Suzy Burned $25M Chasing Qualtrics. Then It Cut R&D, Not Sales.

Suzy burned $25 million net in 2021 on $40 million of revenue. Matt Britton is unusually precise about where it went, and the precision is the point: the burn was not a sales problem, and fixing it did not mean cutting sales.

The burn was not coming from our lack of sales. It was coming from just over-investment in R&D. At its peak, R&D was 65 percent of revenue, because we had to catch up to Qualtrics. If we’re selling against them, we have to have a product.

Matt Britton, founder and CEO, Suzy

Which lever you pull

The plan he described was to take R&D from 65 percent of revenue to 30 or 35, and reach cash-flow positive by the fourth quarter of the following year. The reasoning behind choosing that lever is the most useful thing in the interview.

“You can only really do that if you have an efficient go-to-market process and you have high gross margins,” Britton said. “If you don’t have that, the lever you can pull is R&D expense — and you feel like the pace of innovation will just slow down a little bit. Then you can actually keep your revenue growth but drop your OpEx growth.”

And the alternative: “The second that you have to dip into that sales and marketing expense in order to get there — well, sure, you might slow down your expenses, but commensurately you might slow down your revenue. And basically then you have a company that’s not making money and isn’t growing.”

General and administrative costs came down too, on a simpler logic: “You get general operating leverage in your G&A — meaning you don’t need another CFO given the size of the company.” Sales and marketing was the only line still growing, “because we have a payback for that.”

Asked what board meetings sounded like in late 2022, Britton did not dress it up: “It’s when are you going to stop burning capital? Because we don’t want to have to rely on the capital markets to fund our existence anymore in this environment.”

The panel is the business

Suzy sells consumer insight software to what Britton calls “super enterprises” — companies doing over $5 billion a year, in technology, food and beverage, packaged goods and financial services. Procter & Gamble and Gillette are customers.

What makes it unusual is that Suzy owns the people answering the questions. Underneath the software sits CrowdTap, a gamified consumer panel with a million registered users, 50,000 to 100,000 of them active in a given month. Latka’s analogy landed it: it is as if you owned Candy Crush, and after level three P&G could ask whether you prefer hard candy or soft.

Paying those consumers costs 10 to 15 percent of monthly expenses. Britton refuses to call that a margin hit.

We’re almost like farm to table. Other companies actually have to buy sample from a third party, which is more expensive, where we’re actually mining our own audience and delivering it directly to the end customer. So it actually makes us more profitable on a gross-margin-adjusted basis.

Matt Britton, founder and CEO, Suzy

Latka reframed it precisely: competitors put “we have to buy panel data” below the line; Suzy puts it above the line and pays less overall. “That’s exactly right.” Gross margin holds in the mid-to-low seventies.

Owning the audience also solves a problem the industry has been quietly losing to. “One of the big problems we’re solving with online market research is there’s a lot of fraud and spam. When people try to buy an audience from a programmatic audience provider, what they often find is it’s a lot of bots that are answering the questions.” Suzy has a patent pending on a bot-detection tool called Biotic. “Quality is really the only thing that matters in online market research.”

What owning the panel lets you build

The clearest product argument for vertical integration is Suzy Live, which connects quantitative research to qualitative in a single workflow.

Britton’s example: you are selling dresses to millennial women and want to know which they prefer. Seventy percent say red. You ask why, and they say it makes them feel younger. “We can then take that subset of people who like the red dress and said it makes them feel younger, and pull them instantly to a Zoom-like interface — just like me and you are talking — and do a live focus group or in-depth interview and ask them why.”

That is only possible because the same people are reachable twice. “Most online market research tools do not have their own audience, so they can’t keep going back to the same person. If they’re buying a third-party audience, they’ll answer a question, they’ll never see that person again.”

The numbers

The ACV is the number that moved. By his own account it was around $60,000 a year at his 2019 appearance and $150,000 by this one — though on that 2019 tape he put it nearer $75,000, so the climb is real but the base is softer than he remembers. The mechanism is a two-axis expansion inside a single conglomerate: vertically, from package testing into ad testing, price testing, innovation and in-store merchandising within one brand; and horizontally, “going from Gillette to going to Tide, or another brand at Procter & Gamble.”

Suzy also deliberately shed the bottom of its market. “We’ve stopped going after the mid-market smaller businesses, because what we’ve realised is that the big TAM is with the market research agencies, and those agencies focus on the big super enterprise companies.”

The GetLatka profile records $60 million against 400 customers, 300 employees, 80 in product and engineering and 75 in sales for November 2022 — every one of them matching the tape. Earlier rows track the climb: about $20 million for 2020, $40 million for 2021.

Vitamins, not Advil

Twenty-four or twenty-five of the sales team carry quota, up from 18 a year earlier, at roughly a million dollars each. What is interesting is Britton’s explanation of why quota rises with tenure.

We’re selling ultimately vitamins and not Advil. We talk to people about market research, but they might not have a growing need — it’s not like we’re selling cybersecurity. So they’re not going to always jump on the offer, but a year and a half later they might. With every year, our sellers accrue these relationships and this pipeline, and things come out of nowhere.

Matt Britton, founder and CEO, Suzy

The team is split three ways, not two, and the reasoning is about knowledge rather than headcount. “If you’re a net new seller, you really just have to understand our product. But if you’re expanding, you actually have to understand the company — and especially if you’re already working with them, there’s an expectation you know the company.” New, expansion and renewal each get their own team.

On the horizon he was specific and unhurried. Growth target for the following year: 50 to 60 percent, landing “in the high eighties to low nineties.” An IPO “likely in the next two to three years, but probably closer to when we’re at $200 million ARR versus $100 million. And definitely not when you saw the SPAC craziness of companies going public at 25, 50 million.”

Suzy’s own history explains some of that caution. The company was incubated inside Britton’s agency, MRY, and spun out before the agency was sold; he rejoined as CEO after his earn-out ended. It was called CrowdTap then, and relaunched as Suzy in 2018.

Asked what he wished he had known at twenty, he pointed back at that: “How important your network is, and how important it is to mind your network over time. When we launched Suzy, the way I got it off the ground was calling the people who I knew, who trusted me, who would take a chance on our product.”

Sources — Matt Britton interviewed by Nathan Latka, recorded 1 November 2022, with figures from his earlier appearances as cited on the tape. Revenue, headcount, customer and funding figures from the Suzy profile on GetLatka, with dates as recorded.