weve built a 200,000-square-foot, state-of-the-art facility in San Mateothat willhelp us scale and grow and do it more cost effectively.
TC: You say your revenue is roughly $200 million; that means it has roughly doubled since 2012, judging by a WSJ piece from that time. Are you thinking about an IPO in 2017?
ZL: 2017 is coming up right? [Laughs.] No, its highly unlikely wed go out in 2017. Wehave the scale and profitability to go public, but we want to do that on our own timeframe. Weve raised more than a billion dollars in equity and debt capital over the years, largely through a couple of recaps, with private equity owners taking out earlier owners. We also did that in part so we could [orchestrate] some employee liquidity events.
But we have some exciting product development in place and we want to get more tractionandmore visibility, and that will put us in a great position to go public on our own timeframe, likely after 2017.
TC:So many founders wrestle with employee liquidity and whether or not to allow it. Any lessons learned? Was there much attrition?
ZL:No. Weve been blessed, and I give all the credit to Dave Goldbergand how he built the culture here.
You need to build a culture that values employees time because that is theresource. No one is talking anymore about having an exclusive on a plant or a patent that no one else can surmise. Its about: do you have a mission and a culture and a way of inspiring and empowering your employees to work in an era thats very different than it was 30 years ago?So we very much believe in prioritizing our employees health, and that includes theirfinancial health, thats work-life harmony, and thats ensuring they have something inspiring to work on.
