Software company’s success built from the basement up
Maverick US firm Qualtrics grew from a father-son collaboration at university, with the aim of ‘making sophisticated research simple’
Qualtrics chief executive and co-founder Ryan Smith: “Nail it, then scale it! A lot of start-ups are thinking about scaling before they’ve even figured out their product.”
In the boardroom of his Dublin offices on Earlsfort Terrace, a jetlagged Ryan Smith sits at the table wearing a dark hoodie and baseball cap. Outside the door the office is buzzing with people wearing red and black T-shirts, all of which were designed by Smith.
The founder of US software firm Qualtrics, Smith has been named one of America’s most promising chief executives under 35 by Forbes magazine. And it’s easy to see why. Nothing seems impossible for the tech entrepreneur.
Smith liked wearing clothes by well-known brands such as Quiksilver to work. But he thought it would better to have clothing that he personally designed. So he set about creating his own line, not for retail purposes.
“Why should we wear someone else’s brand, when we can wear our own? There are 50 different types of T-shirt, 20 types of hat, lots of jackets, yoga pants, ski coats, sun glasses etc all designed by me for staff to wear. We want our swag to be the best pieces of clothing in workers’ closets.”
Smith co-founded Qualtrics with his dad Scott in 2002. Scott was a college professor at Brigham Young University in Provo, Utah, and Ryan was a student there.
“Our whole goal early on was to make sophisticated research simple.”
Academic institutions and businesses, from Stanford to Saks of Fifth Avenue, Yale to Yankee Candle Company, all use the Qualtrics platform to gather and understand customer satisfaction, customer experience, brand, market and employee feedback.
“We offer a platform that allows businesses to collect data quickly and make a decision based on that data,” Smith says.
Did I mention he turned down an offer of half a billion for his company?
“What would I have done if I accepted half a billion dollars? I want to work in tech so why not just stay with Qualtrics?” he says.
“Though after that I had to build the greatest team to ensure I hadn’t done something stupid.”
The genesis of the company was slow, bootstrapped by Scott and Ryan, and getting customers was very hard initially.
“We tried giving it away for free; that didn’t work. We tried targeting CIOs; that didn’t work. We also tried to target corporates and that didn’t work. Eventually we hit universities and that was a success.”
Getting customers was made harder by the fact that the company had some tough competition.
“My biggest competition in the early days raised $30 million in venture funding. They were on the front cover of every magazine. They were offering a product as good as ours at a cheaper price. I was very frustrated.”
It was two years before Ryan and Scott took on their first employee, and when that moment came, the company still had very little money.
“I convinced one employee to work for $8,000 a year, and another to work for $20,000 a year. Bryce (Winkleman – regional sales lead for EMEA) was getting $12 per hour when he started.”
“The business was in the basement of my parents’ home. It was really hard hiring people. When they showed up they were surprised to see the company was in the basement of a house.”
Getting his brother Jared on board was among the hardest hiring feats.
“He was working for Google. It was a hard sell for us to get him on board. It took us seven years.”
“It was weird when he joined as he is my older brother. He came from a Google style approach and I came from a start-up approach so it was hard meshing them.”
The company finally moved out of its basement location in 2006, when Scott decamped to Moldova for a six-month Fulbright fellowship to help set up a business school.
Ryan seized the opportunity to move out of the basement and into offices.
Crisis? What crisis?
While a huge percentage of companies struggled through the global economic downturn, the financial crisis was a period of growth for Qualtrics.
“Our market on the corporate side skyrocketed during the recession. We were adding 500 corporations a quarter during the recession.
“We now have over 6,000 enterprises as clients and most of them started with us after 2008.
Smith credits F.ounders and The Summit for introducing him to Dublin.
“I came to F.ounders and the Web Summit. That convinced me it was a good time come to Ireland. Dublin wasn’t on my mind as a business location until I came to those conferences.”
In September last year, the company opened its European headquarters in Dublin, announcing 150 jobs over three years. Over 50 people are already employed in the Dublin office.
“We did look at other cities in Europe. Our head of engineering is from the UK. My brother was aware of Dublin, though, from when he worked in Google, as he had colleagues based in Dublin.
“Dublin felt like Provo to us. There was more of a scrappy culture.”
The company now has more than 6,000 customers including half of the Fortune 100 and 99 of the top 100 business schools.
It also has more than 500 employees between Utah and Dublin, but Ryan wants more.
“I work myself out of a job about every three months. As we continue to hire good people, my role changes, as they take on some of my job.”
“A lot of companies just go through the motions but they can’t say what success looks like. We can’t be in this (Earsfort Terrace) office anymore. This isn’t success to us. We need more people and more offices in Dublin.”
His advice for aspiring entrepreneurs is: “nail it, then scale it”.
“A lot of start-ups are thinking about scaling before they’ve even figured out their product.”
As for his biggest competition from the early days?
“That company is now non-existent. We blew right by them and it’s a great feeling.
“It’s very rare to have a company that can grow and scale to one that will be around for a long time. We are growing like weeds and we are profitable.”