How Suzy Hit $60M ARR with 400 Enterprise Customers in 2022 (Interview with CEO Matt Britton)

Intro and Company Snapshot

Nathan Latka

00:00Suzy is helping big enterprise brands like Procter and Gamble and Gillette do market research. They've got over 400 customers paying an average of $150,000 a year and just passed a $60,000,000 ARR run rate, call it, this week, this month, up from 40,000,000 just a year ago, up and passing about 20,000,000 back in 2020. So really healthy growth rate. They did burn 25,000,000 net burn last year, but, obviously, that was the heyday. Now they've recorrected things. They've

00:22got plenty of runway to get through the end of next year and even further where they hope to break a sort of $80, $90, $100,000,000 run rate. Hey, folks. My guest today is Matt Brittney. He's the founder and CEO of suzy and best selling author of youth nation. Matt, you ready to take it to the top?

Matt Britton

00:34>> You got it.

Nathan Latka

00:36Alright. Now you're a regular man. I I I feel like I I had you on back, gosh, for the first time in early twenty twenty and then another time in 2021. And your story is unique in that I think you had your own agency that you sold before you went into your SaaS. Is that accurate?

Origin Story: From MRY Agency to Suzy

Matt Britton

00:50>> Yeah. We incubated what became known as suzy today while still running my agency MRY. The agency was acquired, but we had spun out the software company before the agency was acquired. And then after my earn out ended at the agency, I rejoined as CEO. Back then it was called CrowdTap, rebranded as suzy, and we launched in 2018.

What Suzy Does and Who It Serves

Nathan Latka

01:08So that's amazing. So talk about what you're working on today and sort of maybe give an example of how customers using you guys live.

Matt Britton

01:14>> Yeah. So suzy is a consumer insight software platform that's used primarily like by large enterprises. We our ideal customer profile is what we call super enterprises. The companies do over 5,000,000,000 a year in revenue. We primarily focus on technology, food and beverage, packaged goods, financial services companies in in those in that overall revenue tier. And what suzy provides is essentially a an on demand platform that allows these companies to talk to their target consumer and gain

01:44>> feedback quantitatively and qualitatively in a really rigorous form to allow them to make critical business decisions throughout the product development life cycle. So whether it's early on figuring out what product to launch or what should the packaging look like or what should we call it or what should the pricing be or what should the advertising be, At every single stage when these large companies launch a new product, there's decisions that have to be made. And we

02:07>> have built with suzy a research tool that allows them to run those decisions by the consumers that matter so they can be more empowered and ultimately making those decisions and increasing their chance of success.

Nathan Latka

02:17And there's a lot of research tools sort of in this space, whether you're a software company wanting to test a new flow or a toothbrush company wanting to test the bristle strength on a new toothbrush. Right? What's interesting though about suzy is you are vertically integrated here. You actually own a platform that users engage on actively, and then that's how you collect some of these survey based feedback. When we last spoke, these gamified apps, you told

02:38me had between 50 and a 100,000 monthly active users on them. What's that number look like today? Has it grown?

CrowdTap Consumer Panel and Audience Quality

Matt Britton

02:45>> We haven't even focused as much on quantity, and you're talking about our CrowdTap consumer panel, which we have a million registered users on. And on a monthly basis, you are correct. It's anywhere between 50 and a 100,000. Our focus has really been on the quality of those users. One of the big problems we're solving with online market research is there's a lot of fraud and spam. So when people try to buy, an audience to respond to

03:07>> a survey from a programmatic audience provider, what they often find is it's a lot of bots that are answering the questions. So our focus on the audience size has been less about building more quantity of audience because as long as we have a diversified network of people that deliver on the demands of our customers, we don't need to add more people. Right? But we need to make sure that they are people and they're well intentioned and

03:28>> they're providing the right answers. And that's really been our focus. We've actually have a patent pending for a product called Biotic, which is essentially a spam and bot detection tool that's built within our audience. And with that, we have the highest quality audience in the industry. And quality is really the only thing that matters in online market research.

Nathan Latka

03:47Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second. But you log in, you connect

04:10your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna

04:34get a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold the whole thing outright. Now what's cool about this is this is

04:56not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're

05:22going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at, and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right, we're gonna go back to the YouTube video here in a second, but

05:44if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into

06:10the interview. Yeah, guys. So just to get your heads around Matt Bismolet, it's the equivalent of, like, he doesn't own Candy Crush, but it's like if he owned Candy Crush. Right? And then Procter and Gamble wanted to get user feedback. He could basically put a survey up after you complete level three of Candy Crush and say, hey. We're thinking about a new type of candy. Do you like hard candy or soft candy? Matt, this is sort

06:28of a right a good example. Right?

Matt Britton

06:30>> Yeah. Exactly. CrowdTap itself is like a game game and and the users earn points for answering questions anonymously on behalf of brands. The points are cash in towards digital rewards and currency. It's exactly how it works. And then what sits on top of this CrowdTap product is suzy, which is kind of the sophisticated market research tool that our customer interfaces with to launch these complex research projects.

Nathan Latka

06:51Now this does obviously have you know, the vertical integration is an advantage, but it also does hit your margin a bit because I believe 10 to 15% of your monthly expenses go towards paying these consumers to engage in these surveys. Is that true? And is it still 10 to 15%?

Matt Britton

07:05>> Yep. It's exactly 10 to 15. However, we're able to really maintain the overall gross margin profile in the mid to low seventies. So I wouldn't call it, it hits our margin because we're almost like farm to table. Other companies actually have to buy sample, some of our competitors, if they're gonna deliver a project for customers from a third party, which is more expensive, where we're actually mining, if you will, our own audience and delivering it directly

07:29>> to the end end customer. So it actually makes us more profitable on a gross margin adjusted basis and also opens up a variety of different features and functionality that other companies can't deliver based on this being vertically integrated.

Nathan Latka

07:40Oh, interesting. So your competitors might put this expense, we have to buy panel data below the line. You're saying they end up paying more than 10 to 15% anyway. You're just putting it above the line.

Matt Britton

07:48>> That's exactly right.

Nathan Latka

07:50Yeah. Really interesting. What are I mean, name two, just to put us in the right space. Name two of your competitors you think about.

Matt Britton

07:56>> Well, Qualtrics has really set the gold standard for online market research. So I want them as sort of the company when we started. We wanna be the next Qualtrics. The biggest difference being Qualtrics started with universities who are working away bottoms up. And when we entered the fray, online market research was in a much more mature space. So we did the opposite. We started with large enterprises and maybe eventually we'll work our way down. So I would

08:19>> call them sort of number one. Number two has always probably been SurveyMonkey. Okay. Just because they they had first mover advantage in the space, they rebranded as Momentive. They've hit a lot of, you know, struggles and headwinds just based upon their capital structure and really based upon what seems to be struggles they've had with getting into the enterprise and moving up market. But those are probably the two companies we'd look at.

Nathan Latka

08:39And so when we talk about moving to enterprise, obviously, we can look at ARPU as a way to, like, measure your ability to go into enterprise. Like, what is the average customer paying per month today?

Matt Britton

08:47>> So a 150,000 a year. So I guess it's about 12,000, 13,000 a month.

Nathan Latka

08:51Yeah. I mean, that's up from our interview in 2019 of 60,000 a year. It's more than doubled. What's enabled you to double it?

Matt Britton

08:58>> Land and expand. So essentially what we're building at suzy, which is different than some of the more point solutions, who ahead and mention the companies that just do one thing within market research is that we wanna be sort of like a platform that goes horizontal. So I mentioned that product development life cycle, when you land a big CPG, you might first start with a company that's testing their advertising or packaging, but then we'll just go to

09:20>> the other departments that aren't using suzy for research. And as long as there's trust in who we're delivering, we just pick off first, you know, going from, you know, brand brand, say Gillette, and they're using us for package testing, we can then use them for ad testing or use them for price testing. And then we could also go from going from Gillette to going to Tide or another brand at Procter and Gamble by way of example.

09:41>> So there's kind of a vertical expansion and a horizontal expansion within an enterprise, and that's what's driving up the average contract value.

Nathan Latka

09:48Give me more examples of a vertical expansion inside of a Gillette brand at P and G. Right? So package testing, ad testing, price testing. What else might they use testing on? Well, I mean, what about new products testing? Four blades on the razor instead of two? You got

Matt Britton

09:59>> You got it. Innovation is one of it was one of the biggest areas. So a company is launching a new product. Is there a demand for the product? Who is the target audience for the product? We also do a lot of merchandising and retail testing in terms of testing in store displays. We launched a product called suzy home, which actually allows our clients to ship physical products into consumers homes. They can try on clothing or

CrowdTap Product Mechanics

Matt Britton

10:20>> try a candy bar and give instant feedback to it. So literally any design design decision that you make in terms of the product rolling out, And and there's millions of decisions made a day. Many of which in the past were just guesses, suzy can. And the reason that they would use suzy and maybe not use research in the past is that research traditionally has been done through agencies, which are slow and expensive, where now you

10:43>> essentially have a direct to consumer channel to go to the consumers amount and get instant feedback. Literally, within the same Zoom meeting, answers start flowing in from our audience that can help you reframe your decision or valuate or validate your decision.

Gross Margin and Vertical Integration Advantage

Nathan Latka

10:55When I spoke with you last year, you said there's about 200 folks on the team of which 36 were in sales and 18 actually carried a million dollar a year quota. Where are they, those sales reps, typically landing this deal with Gillette? Is it package testing, ad testing, innovation testing? What's the order of operations of land and expand?

Matt Britton

11:10>> It's a great question. It really varies by category. And, you know, because you have matrix organizations like Google and Microsoft, which aren't as linear as that in terms of how their organization is designed. Often we go earlier in the product life cycle, so innovation or r and d versus later, which would be ad testing. But that's just based upon our product road map, any initial tools that we had built. But now we have a much more

11:32>> robust feature set as part of our products, so we're going in really across the board. And it's frankly whoever hires us first, whoever gives us that shot first, and then we just go the other direction.

Nathan Latka

11:41That's amazing. Alright. So how many brands or customers are you working with today?

Matt Britton

11:45>> We have 400 large enterprises that are working with us today.

Nathan Latka

11:48That's good. That's up from 350 when we spoke about thirteen months ago. Yeah. There

Matt Britton

11:52>> are we've shed a lot of the mid, you know, the mid market smaller businesses we've just stopped going after because what we've realized is that the the big TAM is with the agencies and the market research agencies and those market research agencies focus on the big super enterprise companies. So we've really made a decided shift to work, you know, work to go after these large companies where we can really expand our business with.

Nathan Latka

12:14No. It feels like it's working. I mean, 400 customers at a $150,000 ACV that puts you at what, a $57,000,000 run rate as of today?

Matt Britton

12:20>> Yep. Closer to 60 at the year.

Nathan Latka

12:2260. And that's growth. Where were you exactly one year ago? Do you remember?

Matt Britton

12:26>> We grew we're growing about 60% this year, 65%.

Nathan Latka

12:30Okay. So 40,000,000 to 60,000,000, something like that. Yeah. Interesting. Now you've raised a bunch. Right?

Competitors: Qualtrics and SurveyMonkey

Matt Britton

12:35>> We have. We've raised about a 100,000,000 to date.

Nathan Latka

12:38So how did you and I think the series when was the series d?

Matt Britton

12:42>> Series d was July 2021.

Nathan Latka

12:44Yeah. Because I think you were very kind when you last came on and you shared that was like a 40 to $50,000,000 round at somewhere around a $400 million valuation. Right?

Matt Britton

12:52>> Yep. It was a little less than 400.

Nathan Latka

12:54Fair enough. Fair enough. Talk what are you seeing in markets today? I mean, what are your board meetings sound like when the, you know, the economy starts tanking?

Matt Britton

13:01>> Yeah. I mean, you know, we have had a high burn profile over the last couple of years, not because our sales hasn't been efficient, but because we've over invested.

Nathan Latka

13:09Like, what'd you burn in 2021? Like, 10,000,000?

Matt Britton

13:12>> No. Closer to 20, 25,000,000. '20. Okay. Yeah. And and ultimately, the burn was not coming from our lack of sales That's net, right.

Nathan Latka

13:21Net burn. Yeah.

Matt Britton

13:22>> Net burn. It was it was coming from just over investment r and d. At its peak r and d was 65% of revenue because we had to catch up to Qualtrics. Right? If we're selling against them, we have to have a product. Now, you know, our product is getting there. And now what we can do is slow down that R and D ramp and let the revenue catch up. So, you know, next year we expect R

13:43>> and D to only be 30 to 35% of revenue, which is much more in line. And when you do that and you have efficient sales process, that's when you can kind of get burned under control. And in that regard, we expect to be cash flow positive fourth quarter next year. So to answer your question, what are our board meetings are, it's when are you gonna stop burning capital? Because we don't wanna have to rely on the

Average Contract Value and Land-and-Expand Motion

Matt Britton

14:03>> capital markets to fund our existence anymore in this environment. You can only really do that if you have an efficient go to market process, right, and you have high gross margins. You don't have that, it does so when the lever you can pull is R and D expense, right, and you feel like you're just gonna the pace of innovation will just slow down a little bit, then you can actually keep your revenue growth, but then drop

14:26>> your OpEx growth. Right? The second that you have to dip into that sales and marketing expense in order to get there, well, yeah, sure. You might slow down your expenses, but then you commensurately, you might slow down your revenue. And basically then you have a company that's not making money and isn't growing. So I think that's what a lot of companies are finding out now is where is the burn coming from? Because not all burn is

14:45>> created equal.

Nathan Latka

14:46And a lot of that $20,000,000, $25,000,000 burn of last year, I think you put towards a new product called suzy live. What is this product?

Matt Britton

14:52>> Yeah. So suzy live is an example of why we invest in r and d. And suzy live is actually an example of an innovation we have that even the best companies in our space don't have, which is we have the ability now to connect quant to qual. So say you are selling dresses and you and you're targeting millennial woman and you wanna know what dress they like the best, the red, white or blue dress, right? And

15:11>> say 70% say red. And then we ask them why and they say, because it makes me feel younger, right? We can actually then take those, that subset of the people that like the red dress and say it makes them feel younger and pull them instantly to a Zoom like interface, just like me and you were talking and do a live focus group or in-depth interview and ask them why the red dress makes them feel younger and

15:29>> actually have a detailed discussion all within the same workflow. So the ability to connect quant to qual in one workflow is something that traditionally has not been accessible or possible in market research, given the fact that 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. So suzy live is

Customer Count and Shift to Super-Enterprise

Matt Britton

15:52>> really a game changer for us because connecting to quant qual is kind of the holy grail for enterprise researchers and it does it in a condensed and efficient form.

Nathan Latka

15:59What's the name of the Qualtrics product that would come closest to suzy live?

Matt Britton

16:04>> You know, I don't even know. And and I don't I I don't really spend a lot of time thinking about competitors, and I was asked that earlier today. I look at our business metrics in terms of what's our conversion ratio down the funnel, how are we growing year over year. And as long as that's going on the right direction, then I'm more focused on listening to our our customers and NPS and what they're saying versus trying

16:24>> to chase what a competitor is doing. So, you know, I know that they're a gold standard because they, you know, they had a huge exit and, you know, they obviously sort of set the path for us, but that's sort of the extent of which I know about them. And I'm much more focused on our

Nathan Latka

16:37You're probably getting approval now right now at board meetings. Right? Q four board meeting, obviously, for your 2023 plan. What do you wanna grow revenue at next year?

Matt Britton

16:44>> 50 to 60%.

Nathan Latka

16:45Interesting. So you can I mean, can you get up to well, it'd be tough? Could you break a $100,000,000 in ARR end of next year?

Matt Britton

16:51>> We'll we'll be in the high eighties to low nineties a year from now. And then, you know, in a normal market, that's when you start thinking about an IPO. Who knows where it's gonna be? We have enough on our balance sheet now, though, to get through to the other side. And then, you know, your options really change once you're not burning capital anymore to access the capital markets and fund your future growth, especially with our sales

17:15>> efficiency. So who knows when we'd be able to IPO, I would say likely in the next two to three years, but probably closer to when we're at 200,000,000 ARR versus a 100. And definitely not when you saw the SPAC craziness of companies going public at 25, 50,000,000. Enough on your balance sheet

Nathan Latka

17:32quote to get to the other side. That's what everyone's trying to do right now. What is that for you? $20, $30, $40,000,000?

Matt Britton

17:37>> That's somewhere in that range. Yes.

Nathan Latka

17:39Yeah. Fair. So that's a combination of controlling burn and revenue from customers and also you probably still have some of that series d money in the bank.

Matt Britton

17:46>> Yeah. We have a good amount of series d and it's really just, you know, when when your OpEx growth is outpacing the growth of your revenue, you're gonna burn more and more. So what we've done is we've looked at R and D and G and A, the two of the three components of our OpEx that were really slowing down. You know, you get general operating leverage in your G and A, meaning you don't need another CFO

Team Size, Engineers, and Sales Headcount

Matt Britton

18:07>> or CEO, etcetera, given the size of the company. And then R and D, we're really slowing down the R and D hiring because we've gotten more efficient. The product has gotten to a very mature state. So now the revenue growth is outpacing the growth in the R and D. And the only thing that's continuing its growth in investment is sales and marketing because we have a payback for that. And that's just Yep.

18:24That works.

18:24>> Very oversimplified way of sort of looking at how do we get through.

Nathan Latka

18:27What's total team size today?

Matt Britton

18:29>> 300 people.

Nathan Latka

18:30And how many are engineers?

Matt Britton

18:33>> 80. 80 total between product and engineering. Sales? Sales is about 75.

Nathan Latka

18:38Interesting. Yeah. And and any more quota carrying reps? There was 18 a year ago.

Matt Britton

18:43>> No. We're in the twenties now.

18:44>> I think

18:45>> we have 24, 25 quota carrying reps. Yeah.

Nathan Latka

18:47Still a million dollar quota?

Sales Motion: New, Expansion, and Renewal

Matt Britton

18:49>> Well, I mean, it's really across the board, but yeah, that's an average amount. It goes up based upon tenure. We found that our sellers really grow in productivity with tenure in a very predictable way. Because they're planting seeds each year, like we're selling ultimately vitamins and not Advil. And, you know, so we're talk to people about market research, but they might not have a growing need. Not like we're selling cybersecurity, right? So I'm not going to

19:12>> always jump on the offer, but a year and a half later they might. So with every year, you know, our sellers kind of accrue these relationships in this pipeline and things come out of nowhere and they start to get more productive just based upon the work they've put in over the last couple of years.

Nathan Latka

19:26So you give each of your 24 reps, like what, 10 customers to work with for life and they can track that relationship year over year? So it doesn't it's not that clean.

Matt Britton

19:34>> We have net new sellers who are focused on just winning new customers and we also have expansion sellers, which work more closely with our customer success team that focus on those large super enterprise clients to do more account based marketing and expansion. So they're kind of two different motions because if you're a net new seller, you really just have to understand our product, right? But if you're expanding, you actually have to understand the company. And especially

Burn, R&D Spend, and Path to Profitability

Matt Britton

19:57>> if you're already working with them, there's an expectation you know the company. So those are kind of two different skill sets. So we look at those different, you know, there's really three components. Right? You have new, expansion, and renewal, and we have three different teams each responsible for those components of ARR.

Nathan Latka

20:11That makes tons of sense. Matt, we're out of time. Hell of an interview. Let's wrap up with the famous five. Number one, favorite business book.

Matt Britton

20:17>> I still love Hard Thing About Hard Things. I read it over and over, especially in this environment.

Nathan Latka

20:21Number two, is there a CEO you're following or studying besides Ben?

Matt Britton

20:25>> Well, right now, everyone's looking at what Elon Musk is gonna do next. So I don't know how I can have another answer besides that. So he would have to be my answer.

Nathan Latka

20:32Number three, what's your favorite online tool for building suzy?

Matt Britton

20:36>> I love I think I mentioned this last time, a tool called InsightSquared, which is a data visualization tool for Salesforce, which has been tremendous for us.

Nathan Latka

20:43Number four, how many hours of sleep do you get every night?

20:46>> Seven.

20:46Okay. And situation, married, single, kids?

Matt Britton

20:48>> Three kids, married.

Nathan Latka

20:50Alright. And what are you? 46 or 47 now?

Matt Britton

20:53>> 47.

Nathan Latka

20:5447. Last question.

20:55Something you wish you knew when you were 20.

Matt Britton

20:57>> I would say how important your network is and how important it is to kind of mind your network over time and keep in touch with as many people as possible because ultimately when we launched suzy, the way I got it off the ground was calling the people who I knew that trusted me that would take a chance in our product. So I think always be focused on keeping that network alive and growing over the years.

Nathan Latka

21:17Guys, suzy is helping big enterprise brands like Procter and Gamble and Gillette do market research. They've got over 400 customers paying an average of a $150,000 a year and just passed a $60,000,000 ARR run rate, call it, this week, this month, up from 40,000,000 just a year ago, up and passing about 20,000,000 back in 2020. So really healthy growth rate. They did burn 25,000,000 net burn last year, but obviously that was the heyday. Now they've

21:39recorrected things. They've got plenty of runway to get through the end of next year and even further where they hope to break a sort of $80, $90, $100,000,000 run rate. We'll see what happens. Matt, thanks for taking us to the top.

Suzy Live Product Innovation

Matt Britton

21:48>> Thanks so much. Looking forward to being back again.

Nathan Latka

21:50One 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, 1PM

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