How Usertesting CEO Jamie Anderson grew Usertesting to $140M revenue and 3.5K customers in 2021.

you're gonna love this interview just got done editing it i'm glad i got it live for you i'll be in the comments for the next 30 minutes hanging out answering any questions you have in fact leave a comment below about data points or what you think is going to happen to the company and i will respond to every comment additionally if you're just loving the content click the thumbs up and i will go and check out your profile as well and give your videos some love as well in the meantime enjoy the interview hello everyone my guest it is andy mcmillian he brings 20 years of enterprise sas experience to usertesting.com as a former former product executive at oracle in salesforce he saw the critical role that customer centricity plays in creating great experiences andy you ready to take us to the top absolutely all right so so we're in kind of unprecedented times obviously with this kind of virus crisis user testing is in an interesting spot because well many people would would wonder does this hurt or help you in terms of what you provide online so give people the quick kind of product overview and then you know what are you thinking about literally in this moment right now markets crashing what's going to happen yeah it's an interesting uh way to think about it i guess we um we are a product that helps people understand and view the experience often of their digital products so if you want to kind of virtually look over the shoulder of your user and understand what's it like to do mobile banking or to use your mobile ordering app or to do whatever that might be that's what our customers use our platform to do this has been an interesting moment in time for us like most folks we've moved to kind of a work from home remote stance for our employees but a lot of our customers are now reaching out to us and saying hey one we're standing up more and more digital channels to help people who are maybe in a shelter in place or whatever it might be that they're dealing with it's also interesting from a product and marketing messaging perspective i actually believe most people in most brands are trying to be empathetic and do the right thing and reach out to their customers and help but even that is a hard tone to get just right where you don't want to seem opportunistic like you're taking advantage of a pandemic to push your product at the same time you might be sitting there thinking our product can be really helpful to people in this moment and just like our company we're going through that we're reaching out to healthcare systems and everyone else and saying hey can we help you make your messaging clear and kind of help with the emergency people trying to strike that balance and so we're seeing a lot of customers use our platform to test their messaging and test their content to really understand how it's received by their end customer and just so i want to get more about kind of how you're handling this from your own perspective as well will churn spikes happen how do you change your burn plans what are your you know investor calls sound like over the past three days we'll talk about that in a second but give people a benchmark context here so uh how many customers are you now serving today and is it all pure play sass so it is all pure place sas uh we started the company years ago i was i joined two and a half years two years ago now but the company started 12 years ago it was originally a pay-as-you-go business where you could pay to get a single video for the past five years it's been entirely a subscription-based sas platform about 35 000 people have ever tried the product or used it as a pay-as-you-go model we have about 3 500 sas customers that are paying us on an annual subscription base 10 conversion is not bad andy it looks pretty good yeah it's right it's a great business um i'm very proud to be a part of it uh 3 500 and then help me understand kind of pricing last time you told me average you know the company's gonna pay you two two grand a month based off how many tests they're running with you is that still about accurate it is for kind of an smb customer and then we scale way up i mean we're doing um you know supporting massive research teams and design teams at some of the largest tech companies in the world that might be spending you know over a million dollars a year with us okay and have you changed anything about your your cap table structure or still about 74 million dollars raised uh we actually just raised around so uh we're doing this interview we're recording it we're gonna do a press release uh in two days okay but we just raised 100 million dollars from uh insight partners um and have yet to announce that publicly but pretty excited to have raised that yeah will and it sounds like we'll probably release these around around the same time there give me timing on that uh was the money wired and the deal done prior to you know the wuhan news and the spread of coronavirus being you know mainstream news yeah we closed i want to say three weeks ago four weeks ago so really before it hit the u.s i mean it's been kind of an interesting it feels like a fast evolving story but if you go back i mean it was december when we were first starting to hear about the challenges in in some parts of the world but um yeah we closed the round of funding before there was really a significant u.s impact yeah or even really the impact of the global supply chain that we saw happen yeah and then this is obviously gonna be rapidly changing as you figure out how the best way to use i mean you're a very fortunate position to be on this kind of cash heap now you can really do some serious damage with it especially if you look at a you know everything else is being cheap right now what's your team size say though how many people uh we're about 500 people and how many engineers uh probably 80 out of that okay and any quota carrying reps yes we have uh smb mid market enterprise and global account teams that support that how many total people carry reps or carry quota i think we're at 55 right now oh wow okay fairly significant that's good um okay so with those with those kinds of uh benchmarks um and again i mean look by the way from a growth perspective that sounds pretty healthy right so if you've got 3500 paying customers at you know still around that two thousand dollar arp i mean that puts you at about seven um seven million a month you were at five at least 5.5 million a month about oh what is that 19 months 18 months prior when you last came on does it sound about right yeah we're we're growing pretty rapidly um the business last time we spoke about 18 19 months ago was what's growing about 25 a year a very healthy business um we've really seen it pick up i think in many ways uh we're riding this wave of people being focused on customer experience and understanding their customers and building customer empathy so we're going to cross 100 million in arr probably mid this year uh growing about 40 percent so we're actually speeding up as we get larger yeah andy the overlook so so again i'm not a guy to you know give softballs or a lot of compliments to founders you know you know i see a lot so it's hard to be impressed but you you rarely see a situation where someone goes from call it 40 50 million in 2017 to 65 70 million in 2018 so call it 25 30 growth and then actually see growth pick up with on a larger base because it's much harder with a larger base what what drove your ability to do that i think it's a couple things i mean there is a market dynamic uh that's supporting us i mean product market fit goes a long way when you're trying to grow and we are seeing a dynamic where um two things are really happening one our core audience was originally these folks called ux researchers people that are part of a product team they're kind of understanding the usability of the product understanding the flows and things like that that is is growing so companies are investing in our core audience of buyers and they're therefore buying more of our product we're also seeing this trend where outside of that core you know buying group that we originally had other teams are realizing the value of our product they're saying boy we should watch and see what it's like for people to use our product they want to build that empathy and customer intuition so we're seeing product teams design teams marketing teams um getting on the product running their own tests understanding their customers more closely more deeply and really scaling so where our largest customer couple years ago might have had you know 20 or 30 seats we have a customer right now we're working with that's looking at doing you know over 10 000 seats with us because they want to see everyone in the company who builds or markets or designs the product be able to have that direct interaction and see people using the product and so i think those two things combined have really created kind of a perfect storm for growth for us you touched a little bit about your ability to drive expansion revenue on a per seat basis i want to loop back that here in a second what's gross revenue churn like it looked like over the past 12 months uh we've actually seen improvements on gross revenue churn as well uh we're at about 86 right now retention so call it 24 sorry 14 uh gross churn yep um and again we sell on all segments you see you know higher numbers in the smb segment that's a weighted that's a weighted average across all because...