‘It’s an incredible moment:’ Qualtrics founder on IPO

Yahoo Finance’s Julia La Roche discusses Qualtrics’ IPO with CEO Zig Serafin and founder Ryan Smith.

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JULIA LA ROCHE: Welcome to you both, and congratulations on the big debut. Just looking at shares, up more than 43% today. So Ryan, let's start with you because obviously this company has come a long way from where you were when you started in the basement, working with your dad, and of course, selling just two years ago, to SAP for a record sum and now listing again. So sum it up for us, this journey to the IPO today and what this moment really means to you.

RYAN SMITH: Yeah, first of all, it's an incredible moment for our employees, for our customers, for our partners. But yeah, it's been a 20-year run. I feel super-fortunate, super-lucky to be able to start something here in Provo, Utah and have an incredible run. I mean, most CEOs get five, six, seven years if they get an opportunity.

We founded a company 20 years ago. And I feel like our best days are ahead of us, which is pretty cool to be able to say, as you start something as a junior in college. And there's never been a bigger time or a bigger moment for experienced management in a space which we've pioneered and created. And I'm excited to do it. I'm excited to do it with Zig and the team.

And it's just a good day. But it's also just another milestone in this journey, which we've had a lot of milestones. You mentioned the acquisition and everything else. And so we're just excited to go forward.

JULIA LA ROCHE: Zig, let's talk about what Ryan just mentioned, creating a new category in experience management. A lot of folks watching might not fully understand what that means, yet it really touches everyone's life. Explain experience management and what you all call the experience gap.

ZIG SERAFIN: Yeah, Julia. So look, we all live in an experience economy today. You take your own personal experience with any business. You know that a business succeeds or they fail based on the experience they deliver to you personally.

And the experience management technology space is the process of finding and fixing experience gap. And it's often the difference between what a business believes is happening and what's actually happening. What Qualtrics does is we enable companies to be able to create, monitor, and manage every experience on a single platform.

JULIA LA ROCHE: And Ryan, obviously because of the pandemic, no one's really had a playbook here. So using those tools that you all offer on on a single platform, what has been some of the big takeaways from you and your conversations with corporate America?

RYAN SMITH: You mentioned it exactly. Like, if I look at the finance industry, I mean, if it's today, there's not a playbook. If I look at travel and hospitality, no one's been through this before. If I look at retail, no one's been through this before.

So you kind of have two choices. I mean, normally, when the data exists, you can either look internally or Google it. When it doesn't exist, you need to Qualtrics it. And that's what every every organization has the opportunity to do is to say, hey, look, when we don't know where we're going and we're going through a massive transformation, and by the way, this isn't going to be the only one, it's going to be an evolution. We have a chance to reach into the hearts and minds of our customers and our employees.

There's not a CEO I talk to right now who's not saying, hey, what are our employees really thinking? How do we help activate our organization? What are our customers thinking? How do we resonate? How is our brand really appealing with consumers during this time?

And a lot of times, that data doesn't exist for organizations. And they've got to go create. And we're the only company in the world that can take all four of the key pillars of business, customer, product, brand, and employee, develop a platform that it's all there. It's all in one spot. And everyone can activate it.

I mean, since the acquisition of SAP, we've added 3,800 new logos. So our no code, low code system that anyone can implement-- we have 2,000 universities with 700,000 students graduating who are trained on Qualtrics. And people are using it to solve all their problems.

And it's a pretty exciting time. But it's also a hard, no-playbook type journey for all of us. And Qualtrics is the perfect complement to every business going through that.

JULIA LA ROCHE: And you were just mentioning, Ryan, of course, just kind of the feedback you've been getting, the new customers coming on during this time. And maybe for you, Zig, what is something that you have taken away in terms of sentiment? I know you all focus not just on products but on employees as well. In this new world we're operating in, a lot of folks working from home, what are you learning? Do you think this might be a trend that will persist, where people actually want to stay at home? Are they expressing to their employer that they're happy? And how are employers keeping their employees happy during this time?

ZIG SERAFIN: Well, just to build on what Ryan was saying, COVID has really shined a light on how much experiences matter for people. And I'll use an example in the employee area. If you look at Southwest Airlines, for instance, all airlines were hit particularly hard during the pandemic. And Southwest is using Qualtrics to check in regularly with their employees and understand their well-being.

So they're seeing if they're OK. There see if they're feeling safe about their job, who might need PPE, how to ultimately end up engaging their workforce in the right way. And this is true in every single industry sector that we could think of. We've had thousands of programs that have been built on top of our system that's simply about staying connected with the employee, regardless of whether they work for a manufacturing company, a high tech company, health care, university systems.

Often, being able to get back to business and get back to work starts with understanding the hearts and minds of your most important stakeholders, which are the employees of the organization. And what our technology has done is it actually has allowed a culture of action and an ability to be able to have a digital open door available between the leaders of the company, the CEO of the company, and the entirety of the workforce to be able to solve for experience gaps much more in a real time manner.

That's just the employee experience part of our overall platform. There's a lot of other aspects that address customers and product and other dimensions of this. But that's on the employee side.

JULIA LA ROCHE: And I suppose one final question. Zig, I noticed in the S-1-- or Ryan, either one, whoever wants to take the final question here. I noticed in the S-1 that you all pointed out the total addressable market here is $60 billion. So it sounds like there's a lot of runway for growth. I think the latest figure you all were referencing is 13,000 customers.

What's kind of the unlock for you? How do you bring more folks into this ecosystem? And what's the holy grail customer for you guys?

ZIG SERAFIN: Ryan, I'll take that. So look, if you think about when we joined SAP two years ago and we became a part of SAP, the vision was to bring experience management to all of SAP's customers. And that's well underway.

But if you look at the larger market, customers believe that XM will play the biggest role in determining which companies succeed and fail. And a lot of people are equating our platform as important as a CRM system, as important as an HRS system, as important to any other major business process system that people are running. And that's because we focus on some of the most important data, which is the data around how people feel, what people's expectations are, what their preferences are, and then be able to action that and ultimately creating experience leadership across many different types of industries. So the holy grail is enabling a system of action that almost any company can end up using to be able to serve their customers better.

JULIA LA ROCHE: Always looking for that next best action. Qualtrics CEO Zig Serafin and Qualtrics founder and executive chairman Ryan Smith, congratulations to you both. And thank you so much for your time today. Alexis, back to you.

ALEXIS CHRISTOFOUROS: All right. Thanks so much, Julia.