How Suzy Grew to Nearly $40M ARR and 350 Enterprise Customers in 2021 (Interview with CEO Matt Britton)

Introduction and What Suzy Does

Nathan Latka

00:00Hey, folks. My guest today is Matt Britton. He's the Founder and CEO of Enterprise Software Platform, Suzy at suzy dot com. It's an enterprise market research software. Matt, you ready to take us to the top?

Matt Britton

00:08>> Let's do it.

Nathan Latka

00:09Alright. This is like a very, you know, as software permeates the world, everyone needs to do better user testing and get better market research and all those sorts of stuff. Are you serving mainly SaaS companies doing research, or is this enterprise research for anybody?

Enterprise Customer Base and Use Cases

Matt Britton

00:19>> Well, we serve as primarily large enterprise brands, consumer packaged goods companies, food and beverage companies, consumer technology companies, etcetera.

How Procter and Gamble Uses Suzy

Nathan Latka

00:27Mhmm. So how might, like, Procter and Gamble use you then?

Matt Britton

00:30>> So P and G is actually a customer and companies like P and G uses across the entire product development life cycle. So that's everything from what type of product extension should they come to market with? What should the packaging look like? What should they name it? What should they price it? What should the merchandising look like? What should the advertising look like? So if you think of any new product, there are so many different departments that

00:49>> touch it in a large enterprise and each department needs to have the voice of the consumer throughout that decision making process. And that's what the role Suzy plays. So it's not as much of a vertical solution, like a user testing where it's for one specific, you know, point solution. It's really meant to be a system of record for consumer insights at large enterprises.

Nathan Latka

01:06And you think you'll stick to consumer insights for the foreseeable future?

Matt Britton

01:10>> Well, I mean, ultimately we were about connecting the asker, which is large brands with the tellers, which is our proprietary consumer network, you know, in aggregate to allow companies to make decisions. So that is our business model and that's what we're gonna continue to do. You can call it whatever you'd like. There's so many different iterations and use cases, but the world's changing so fast and 99% decisions that are made at companies are not made with

01:32>> any data. They're, they're guesses, they're hunches, they're based upon myopic thinking. So we really wanna make market research accessible, the same way the iPhone made the camera accessible because the best camera is the one you have on you, right? It's kind of how we look at our tool.

Customer Growth from 200 to 350

Nathan Latka

01:44Matt, when you we chatted back in September, I think you were serving up two fifty enterprise customers. Where are you at today?

Matt Britton

01:49>> We're about three fifty.

Nathan Latka

01:50Wow. Okay. That's a ton of where did most of that growth come from?

Matt Britton

01:53>> Just expanding to new industries that we've rolled out to, as well as identifying new use cases in existing companies. And and we've also expanded our sales and marketing team dramatically.

Team Size and Sales Organization

Nathan Latka

02:04I was just gonna ask that. Yeah. So what's team size today?

Matt Britton

02:06>> I mean, we spoke in September 2019. I mean Was it 2019? Yeah. I don't think we've spoken since the pandemic. We may have, but

Nathan Latka

02:13Oh, you're totally right. You were yes, you're right. It was 200 customers back then. Right. Up to three fifty now. Yes. Yeah. So so your and your team size back then, think you told me was 65. Right? Yep. And now we have 200. Holy cow. How many engineers?

Matt Britton

02:26>> About a third of our team are engineers, so

Nathan Latka

02:2760 ish. Yep. And how many sales folks?

Matt Britton

02:30>> We have 18 ramp sellers, and then we have, you know, a team of SDRs almost at a one to one ratio to support them.

Sales Comp Structure and Net New vs Expansion Teams

Nathan Latka

02:37So call it thirty six, the 18 that are carrying quota, how did you set that up? A lot of founders have trouble scaling that sales team.

Matt Britton

02:43>> How do we set it up in terms of their comp? Or how do we set it up?

Nathan Latka

02:46No, The cut, yeah, the first sales hire with a quota, the second, the eighteenth you're on now, the comp structure, yeah, what's the quota target?

Matt Britton

02:52>> I mean, we shoot for a five to one ratio. So for every $5 sold, seller gets a dollar and, you know, on target earnings, obviously it varies within our sellers. Their quota increases as they continue to gain tenure at the company because their pipeline builds. We actually have two different teams at our organization. We have a net new team and an expansion team. So some of them seasoned sellers on the expansion team because it's more of

03:16>> a strategic sell. When you're selling net new, you're talking more about your product because theoretically, you don't know as much about the company. When you're selling an existing large enterprise like a Microsoft, we need to understand how to map the organization, you know, speak to their business terms and their KPIs. So it's really a job for a more seasoned seller to be able to expand.

Nathan Latka

03:32How many of those 18 folks are on the net new team versus the expansion team?

Matt Britton

03:38>> Seven are on the expansion team right now and 11 are on the net new. So, yeah. We've got a sixtyforty mix in terms of our revenue ARR growth each year,

Customer Success and Net Revenue Retention

Nathan Latka

03:48net new 60%, 40% expansion. 40% expansion. Okay. And so there's a lot of people, there's a lot of founders at your level, your ARR that are starting to seriously ramp, become a CSM team and expansion team, whatever, but customer success with a quote, with an expansion target. So so how do you how do you step up your expansion team?

Matt Britton

04:07>> You got it. So our customer success group is is compensated on net revenue retention because some of their customers return, some will expand. And and in terms of direct revenue correlation, they're more focused on upsell versus cross sell. So for example, if we have a license with Gillette for a $100,000 and the CSM renews them to a 110, that 10,000 of ARR is upsell. But if we go from Gillette to Tide, which is still in the

04:32>> P and G portfolio, that's a cross sell. So that's more what our sellers do.

Nathan Latka

04:36Does the CSM make commission on the 10 k additional revenue or 50 k ratio for other

Matt Britton

04:39>> It's more of a bonus type structure, but yes, they're compensated on it.

Nathan Latka

04:42Yes. But not as a direct correlation that you would see in like an AE?

Matt Britton

04:45>> Yeah. Because because we want them to be real partners of our customers and not really trying to I mean, if they get our customers to get the most value out of the product, then the customers are gonna stay. They're gonna tell their counterparts about it. They're gonna expand their spend. We So really want them to be more of a partner of the customer, the CSMs versus just being so revenue focused that they might lose sight of

05:03>> that.

ACV Growth and Moving Upmarket

Nathan Latka

05:04With this new expansion team of seven and the CSM team, your ARPU back in the day was about 5,400 in 2019. I imagine it's probably expanded. What's your monthly On an annual Monthly Monthly basis.

Matt Britton

05:14>> Yeah. So you're talking about 65,000 right now, it's at a 110,000. Wow. Okay. So that's this is working then.

Nathan Latka

05:19Mean, that is

Matt Britton

05:19>> We're going upstream. So, you know, if you look at some of our competitors, you the publicly traded ones, they talk about wanting to go to the enterprise, wanting to go to the enterprise, where where would they wanna be? And I see our company at a 100,000,000 ARR having a 250,000 to 400,000 ACV and, you know, maybe even having less customers because what we're finding is, you know, there's basically four quadrants of customers. There's small companies, small

05:42>> spend, small company, big spend, big company, small spend, big company, big spend. The big company, big spend companies do about a 145% net revenue retention, While the small companies, small spend companies do about 58% net revenue retention.

Nathan Latka

05:56You're looking at your last twelve months of history.

Matt Britton

05:58>> Yes. Exactly. So what we we made a conscious decision that if it's a small company and not spending a lot, we're just not gonna prioritize it because the unit economics aren't there. The LTV is not there. The logo retention, expansion. But on the flip side, if we are already doing a lot with large companies, you know, we're finding that the sky's the limit.

ARR, Run Rate, and Growth Rate

Nathan Latka

06:13Yep. Can I take 350 customers, say at a 110 ACV average, you're doing about 3,500,000 a month?

Matt Britton

06:20>> We're doing a little less than that. Okay. Because some of the customers there's customers and there's licenses. So our ARR is, know, this year going to be between 35 and 45,000,000.

Nathan Latka

06:32And right now you're around 40, right?

Matt Britton

06:34>> Run A rate little less, a

Nathan Latka

06:36>> little less than 40.

06:36And what does that mean in terms of growth rate year over year?

Matt Britton

06:39>> This year, we're shooting for growth rate of around 70 to 75%. I think next year could accelerate. It's accelerating this year. Last year, it was like 68%. Got it.

Nathan Latka

06:47Because we weren't

Matt Britton

06:48>> funded to invest in the business and now we are.

Nathan Latka

06:50Yep. So if you hit 45 in AR at the end of this year in December, that means you finished December 2020 at what, around a $35,000,000 run rate?

Matt Britton

06:57>> No, because we're going 75%. So we're in a twenties.

Series D Fundraise and Capital Strategy

Nathan Latka

07:01Okay. 25. Got it. So then it would be a $27,000,000 run rate, something like that Exactly. Interesting. Okay. This is great growth. Now you use this growth to go out and do a new series d round. Tell me about that.

Matt Britton

07:13>> So, you know, there are a couple of things driving it. Originally, we didn't wanna raise money until the end of this year, maybe early next year, because we had raised last year, we put about $20,000,000 on the balance sheet through a series c in a series c extension round. The series c closed in March 2020, the extension round closed around September 2020. And the total

Nathan Latka

07:29of that was 35,000,000 or 20?

Matt Britton

07:31>> The total that went on the balance sheet is 20. There were some secondary to take out So some there was 20,000,000 of new capital that went onto the balance sheet. We didn't burn because we're pretty capital efficient. We do above a one to one ratio of annual burn to new ARR. So we had, you know, a decent amount of capital on the balance sheet, but it's a frothy market. It's a competitive market. You have companies like

07:52>> Qualtrics and Medallia, who what Medallia was publicly traded, they just got taken private. SurveyMonkey, you've mentioned user testing, user zoom, it's a busy space and we need the firepower to go against these companies. We've executed incredibly well, but at a certain point, you need to invest in the engineering, the sales and marketing support, etcetera, to really compete if we wanna reach our goal, which is take the company public. So since we had a good investor, we

08:14>> had the right valuation, and we just thought now is a good time to strike and allow us to be even more aggressive. And that was what was behind the round.

Nathan Latka

08:20Was the post money valuation above 500,000,000? No. Okay. Well, you can be there. I mean, you've gotta be really close.

Matt Britton

08:26>> Yeah. I mean, growth rate isn't it's funny. The West Coast VCs want a 100% growth. They literally it did. The West Coast VCs didn't care that we weren't burning a lot of money. They just want a 100% growth. It's kind of silly to me because we could have spent a lot more money and got there. And it could have even been with the wrong customers. We don't service other SaaS companies. I think a big house of

08:44>> cards in SaaS right now is SaaS companies who have a customer base that is other SaaS companies.

Nathan Latka

08:49That are funded SaaS companies burning money.

Matt Britton

08:51>> Exactly, the down market that's the first to go. Our clients are Procter and Gamble, Johnson and Johnson, Microsoft, you know, Coca Cola, you know, we have blue chip companies who aren't gonna go away. And I think that but the I don't think the West Coast VCs value that at all. And that's why we ended up doing a deal with an East Coast Private equity firm who was, I wouldn't say equally as aggressive, but aggressive in terms

09:12>> of valuation and really understood and believed in what we're building.

Nathan Latka

09:14When I hear private equity, think secondary. Did all

09:17the 46,000,000 go on the balance sheet?

Matt Britton

09:19>> The majority of it did. Yeah.

Nathan Latka

09:20Okay. Interesting. And can you share the valuation?

Matt Britton

09:23>> I can't. No. Okay. Because if I share something to you, I have to share it to all the other shareholders, blah blah blah.

Nathan Latka

09:27Yeah. Yeah. Yeah. I know. Fair enough. Fair enough.

Matt Britton

09:28>> But I honestly, I don't even know what I can share. This is all new territory.

Nathan Latka

09:32If you're asking me everything. Exactly. Let me ask you a different question. Obviously, as a founder putting your Founder hat on, just wanna be sensitive to dilution. Now you're okay with a much bigger pie, you want an IPO, so I get it, you're going for the gold, but like how much equity do you still own?

Matt Britton

09:45>> I mean, that I'd rather let's just say it's less than 15% and more than 5%.

Nathan Latka

09:49It's like, would you do anything differently to try and preserve more now looking back or no, you're okay with 5%?

Matt Britton

09:53>> Well, this business that if you'll remember, the origin of this business is is an interesting one. We had incubated software within my agency, MRY, and I spun it out. And then I went on to sell the agency and I put in a different CEO to run it who basically so he was theoretically the founder even though I incubated into my agency. And then I came in and we pivoted. So the origins of this business on the

10:14>> cap table is over ten years old. So this isn't a traditional startup that was started in a garage in Palo Alto. So I don't think there was anything I could have done differently. You know, we're achieving tremendous scale. And to me, it's not about the ownership, it's about the outcome. And and, you I'd rather have a smaller piece of a bigger pie and that's really where we're going. You're at five Obviously, you'd always like to own

Nathan Latka

10:33>> more, right?

10:33Of course. Anyone would say that.

Matt Britton

10:35>> You're at five to 15.

Nathan Latka

10:36Does the agency sit on the cap table as well?

Matt Britton

10:38>> The agency shareholders did. So the shareholders of the agency, at that point we had already sold the majority stake to private equity. So basically there's a private equity firm that was the majority shareholder of the agency who then became a majority shareholder of Crowdtap, which ended up becoming Suzy. And they were actually one of the ones that liquidated last year as part of the secondary because they've been in it as part of a ten year old

11:02>> fund, but they already made a three and a half X times return when I sold my agency. This is just, you know, cherry on top of the cake, so to speak. Fascinating.

Nathan Latka

11:09What did see the agency for again?

Matt Britton

11:10>> I sold the agency for 50,000,000. In what year? 2011.

Nathan Latka

11:15Okay. Yeah, that was right before this. Interesting. Okay, cool.

Matt Britton

11:17>> Now we are raising 50,000,000 of capital. I mean, times have changed and it just goes to show you how much better of a model SaaS is than an agency model because that took me twelve years to get that exit. And, you know, we're probably 10 times as valuable or close, right? After only being in business for three and a half years. Yeah. No, so I'm more, much more of a disruptive product, but just goes to show

11:37>> you, you know, you can get product market fit, how much value you can create.

Nathan Latka

11:41Yeah, no, this makes a lot of sense. Okay, cool. What about M and A? You have capital management, go buy some We companies are, we are.

Matt Britton

11:46>> We're looking at companies in a variety of different categories, whether it's syndicated research. We have our own audience, our own consumer audience. So we have interest in expanding that around the world, as well as getting into other verticals, whether we have panels of IT decision makers, information workers, things like that, partnering with publishers, etcetera. So we're very acquisitive right now. We also have access to a debt facility to, you know, go after additional acquisitions if we

Nathan Latka

12:10>> want to.

12:10How cheap can a company like you get debt today?

Matt Britton

12:14>> Fairly cheap. I mean, it depends upon how you define cheap. I mean, it's not credit card debt. You're looking at probably 8%. We can get that especially with the cash on our balance sheet.

Nathan Latka

12:23And I was gonna say, how much can you get relative to your ARR, like 2x AR or 1x AR line or what?

Matt Britton

12:28>> Well, we haven't tried to push the limits of that yet. So I couldn't answer that question. But Apple is not really concerned for us right now, thankfully, but you know, can never rest on your laurels.

Consumer Network, Gross Margins, and Competitive Moat

Nathan Latka

12:37Matt, as we wrap up here, I wanna talk a little bit about the marketplace. You have a bunch of these consumers on the platform ready at any instant to a PNG product. How many, like, of those people are in your network?

Matt Britton

12:45>> So we have 1,400,000 registered users of Crowdtap that are on gamified apps on both iOS and Android. On a monthly basis, you know, you have anywhere between 50 to a 100,000 that are active in some way, shape and form because they're targeted by our clients based upon the first party demographic data we have on those users.

Nathan Latka

13:01And what do you pay them every, every time they test a P and G product, give you feedback?

Matt Britton

13:04>> So they earn points, which they can cash in towards rewards. We have a reward store within Crowdtap where they can get digital currency like a Spotify gift card or an Amazon gift card or things like that.

Nathan Latka

13:14So last month, how much did you spend just on gifts for your consumers exchanging points?

Matt Britton

13:19>> It comes out to around 10 to 15% of our of our revenue.

Nathan Latka

13:22Our biggest.

Matt Britton

13:23>> Why not even COGS?

Nathan Latka

13:23Yeah.

13:24But so is that bad or good? I don't know.

Matt Britton

13:26>> Well, I mean, I look at it, what's the gross margin of our company and our gross margins are in the mid seventies, which is good for SaaS. I mean, it's not amazing for SaaS, it's right down the fairway. So it's it's COGS. So to me, as long as we can maintain our gross margins, we're in good shape. It's better than any other market research friend that we compete with because none of them have their own audience.

Nathan Latka

13:42Own those platforms, those gamified apps though. Right?

Matt Britton

13:45>> Yeah. We own the app, we own the brand, we own the users. Every other company actually has to buy users from a programmatic audience platform if they wanna provide an audience. We we're almost we have a vertical model. We have our own users and our own front end platform, which makes us unique.

Nathan Latka

14:00Nice arbitrage. Yep. And so so how do you keep users active on those apps when really they're just answering surveys all day long? Is it literally like they're playing like a mini version of sellers of Catan and then a little ad for P and G It's pops

Matt Britton

14:11>> not even ad, they're not playing a game. It's just the questions are the game. People love giving feedback and the difference is you're not filling out long form surveys. It's like, what'd you eat for dinner last night? Chipotle, like what's your favorite color? Blue. It's very quick. It's quick hit. So people will do it when they're online at Starbucks or instead of playing Words With Friends or something. And we have a great team. We have an

14:29>> entirely different team in our company. That's just the Crowdtap engagement team that focuses on engaging, acquiring and retaining these users.

Nathan Latka

14:36That's a huge deal. Yeah. So you'll, you'll sneak a question in there after the Chipotle answer. You'll say, did you use Dial or I wear soap last night? Something like that.

Matt Britton

14:42>> Right. And, and during the fundraising process, a lot of these had a hard time wrestling with the fact that we had, we also had a B2C product and a b to b product. It didn't fit right in their template, which took a lot of explaining as well.

Famous Five: Books, Tools, and Advice

Nathan Latka

14:54Yep. Alright, Matt. Let's wrap up with the famous five. Number one, favorite book.

Matt Britton

14:58>> I like Blitzscaling right now. That's what I'm reading right now because we're about the blitzscale.

Nathan Latka

15:02Number you are blitzscale.

Matt Britton

15:03>> Scaling.

Nathan Latka

15:04Number two, a CEO you're following or studying?

Matt Britton

15:08>> I always follow Ben Horowitz really closely. I just love the way that he thinks about business. I also love his book as well, The Hard Thing About Hard Things.

Nathan Latka

15:15Number three, what's your favorite online tool for building a business?

Matt Britton

15:19>> InsightSquared, which is a tool that sits on top of Salesforce that allows you to obsessively check your pipeline and your unit economics of sales. Checked that all day long.

Nathan Latka

15:29I meant to ask you this, Qualtrics is a big player, lot of cash in the space, you must have had acquisition offers, what's the largest acquisition offer you've turned down?

Acquisition Offers and IPO Ambitions

Matt Britton

15:36>> We've had people throw around, you know, between 10 to 12 times revenue, not recently, because we haven't even entertained the ARR rather, but we haven't even entertained the offers as of late. Yeah. I wanna take the company public, I don't wanna sell it. I mean, never say never, but I've already sold the business. Wanna to me, that's the NBA championship of business is taking company public and that's what I wanna do.

Nathan Latka

15:58Yeah. And and you you fit the model perfectly of like these rockstar founders because you already have your life stuff taken care of from your first Yeah, I'm

Matt Britton

16:05>> old, which means also are the people I old in business, means they're senior, which means they can make big decisions. That's another thing, so I'll come out with these. I I think there is ageism going on. I can't believe I'm talking about it, but it's like, you know, we're not the young graduate from Stanford, but I've been around the block. I've been through the financial crisis. I've been through, you know, nine eleven, all this stuff. And

16:26>> because of that, I think you can weather more storms, just more experienced.

Nathan Latka

16:29I don't I'm looking closely. I don't see any great in here yet.

Matt Britton

16:31>> Nothing against young guys like you, but Yeah.

Nathan Latka

16:33You know, you know, I'm pushing my forties here soon. Give me give me a couple of years.

Matt Britton

16:36>> I saw you've upgraded your kitchen as well. So good for you.

Nathan Latka

16:39A little bit of an upgrade. Yep.

Matt Britton

16:40>> Real nice. Real nice.

Nathan Latka

16:41Number four. How many hours of sleep do you get every night?

Matt Britton

16:44>> Six to eight. Six to eight.

Nathan Latka

16:45And situation, married, single kids?

Matt Britton

16:46>> Married, three kids.

Nathan Latka

16:48Wow. Okay. And how old are you?

Matt Britton

16:49>> I am 46.

Nathan Latka

16:5046. Take us home. Something you wish you knew when you were 20, Matt.

Matt Britton

16:54>> That your network is everything. Don't just be at a conference or a virtual conference looking for the person with the Nike or P and G badge because you never know where the person with a a company you've never heard of will be in twenty years and just try to really create connections with as many people as you can and hold on to those connections for dear life because your network is everything, especially when you wanna start

17:12>> a business or change jobs later in life.

Closing Summary

Nathan Latka

17:14Guys, suzy.com, great user research tool for the CPG brands like PNG did a $46,000,000 raise earlier this year. We'll say flirting with a $500,000,000 valuation. They grew revenue from 27,000,000 in ARR at the end of last year to over 40,000,000 or flirting with 40,000,000. Right now, I think they'll finish the year about a, you know, $45,000,000 run rate. We'll see what happens scaling the team big time. 200 people on the team, 65 engineers, and again, three

17:36fifty customers. They're serving up today at an average ACV of 110 net dollar retention going through the roof as they keep scaling eyeing that IPO date. Matt, thanks for taking us to the top.

Matt Britton

17:45>> Thank you. Love your show. Talk soon.

Nathan Latka

17:48One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it. And the buyers try and make a deal live. It is fun to watch every Thursday one

18:13p. M. Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at two p. M. Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's

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