Academic researchers had to publish studies no one had run before, so they needed to design their own experiments and collect the data themselves Q1. Cheap web polling tools handled simple questionnaires but not the randomized versions, custom interactions and scripted experiences that experiments required Q1 Q26. Specialist research firms could do that work, but academics had almost no budget for them Q2. Companies, by contrast, mostly paid consultants and outside firms to find out what their customers thought and had little wish to run research themselves Q1. The demand for sophisticated do-it-yourself research sat in universities, among users who were exacting and poor.
Qualtrics
Qualtrics built serious research software for academics, trained a generation of students on it, and followed them into companies, where one research engine grew into company-wide programs.
How Qualtrics won
- 1 · 2002–07Sophisticated research, self-serve, for academicsA marketing professor's tool, shaped by demanding PhD users, let non-specialists run serious studies themselves.Democratize the Expert Task
- 2 · 2002–13Seed universities; train every classA focus on 250 schools grew to 1,300 universities and 95 of the top 100 US business schools by 2013.Educational Seeding
- 3 · 2008–12Graduates pull it in; inside sales lands accountsFormer students asked employers for it as research budgets moved in-house; 4,000 enterprise customers by 2012.Land and Expand
- 4 · 2012–18One research core, several experience productsCustomer and employee products ran on one rebuilt Research Core, launched as the XM platform in 2017; net retention 143% among Global 2000 customers (2018).Multi-Product
- 5 · 2016–Switching costsPrograms wired into CRM, ticketing and dashboards; 2014–16 customers billed 1.7–1.8x their first year by 2019.Switching costs
Versus SurveyMonkey: SurveyMonkey won individual survey writers with a free tool. Qualtrics trained future corporate buyers at university, followed them into companies, and grew one research engine into company-wide programs that are hard to replace.
Arena: Market Conditions Before Qualtrics
How each step happened
Step 1 of 5 · 2002–07
Sophisticated research, self-serve, for academics
Qualtrics began with a choice of customer. Scott Smith, a Brigham Young University professor of marketing research, wanted online survey software that could handle sophisticated research yet stay easy enough for his MBA students Q26 QTX-6. In 2002 he founded Qualtrics with his son Ryan and Stuart Orgill Q31 QTX-6. Companies were the obvious market, but they bought research from outside firms and did not want to do it themselves Q1. Academics did. Ryan Smith calls it a horrible business model: PhD power users with a budget of zero Q2.
The choice mattered because these users set the product's standard. Researchers asked for things polling tools lacked, such as randomly showing each respondent one of several versions of a product; years later Royal Caribbean wanted the same feature to test a new cruise ship Q1. Supporting behavioural economists such as Dan Ariely, Smith says, was "what prepared us for enterprise" Q2. The motto became "Easy enough for an intern, sophisticated enough for a Ph.D." Q4 That pairing let a non-specialist run work that had needed a specialist. By 2012 a Thomson Reuters division that had paid outside firms $300,000 a year for 30 surveys ran more surveys itself for $5,000 Q3.
Rivals SurveyMonkey launched in 1999 as a free tool for anyone who needed a survey, and Dave Goldberg, its CEO from 2009, credited its lead to a memorable brand, ease of use and low price SV22 SV5. UCLA researcher Corinne Bendersky called such tools fine for polling but crude for academic research Q26.
Step 2 of 5 · 2002–13
Seed universities; train every class
The distribution choice was made in the same years as the product choice and ran alongside it. The first customer was a professor at Northwestern's Kellogg School of Management, and Ryan Smith sold to other schools by finding decision makers' contact details online Q23 QTX-3. His brother Jared, then at Google, told him to talk about nothing but reaching 250 universities; it took two and a half years Q2.
Once a school had a license, every class of students learned research on Qualtrics. Smith counts almost a million students a year exposed to it and graduating out Q1. Usage spread the name, and the company did no press until its 2012 funding QTX-3. By 2012 it served 600 universities and more than 90 of the top 100 US business schools, and more than 99% of academic clients renewed Q4. By 2013 it counted 1,300 universities and 95 of the top 100 business schools Q26. The school accounts earned little. Their value lay in the students, who would soon sit in corporate research and marketing jobs.
Rivals SurveyMonkey spread one user at a time as each free survey reached new respondents, with schools among its users but no program to train them SV22 SV3. Its growth head Elena Verna later said Qualtrics had given its product to schools nearly free through license deals QTX-2.
Step 3 of 5 · 2008–12
Graduates pull it in; inside sales lands accounts
The seeding began to pay off four to five years after founding. A Kellogg student who used Qualtrics insisted that her future employer, Heineken, use it, and Heineken became a customer; a University of Washington graduate did the same at Expedia Q3 Q1. Smith says MBAs recommended it to employers as they took jobs Q26, and the 2018 prospectus counted more than 2 million academic users introduced to the platform as students Q9. A corporate buyer who already knew the product, and saw it in wide academic use, took less risk in choosing it. Bendersky said UCLA's own license was "a pretty easy sell" for the same reason Q26.
Timing turned that pull into a business. When the 2008 downturn cut corporate research budgets, the need to get decisions right rose, and money that had gone to outside firms moved to a tool teams could run themselves Q1 Q2. Qualtrics sold to these companies through an inside-sales team, sellers working by phone, and reached 350 employees and about $50 million in revenue before taking outside capital Q7. Accounts grew after the first sale: in 2012 renewals and upgrades alone were expected to lift revenue 20% Q3. By then Qualtrics claimed more than 4,000 enterprise customers QTX-4.
Rivals SurveyMonkey had paying users in 98% of the Fortune 500 by 2019, mostly individuals whose companies had not bought it centrally QTX-5. It launched its first enterprise plan in 2013 and in 2016 cut 100 jobs, mainly in business sales SV23 SV27.
Land and ExpandEducational SeedingBrandingSearch & evaluation costs
Step 4 of 5 · 2012–18
One research core, several experience products
Inside companies the research tool found repeat uses beyond one-off studies. By 2012 Qualtrics had added Qualtrics 360 for employee assessment and Site Intercept for website visitors to its core Research Suite QTX-4. Customer-experience programs became its largest use, with 160,000 Net Promoter Score programs running on it by 2019, and employee experience the second Q1. Rather than keep separate products, Qualtrics spent more than two years rebuilding the platform as services, so that one data layer, one set of dashboards and one set of integrations could serve every use Q27.
In March 2017 it named the result Experience Management (XM): one platform for customer, employee, product and brand experience Q10. By 2018 all four products ran on the shared Research Core Q9. Each new product reused the engine and the existing account relationship, so it cost less to build and sell than a specialist's standalone product. Kantar, which had resold the customer product, added the employee product in 2018 Q30. The expansion showed in accounts. Net retention measures what existing customers pay a year later, including upgrades; Smith put it at 140% for enterprise customers Q2. The 2018 prospectus gave 143% for customers in the 2017 Global 2000, against 122% overall, because they "often purchase our solutions for one use case or within one department, and then expand across their organization" Q9. At Walmart, Qualtrics powered over 57,000 dashboards for managers to track employee experience Q9. By the end of 2018, 27 customers paid $1 million or more a year QTX-1.
Rivals SurveyMonkey signed its first $1 million customer in late 2018, when its enterprise plan brought in about 12% of revenue QTX-5 Q11. It bought the customer-experience tools Usabilla and GetFeedback in 2019 and renamed itself Momentive, an experience management company, in 2021 SV13 SV12 SV10.
Step 5 of 5 · 2016–
Switching costs
Company-wide programs made Qualtrics hard to remove. By 2016 customers connected it to CRM systems such as Salesforce and ticketing systems such as Zendesk, and used those workflows to pay employee bonuses and credit customers; some built their own applications on top of it Q27. Leaving means rebuilding every survey, dashboard, alert rule and integration, and a customer's text-analysis topics do not move by default QTX-7. A rival analytics vendor advises customers to add its tool on top of Qualtrics rather than replace it QTX-7.
The effect shows in billing. Customers who joined in 2014, 2015 and 2016 were billed 1.7 to 1.8 times their first-year amount in 2019, and net retention stayed above 120% for eight straight quarters to September 2020 QTX-1. The barrier is highest where step 4 put Qualtrics, in programs spread across a company. Simple survey use moves more easily: La Salle University replaced Qualtrics with QuestionPro in 2026 to save money, rebuilding advanced survey logic by hand Q29.
Rivals QuestionPro offers a direct import from Qualtrics and won La Salle on cost Q29. SurveyMonkey never became the system behind such programs; after Zendesk shareholders voted down a merger in 2022, it was taken private for about $1.5 billion in 2023 SV14 SV16.
Key dates
- 2002Founded in a Provo basement to serve academic researchers QTX-6
- 2002First customer: a Kellogg School professor Q23
- 2008Corporate research budgets move from outside firms to Qualtrics Q1 Q2
- 2012-05First outside funding, $70M from Accel and Sequoia; 4,000 enterprise customers QTX-4
- 20131,300 universities and 95 of the top 100 US business schools Q26
- 2013-11SurveyMonkey launches its first enterprise plan SV23
- 2016-09Rebuilt platform connects to CRM and ticketing systems Q27
- 2016-12$190.6M revenue Full year Q9
- 2017-03XM platform launches with four experience products Q10
- 2017-12$289.9M revenue Full year, +52% year over year Q9
- 2018-11SAP agrees to buy Qualtrics for about $8B SV7
- 2018-12$401.9M revenue Full year; 27 customers paying $1M+ a year QTX-1
- 2019-01SAP completes the acquisition Q17
- 2019-12$591.2M revenue Full year, +47% year over year; net retention 125% QTX-1
- 2021-10Clarabridge adds analysis of conversations Q18
- 2023-05SurveyMonkey's parent taken private for about $1.5B SV16
- 2026-05Press Ganey Forsta bought for $6.75B Q21
- 2026-06La Salle University moves to QuestionPro Q29
Sources
Oldest first.
- SV3 Dave Goldberg To Become Chief Executive Officer And Minority Investor. Company press release
- Q4 Hey, world, are you ready for Utah’s Qualtrics?. Contemporaneous interviews
- SV5 SurveyMonkey CEO Dave Goldberg on Tech Valuations, Growth and an IPO. Contemporaneous CEO interview
- Q3 The Best-Kept Secret in Tech is in Utah. Contemporaneous interviews and reporting
- QTX-4 Qualtrics Raises $70M From Accel And Sequoia: 'The Biggest Software Company You Haven't Heard Of'?. Trade report with participant quotes
- QTX-6 'Trics of the Trade. Founder interview (reported)
- QTX-3 The Story Behind Qualtrics, The Next Great Enterprise Company. Founder interview (reported)
- Q26 Qualtrics Dominates Academic Survey Research. Contemporaneous customer and founder interviews
- SV23 SurveyMonkey Releases Its First Enterprise-Focused Product. Contemporaneous report quoting the CEO
- Q7 Qualtrics: Scaling an Inside-Sales Organization. Case abstract only; full case not accessed
- SV22 CS183C Session 10: Selina Tobaccowala, SurveyMonkey. Class notes of an executive's talk
- SV27 SurveyMonkey Cuts 100 Jobs To Refocus Its Service for Businesses. Contemporaneous report quoting the CEO
- Q27 Why I’m (still) at Qualtrics. Firsthand engineering account
- Q23 From $0 to $2.5 billion with Qualtrics CEO, Ryan Smith. Founder interview
- Q10 Qualtrics’ Groundbreaking Experience Management Launch. Contemporaneous product announcement
- Q11 Form S-1/A. Competitor registration filing
- Q30 Qualtrics and Kantar Extend Their Customer Experience Partnership to Include Employee Experience Offering. Partnership expansion announcement
- Q9 Form S-1. Registration filing
- SV7 SAP-Qualtrics deal 'validated just how big this category is': CEO of SurveyMonkey parent. Contemporaneous report quoting the CEO
- Q1 The $8 billion dollar software you’ve never heard of. Founder interview, retrospective
- Q2 The Things Nobody Tells You About An $8B Acquisition. Founder interview, retrospective
- Q17 SAP Completes Acquisition of Qualtrics. Transaction completion and stated rationale
- QTX-5 SurveyMonkey CEO: Our Enterprise Business is in Hyper-Growth Mode. CEO interview (reported)
- SV13 SurveyMonkey To Acquire Usabilla To Expand Enterprise Suite Of Customer Feedback Solutions. Company press release
- Q12 Form S-1/A. Competitor registration filing
- SV12 SurveyMonkey to Acquire Customer Experience Management Company GetFeedback. Company press release (also filed as SEC exhibit 99.1)
- QTX-1 Form S-1 (Qualtrics International Inc.), including the 'Our Story' founders' letter. Filing
- SV10 SurveyMonkey Parent Company SVMK Inc. Relaunches as Momentive. Company press release
- Q31 Ryan Smith: Qualtrics. Founder podcast interview
- Q18 Qualtrics Completes Acquisition of Clarabridge. Transaction completion
- QTX-2 Notorious PLG 2.8.22: Product-Led Growth's Failure (reproduces Elena Verna's LinkedIn comment). Participant comment (newsletter reproduction)
- SV14 Zendesk Announces Termination of Merger Agreement with Momentive. Counterparty press release
- SV16 Consortium led by Symphony Technology Group Completes Acquisition of Momentive Global. Transaction completion release filed with the SEC
- Q21 Qualtrics Acquires Healthcare Experience Leader Press Ganey Forsta. Transaction completion and stated rationale
- Q22 Qualtrics Buys Press Ganey Forsta For $6.75 Billion … So Now What?. Original analyst interpretation
- QTX-7 How to Migrate Off Medallia or Qualtrics Without Losing Your Feedback History. Rival vendor guide
- Q29 QuestionPro Replacing Qualtrics. Customer procurement and migration notice