Portland-born Survey Monkey, a site that lets users create surveys for customers, is a ten year old startup that mostly flew below the radar until last year. Ryan Finley started the company ten years ago in Madison, Wisconsin when he was a year out of college. Five years later he had moved it to Portland and hired his brother Chris to help him.
They never raised outside funding and grew the business to a rumored $30 million in revenue in 2008, with 85% EBITDA margins. This year revenue will be more like $45 million, we’ve heard (the company won’t comment).
That’s when the big money rolled in. Spectrum Equity Investors and Bain Capital Ventures injected capital into the company earlier this year, the founders took most of it off the table, and ex-Yahoo exec Dave Goldberg was brought in as CEO.
Today Survey Monkey has offices in Menlo Park (the former CBS Interactive offices) and 20 million monthly unique visitors, says the company. They have 32 employees, up from 14 a year ago, and the product continues to grow like a weed.
Goldberg has also brought in a new executive team to help him handle the growth, and says that the company will soon open an office in Europe for customer support.
New execs include VP Engineering Selina Tobaccowala, who was previously an exec at Ticketmaster’s Europe division, and was the cofounder of Evite. New VP Finance Noreen Bergin spent five years as SVP of Finance and Corporate Controller for Netscape in the 90s, and VP Business Development Tim Maly just ended a six year run at Google. Most recently, Maly led the Inside Sales and Sales Strategy & Operations teams for AdWords North America.
This is obviously a company on a roll, no matter how ugly you say their homepage is. Small businesses love this stuff, and are willing to pay for it.
I have used it for personal needs as well…
I personally used http://fluidsurveys.com/ . The look and feel is better, and when you need advanced features, like side-by-side matrices, it delivers.
FluidSurveys Just launched a One Time Fee Survey Plan: http://fluidsur...-pay-as-you-go/
SurveyMonkey and all the others charge a monthly subscription – why pay that, when you can pay a one time fee only? Of course, FluidSurveys also has a free plan too…
Just wondering that with revenues of $45M and profits of almost $35M (~80%) why would they need external venture ? Why to share the revenues ? Even if they have growth plans they can fund it all with their own cash.
they didn’t. it was basically a sale.
So their revenue ($30mm) with their pricing structure would indicate somewhere around 150,000 paid customers per year? Their traffic stats definitely support that, but it’s hard to believe.
Perhaps they see global market opportunities and competitors coming faster than they previously expected. Even $20M a year doesn’t get one far when markets are growing fast, such as India and China.
Yeah the key to the article is that “the founders took most of it off the table”. Pretty smart lock in gains, get VCs that may really grow it and I’m sure they still have some significant equity locked up.
I really think SurveyMonkey needs to work on their user experience. They need to revamp their application with more AJAX and a frendlier user interface, otherwise everyone will start using tools like AskItonline.com and Wufoo.com.
I myself have a spare time project where you can create your own surveys at http://obsurvey.com, where I’ve tried to utilize the latest AJAX technologies. It’s not advanced but it get’s the job done. And I’m pretty proud of the functionality for embedding multipaged surveys in a blog or website 100% AJAX. SurveyMonkey needs to up their game.
Trust me, there are a lot of companies who ’strive’ to keep the websites look like web 1.0…
Such an interface helps basic internet users to navigate and also gives the impression that the company is not a very big player; so they are not ripping you off..
Oh you mean with applications like google maps?
If what you are saying is true, I doubt it’s a recipie for long term success, when we are talking web applications.
But of corse a AJAX interface should be easier to use even for the non-tech-savy to be justified.
Any companies you would like to share the name of?
SurveyMonkey is successful because it does *not* have an Ajaxy interface. Ajax is a trap: it doesn’t always work for end-users, is a nightmare to maintain and is generally unnecessary.
Do we have a SurveyMonkey employee on the line?
Oh I see, then it makes sense. Any idea of the deal size ? With a growth rate of almost 100% and an incredible profit maybe a 15X valuation is an easy probability. So maybe a deal size around $500M. Wow isn’t that huge for a Survey Tool ??
I am still not convinced with the numbers ($45M etc)
i heard it was in the $200m+ range but haven’t been able to confirm.
As you mentioned since this was done at the beginning of this year when they were around $25M and maybe with recession etc the valuation was done at around 10X which makes it approx $250M.
Even those numbers are damn impressive, I must say for a survey tool.
and this is for a company without an API in place
A company needs an API in place to be successful?
The total valuation was $220M and they took $160M off the table for 65% of the company.
Thanks for sharing this Matt. Very useful.
It’s an amazing success story. I hope they someday share some of the insights and lessons learned that made them successful. Would help other entrepreneurs.
Well its really gr8, sometime if you dont go for external fund you can grow better. I am always against seed capital as once you get seed capital you are again an employee working for VC. Seed money is gr8 when you are not new to bussiness and had proved your worth.
Who says their homepage is ugly ?
I did. That’s lime green, by the way.
Thank You. On the same boat
I too used there service and it was just amazing, best part is there ease of use.
I hate surveys with a passion… si.com would always have a take a survey popup and now ESPN does. I understand the need for them I guess although I would argue that everything you need to know about your clients can be found in the type of questions they ask and uservoice is a far better option than surveys… but apparently you can make money being annoying…
Sounds to me like you hate popups more than surveys (I do too).
There are many other uses besides marketing and customer service. Think academic research, particularly in the social sciences.
A great product, I’ve been involved with several small companies that use Survey Monkey to conduct internal polls on everything from where to go for the next company trip and what sort of snacks they want in the company kitchen. Seems like they’ve slowly built a solid business and product over the past decade.
Hey Michael, after ten years, wouldn’t they be more of a “continueon” than a “startup”? When they get bought out, we could call them a “finishedup” or “soldout.”
Any reason why google app forms won’t completely kill the revenue model?
Cannibalise some potential fringe customers maybe (the people who want everything for free – who aren’t great customers to begin with for this kind of service) but not kill the revenue model.
There’s room in the market for free and paid solutions, each with separate value propositions and different audience segments.
Google still needs to prove themselves in this area…if Surveymonkey doesn’t evolve as previous posts suggested, they will be left out in the cold. What an advantage they had/have being a 1st mover.
Nope. The are lots of advanced needs that Google doesn’t even begin to address. Think Google Sites vs. WordPress.
for any product to be successful there should be ease in use.I just created one survey using survey money it very easy.i think that why they r succesful
Have you tried http://AskItOnline.com or http://wufoo.com, so much easier and better looking.
AskItOnline and wufoo.com are much more expensive, and a much worse value. SurveyMonkey is $200 a year, unlimited, period.
Support is great, and it looks decent. what else do you need?
If you want price go to google forms on google apps, it’s free. If you want a better application go to http://AskItOnline.com if you want an API got to wufoo.com. Why use SurveyMonkey at all?
Because it’s better than all the ones you mention.
I would like to see access to an API. We have the need to bring our survey data into our own databases for analysis. Currently, only manually downloading exists. Even if we could schedule a data extract that dropped the file on a secure FTP site would be great. The tool is easy to use.
Shameless self-promotion: http://www.surv...n-cms-intranet/
totally agree with you on this.
i hate standalone web apps
True about Google Forms and how it integrates with other Google Apps, but not well marketed.
@ED ahh normal ppl who are making surveys had no technical skills – and even o idea how ti use Google APPS or google Forms – they ust wanr survey – have a lnk and send this link via Email -done.. finito
what is the barrier to entry for this business? nothing that i can yet see.
Barriers to entry are moot if you already have 100,000+ customers! We are creatures of habit — I have used SurveyMonkey off and on for years. When I need to do a survey, I go to them immediately…I don’t think about it, it isn’t worth researching other solutions (even if they ARE better).
They follow KISS principle. You do not need fancy home pages to bring in users. Should convey the message and they do it pretty well.
This is a great story of a company that wasn’t an overnight success, but refined and built their business over 10 years. Congratulations to the team.
I think the valuation was bang on based on the facts MA has presented. My read says they are priming for an IPO. New Exec team and VC’s paying top dollar points solely to this IMHO.
and what about this one, http://www.surveypirate.com, definitely better-looking and like Google forms, free.
wow..all the survey spammers on TC today..
Guilty.
Would you prefer flame wars about Brazil?
lol
These stories are inspiring for entrepreneurs.
When it’s so sexy to raise a boatload of capital and flip a company soon after, there are a lot of success stories quietly flying below the radar.
Kudos Mike for telling the story behind one of them…
Survey Gizmo is nice too http://www.surveygizmo.com/
This is a great example of how a business can build over time and be successful. Don’t need millions of dollars for 90% of the great ideas to flourish.
LeanStartupGoogle group has been raving about Survey.io over the last few months.
Customer Discovery is essential to any startup that wants to stay relevant, and survey tech isn’t going anywhere.
Well I am glad to see one more confirmation that polls, surveys and online democracy at large are fashionnable and profitable.
Maybe because I am developping an advanced polling website
However, I am surprised to see that few comments. Online polls are going to be a huge revolution one of these days.
What you see today is nothing. Think “Massive Real-time polls”.
And Mike I told you so with details in a Techstars application in 2008.
Btw, If anyone is interested we are still looking for associates.
There are 20+ survey platforms out there to use, pick one and enjoy.
GoogleForms is pretty handy, I like that one myself because of my established google docs workflow.
Wufoo is good for the small biz and its hip’n'cool. SurveyMonkey has been around forever hence the following they have.
All the monkey really needs to do next is to add MarketTools like web panel people and then they’re in that space as well- probably out of focus for them but there’s not too much growth in just adding different question types, analysis and funky gimmick tricks.
SurveyMonkey seems to be generally top of mind when I’m talking to clients, in my mind there a better tools out there. They do seem to own the ‘free survey’ space.
I would suggest looking into Qualtrics…there is nothing like it in the world. (www.Qualtrics.com) It’s the Apple of survey tools. Plus, you can do about 1,000x more with it.
SurveyMonkey is fantastic but the name is terrible and really holds it back. I have no doubt that the same execution but with a different name would easily have outperformed where they are now. The fact is, many potential users cannot get over the name, sad as it may sound.
That’s a very timely comment. We are in the process of doing some brand research for SurveyMonkey and would value anyone’s feedback. The survey takes less than 5 minutes, and it’s your opportunity to tell us exactly what you think of the name, logo and more. Here’s the link to the survey: http://www.surv...om/brandsurvey3
You guys should try http://www.vista-survey.com REALLY easy to use, and the reporting at the end was very professional and was very impressive looking. I used it for a client with a line of salons that was trying to grow their business, and they LOVED the end result. It isn’t the cheapest tool, but it was the best out of the 7 that I tried.
http://www.zurvay.com is a new survey site that is powerful and really easy to use. We’ve been using it for a while now.
We always use a company / website called survey1online.com to do our online surveys. It isn’t a do it yourself application. They help with wording, question selection, and layout. We can also get specialized reports. There are so many suggestions they have had in the past with modification to our surveys, I would be hesitant to try one ourselves. Their services are not free but seem very fair. By the way, they are NOT paying me to say this!
I ll use google Spreadsheets for survey ’s it is more reliable as it is form GOOGLE…