Survey Analytics' Bhaskaran: 'Money doesn't drive me' |
Connect with TechFlash on our Facebook page for all the latest technology news headlines and commentary, plus information and access to special events, photos from events, promotions and more.
Vivek Bhaskaran/PSBJ photo
Vivek Bhaskaran's journey to the Seattle tech community has been a long one, from high school in India to an engineering college in Russia to Brigham Young University in Utah. But now the 33-year-old is firmly rooted in Seattle, building the profitable and growing online survey company Survey Analytics. We chatted with the fast-talking and foul-mouthed Bhaskaran about bootstrapping, competition from Survey Monkey, social media and more.
On leaving Russia for the U.S.: "In hindsight, those two years (in Russia) kind of toughened me up to a point. It was fairly brutal in a sense. I was just out of high school and I'd say by the time I went -- it was 1995 to 1997 -- it was not the worst time.... It had seen darker days, but still it was not a walk in the park. But I remember when I came to the states, things were so much easier for me. Not that I had been through a lot, but everything just happened. And there were rules and laws, and things were more structured. Russia is a lot like India -- chaos, unstructured, everything is moving. So, that actually helped me a lot when I came to BYU."
Why did you choose BYU? "Because they gave me the highest transfer credits.... I was like, shit, I have to get out of (Russia) before I kill someone or get killed. It was an unbearable environment, really."
On leaving Utah for Seattle. "After graduation, I was like I have to get out of Utah. You got to get the hell out of Utah, right? I mean, it was cool to hang out. But I couldn't see a future there. The beer is watered down."
How did you start Survey Analytics in 2003? "For two years, I bootstrapped it, which means I was doing a day job and in the evenings I was working on it. Everybody at eSage (where I was working at the time) knew that. But 2005 is when I quit my job. It is pretty simple. In 2005, we made $220,000 and I said: 'alright now we have money' and that gave me enough confidence to say: 'Ok, at a minimum I am not going to beg and plead.' So, in the traditional sense I didn't take that big of a risk since I was working my day job. It was a ton more work to do. But we got lucky a little bit because we were charging $4,000 per year in licensing, so there was enough cash coming in and that worked out in our favor."
On founding Survey Analytics during the dot-com bust? "We all rode high during the dot-com boom at eSage, and we were all making loads and loads of cash. But consultants were the first ones to get kicked out the door, and there were tons of bodies sitting around doing nothing and that's when I started thinking, shit, I need to get out of consulting business because you make good money but really there is no scalability."
How did you come up with the initial idea for Survey Analytics? "When I was at BYU, I was cornered by a market research professor there who wanted to create a generic tool for market research surveys. He got constantly contacted by McDonald's and all of the big guys to conduct research and what they were doing at the time, every survey was a project... and they were starting from scratch every time. He germinated the idea to create a generic engine ... so we could build one database and somehow reuse that. And that stuck in my head... and I thought it could be a real business on its own."
How do you describe the business today? "We look at it as an online listening system. We have broadened ourselves into marketable areas, so we have QuestionPro -- which is kind of the flagship money maker if you will. Survey Analytics is the enterprise version of QuestionPro. And then we have IdeaScale, which kind of germinated late in the game and originally came from the idea of qualitative feedback. Surveys are very much, ask a question and give an answer. But what if I don't know what to ask and I want to keep things open ended? And then we have another tool called MicroPoll, which we tried to make money on but we never figured out how to make money on. It competes with PollDaddy straight up."
What's an example of a company using the service? "Rosetta Stone market research uses our tools for all of their research needs. CareerBuilder is my customer, Facebook is a customer."
Do you harvest or aggregate the data that you collect in the surveys across your customer base? "No. We couldn't, right? It would create enough friction in the system. When a new customer comes on board, there should be no questions about data. It is such a primordial issue that I don't even want a speck of dirt on it. This is market intelligence, so perceptually my (customers) don't want anyone else to know about it.... We have toyed around with that idea, but I think that would create a cloud of doubt that it would defocus us from our core proposition."
Aren't customers concerned about you housing that core research? "That used to be a big issue, but I think we've gotten past that....Today, it is a no brainer. I can't remember the last time I had a conversation with someone where they wanted to host it on their site inside their firewall. That conversation is over."
What is the pricing model? "For QuestionPro, it is very simple. It is $15 per month or $99 per month for an enhanced feature set. For Survey Analytics, it is a little more nuanced and it is more of a one-on-one sale and it ranges from $20,000 to $60,000."
On how the online surveys drive more business: "We got really lucky because our business model is intrinsically very viral.... It is a fact that usage of my product brings me more customers... It took us a long time to understand that, but every customer gets me a new customer. That's why we have unlimited surveys."
On how that differs from the competition: "A majority of our competitors came into this business from the telephone survey business ... and if you look at their model it has been cost per survey.... When they jumped on the Internet surveys, they continued that pricing model because that's what they were used to ... but we all know that doesn't really make sense online because there is no costs associated with it. That's why we said we would do unlimited surveys. I don't really care. If a client sends out one million surveys, I love it. Because how do I get a million people on my site? I have to pay Google five cents per click for a million impressions."
What sort of revenue will you do in 2010? "We'll do about $4.5 million."
On correcting marketing mistakes last year: "Last year, we made the mistake of putting the enterprise business and the QuestionPro business together. And now I have separated it out. It was a brand mistake.... If you step outside the weeds ... what was happening was the lower end guys thought we were too expensive and walked away and the really high-end guys said this is a piece of shit because it is an $18 product and we don't want to deal with it. So, we were kind of getting slammed from both sides."
Have you ever taken outside capital? "No, we make money."
What's your end goal for the business? "Every year, I get at least one offer (to sell). But every time I go into an M&A conversation I get the offer, but I don't like the multiplier....It is probably because we are spinning off cash. We have built a model, even at $99 per month, I actually make a lot of money on the $99.
You seem small with just over a dozen employees given the amount of revenue you are driving? "That's the beauty of a software business. The point is, for software companies, you really don't need that many employees. But we are douche bags and we skimp a lot."
What keeps you up at night as an entrepreneur? "Competition. We compete with Survey Monkey every day, and I need to fight it out with them. Competitors are wanting to eat my lunch and I want to eat people's lunch. That's the thing that drives me."
What's your plan for competing in this market? "I think we are in more of a stable business. I am not reinventing anything. Online surveys have been here forever, and it is not like I came up with a brand new idea. It is good and bad because there's a lot of money in it. It is bread-and-butter stuff. Market research software is in the budget of every major company, so there's money to be made which means a lot people want to chase that down, which means I have to come up with a better business model. I have to come up with a different way of doing it. I know 14 companies that have gone out of business that I've seen the mistakes that they've made."
How do you compete with the brand recognition of Survey Monkey? "How do you compete against Kleenex, that's the big question? They are the Kleenex of the world. I have challenges no question about it. We have tried various different tactics and we have made some dents. QuestionPro is in the lexicon at least a little bit more. Survey Monkey's unique (visitors) are at eight, nine million. I am at two million uniques, and last year I used to be at 800,000 uniques... There brand is probably 10 to 20 times better than mine. Simple. In this business, if you have such bad-ass brand awareness than, yeah, you get customers for free without even thinking about it."
Could you take on capital to grow your brand to compete more aggressively? "Yeah, that has crossed my mind and so far this is the problem of running a bootstrapped and a self-funded company. Every dollar I spend ... I need the dollar back. So, I really don't know how to solve it. It is like spending money out of your own pocket. And you talk to any VC or any private equity guy and they will tell you the same, that you want a little bit of ability to be more bold in what you are doing.... We are getting to a point where we are looking at it as investors ourselves, looking it as an investment ourselves."
On the company's philosophy: "I used to think that at some point we'd get done with writing the software, but really there is no done. You can always move the ball forward. We ran the company with one philosophy that it is the journey, not the destination."
Couldn't Facebook become the ultimate market research company given the data they are sitting on? "They are so focused on solving the communications challenge. I think Facebook is all about communication, and that is a bigger, bigger market. That's massive."
On tapping social media to gauge customers' experiences: "Right now, rear view monitoring is there. But from a revenue standpoint there's not a lot of revenue flowing into that. But that's not to say it won't happen. It can pick up really fast, just like how it moved from telephone surveys to online surveys. There's a lot of chatter about social media research in general and I think it is a wide open field. Nobody really knows what will work and what won't work. We are also in it. We have a lot of tools to plug into social media to extract value from it, and who knows what is going to work.... It is cool to talk about, but so far my customers have been skeptical of anything that is non-traditional. Everybody is throwing a little bit of money at to see what happens. It is not to say that the tide won't shift, and that's why we are being proactive."
What about Foursquare and location services with online surveys? "With Foursquare there are definitely opportunities, for us to plug in there. We could say: 'You checked in, now can you give use some data.' You could offer a single question and then aggregate that data. I want to start working on that. I have not fully thought through that idea.... I like to put two or three skewers here or there in case something takes off."
On being an entrepreneur: "Money doesn't drive me as much as winning, which is very true for most entrepreneurs. Money is a measure and a chart, but that's not what drives me. And that's probably why I haven't sold out yet."
A CLOSER LOOK AT VIVEK BHASKARAN:
Age: 33
Hometown: Calcutta, India
First job: Tech support for professors at BYU.
Education: Degree in computer engineering from BYU.
On swearing: "I think it breaks the ice. Simple. And it gives realism."
Favorite TV show: The Daily Show with Jon Stewart.
Business Idol: Steve Jobs. "I like his idea of telling people fuck you to everyone and doing what he wants. It is kind of ironic because as much as I am in the feedback business, it is anti-feedback."
Hobbies: Motorcycles. "I had to give it up because I have two kids. My deal with my wife is after they are five years old and the college fund is paid for, I'll get back into it, I guess."
If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.