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How one family built Qualtrics to an $8B exit

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Re: How one family built Qualtrics to an $8B exit

#11

Post by sigi45 »

option_greek wrote: post #9

As per Wikipedia: >Qualtrics reported revenue of $190.6 million in 2016 and $289.9 million in 2017 representing year over year growth of 52%. In 2016, Qualtrics reported an overall net loss of $12 million with free cash flow of $3.4 million. In 2017, Qualtrics reported a $2.6 million net profit with free cash flow of $21.3 million Is it normal for companies to be bought at 30x their revenue or am I missing something…

I heard that what you have to pay for a company is something like what the company will be able to make in 20-30 years.

Not sure if you couldn't build it your own for that kind of money.

Re: How one family built Qualtrics to an $8B exit

#12

Post by giu »

option_greek wrote: post #9

As per Wikipedia: >Qualtrics reported revenue of $190.6 million in 2016 and $289.9 million in 2017 representing year over year growth of 52%. In 2016, Qualtrics reported an overall net loss of $12 million with free cash flow of $3.4 million. In 2017, Qualtrics reported a $2.6 million net profit with free cash flow of $21.3 million Is it normal for companies to be bought at 30x their revenue or am I missing something…

From the article:

> SAP CEO Bill McDermott preempted the IPO with an all-cash offer that was more than 75 percent higher than the company’s projected valuation. McDermott said in a conference call that SAP had to pay up because Qualtrics roadshow was going well.

Re: How one family built Qualtrics to an $8B exit

#13

Post by codingdave »

artemonster wrote: post #7

Can someone please genuinely explain the need of such software products to me? I work in VLSI engineering and such things sound like a total superflous bullshit-bingo to me (stats, dashboards, metrics, "value proposition", "targeting", "customer segmentation") I suppose I think so because I am a total layman in these fields. I'd greatly appreciate if someone could explain - is this a thing that acutally helps with so…

It may be helpful to look at one of the academic fields underpinning their work. Take a look at Industrial/Organizational Psychology: https://en.wikipedia.org/wiki/Industrial_and_organizational_...

Qualtrics basically brings the concepts from that field down into SaaS products and makes them more approachable.

Re: How one family built Qualtrics to an $8B exit

#15

Post by k__ »

julianwachholz wrote: post #8
alecco wrote: post #6

I like the story. But on the other hand it makes me feel like I'm looking at the equivalent of a popular Instagram model. It's hard to not compare myself and feel disappointed. HN doesn't inspire me to do something with my life like it did 10 years ago. Perhaps it's my fault.

Well HN is just that, hacker news. The focus isn't on DIY and bootstrapping yourself. This is more a niche that IndieHackers and the like fill in.

True.

But the bootstrapping community is filles with its own kind of people.

Not much overlap.

Re: How one family built Qualtrics to an $8B exit

#16

Post by option_greek »

giu wrote: post #12
option_greek wrote: post #9

As per Wikipedia: >Qualtrics reported revenue of $190.6 million in 2016 and $289.9 million in 2017 representing year over year growth of 52%. In 2016, Qualtrics reported an overall net loss of $12 million with free cash flow of $3.4 million. In 2017, Qualtrics reported a $2.6 million net profit with free cash flow of $21.3 million Is it normal for companies to be bought at 30x their revenue or am I missing something…

From the article: > SAP CEO Bill McDermott preempted the IPO with an all-cash offer that was more than 75 percent higher than the company’s projected valuation. McDermott said in a conference call that SAP had to pay up because Qualtrics roadshow was going well.

Usually IPO will offer 10-20% of shares. So even if the price is slightly higher, it reflects the fact that majority of the shares are non floating. In this case 8 billion seems to be upfront cash deal. This actually seems to be a pretty bad deal for SAP.

Re: How one family built Qualtrics to an $8B exit

#17

Post by astura »

option_greek wrote: post #9

As per Wikipedia: >Qualtrics reported revenue of $190.6 million in 2016 and $289.9 million in 2017 representing year over year growth of 52%. In 2016, Qualtrics reported an overall net loss of $12 million with free cash flow of $3.4 million. In 2017, Qualtrics reported a $2.6 million net profit with free cash flow of $21.3 million Is it normal for companies to be bought at 30x their revenue or am I missing something…

It's explained in the article

>Qualtrics had filed for an initial public offering in the U.S. and was planning to raise about $500 million. SAP CEO Bill McDermott preempted the IPO with an all-cash offer that was more than 75 percent higher than the company’s projected valuation. McDermott said in a conference call that SAP had to pay up because Qualtrics roadshow was going well

Re: How one family built Qualtrics to an $8B exit

#18

Post by paraschopra »

alecco wrote: post #6

I like the story. But on the other hand it makes me feel like I'm looking at the equivalent of a popular Instagram model. It's hard to not compare myself and feel disappointed. HN doesn't inspire me to do something with my life like it did 10 years ago. Perhaps it's my fault.

If it helps with your inspiration, here's my story: I launched my company (Wingify) on HN when I was 22 and bootstrapped for last 8 years. Today we're not Qualtrics scale, but we're doing ~$20mn and have never made a loss in our history.

My guess is that businesses like mine are more common than VC funded ones but we only get to see VC funded ones because that's what the news covers.

Re: How one family built Qualtrics to an $8B exit

#19

Post by mattzito »

option_greek wrote: post #9

As per Wikipedia: >Qualtrics reported revenue of $190.6 million in 2016 and $289.9 million in 2017 representing year over year growth of 52%. In 2016, Qualtrics reported an overall net loss of $12 million with free cash flow of $3.4 million. In 2017, Qualtrics reported a $2.6 million net profit with free cash flow of $21.3 million Is it normal for companies to be bought at 30x their revenue or am I missing something…

So bear in mind:

1) those are 2017 numbers, so if we assume they grew by the same amount, they’re over 400m this year, which makes it only 20x

2) the article mentions that SAP is paying a 75% premium over the IPO valuation, because the road show was going well, they felt like they had to do it.

3) a 10-12x revenue valuation is not unreasonable for publicly traded companies

So, they’re growing like crazy, IPO plans going great, Sap comes calling and qualtrics basically says “why should we sell? We did all the annoying IPO work, what are you going to offer us to make this worth our while?”

It’s basically the perfect negotiating position.

Re: How one family built Qualtrics to an $8B exit

#20

Post by C1sc0cat »

artemonster wrote: post #7

Can someone please genuinely explain the need of such software products to me? I work in VLSI engineering and such things sound like a total superflous bullshit-bingo to me (stats, dashboards, metrics, "value proposition", "targeting", "customer segmentation") I suppose I think so because I am a total layman in these fields. I'd greatly appreciate if someone could explain - is this a thing that acutally helps with so…

It does depend a what level you are working at for example my main client is a major beverage supplier.

They have 200+ brands sold over about the same number of markets.

Its useful to provide high level dashboard summarising key metric.

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