SurveyMonkey CEO Zander Lurie: IPO, yes; 2017, not likely
On Thursday night, at a StrictlyVC event at SurveyMonkey in Palo Alto, we sat down with CEO Zander Lurie to learn more about the direction of the 17-year-old company, known for the roughly 90 million surveys that the outfit and its customers create for the constituents each month (and whose average order volume is $300, says Lurie).
We were particularly interested in Lurie, a former GoPro, CBS, and CNET executive, given his relatively quiet tenure as chief executive — a role to which he was named after 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 company’s valuation, polling accuracy, and whether and when the company will go public, among other things. Part of that chat, edited for length, follows.
TC: You’ve been a CEO for nine months. What do you now appreciate much more about every CEO you’ve ever known?
ZL: I always had a boss or somebody who was there for constant feedback, and it’s different when you’re CEO. We have an amazing board of directors made up of super supportive, highly esteemed people who are helping SurveyMonkey grow, but as CEO, you’re in charge of the script: What’s the strategy, who are the teams you’re entrusting to build the company, then all the comms and the motivation and accountability associated with delivering on the company’s promise. It’s on you to be that great storyteller. And I love it, but that’s what has struck out for me. There’s no one to ask: Am I doing a good job?
TC: You inherited a unicorn company – valued at $2 billion at its last financing in late 2014. You also inherited the company under unique circumstances. Do you feel extra pressure owing to those circumstances?
ZL: We’re fortunate to have one of the most profitable businesses on the internet. You couldn’t 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 buyout and in six years hired about 600 people, and today we’ll 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. I feel immense pressure to his legacy, to the board, to investors, to the hundreds of employees who worked with him here. 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. So while it’s a lot of pressure, it’s also super fun and a great honor.
TC: How many people are using your surveys?
ZL: There are 15 million who are sending on an annual basis and interacting with product 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 plan — the longer they stay, the less likely they are to churn, and those are obviously our most profitable companies.
TC: Uber is one of your many corporate customers, correct? Are they responsible for those five star ratings we’re asked to give drivers at the end of each ride?
ZL: Uber is using a variety of [our] products, though I can’t 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 you’re 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. It’s 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 fear that if I don’t, there will be unintended consequences. Other people game surveys for their own reasons, so how do you ensure these surveys are actually useful to your customers?
ZL: For us, it’s 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, you’re 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 area, an outbound, sales-driven audience area. But we’re hiring 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 we’ve built a 200,000-square-foot, state-of-the-art facility in San Mateo that will help 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, it’s highly unlikely we’d go out in 2017. We have the scale and profitability to go public, but we want to do that on our own timeframe. We’ve 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 traction and more 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. Any lessons learned? Was there much attrition?
ZL: No. We’ve been blessed, and I give all the credit to Dave Goldberg and how he built the culture here.
You need to build a culture that values employees’ time because that is the resource. No one is talking anymore about having an exclusive on a plant or a patent that no one else can surmise. It’s about: do you have a mission and a culture and a way of inspiring and empowering your employees to work in an era that’s very different than it was 30 years ago? So we very much believe in prioritizing our employees’ health, and that’s includes their financial health, that’s work-life harmony, and that’s ensuring they have something inspiring to work on.