9 ms·

SurveyMonkey S-1

131 points by coloneltcb 8y ago

drc500free 8y ago
This is a pretty informative example of how hard it is to apply GAAP accounting to tech-based growth companies. If you look at F-7 Cash Flows, you can see the struggles. In "Cash Flows from Operating Activities," you start with the book profit and work your way through all the excuses that get you to cash flows. Positive numbers are cash that you have but really shouldn't count, and negative numbers are cash that you don't have but should. The interesting ones being Deferred Revenue (subscriptions that have been paid but not fulfilled on) and Depreciation/Amortization (Assets that are wearing out, including intangibles like software). GAAP tries to match expenses to revenues across time, so you know how much your widgets cost. It struggles with matching across years, and it REALLY struggles with indirect expenses like software development. There is no direct expense to tie to the deferred revenue, because a lot of the cost of getting a customer is not earmarked 1:1 to that customer (hence a massive gross profit but an overall loss). And because this is a tech development business, the costs are actually over in the Investing section. Instead of a direct expense, the developers have some of their time put into direct expense, some of their time into overhead expense, and some of their time capitalized for creating an intangible asset. The intangible asset is then amortized over time, under the assumption that it gets "worn out" to service the business. So we get a weird statement like this. The gross profit is massive, but the business runs at a loss. There is plenty of cash, but it's actually not supposed to be there - it needs to be set aside to account for stock options, and for the work of servicing their subscriptions. But they can't quantify the cost to service a subscription, because it is covered by the depletion of technology written years ago, as though it's a finite resource that wears out like a truck at a fixed rate. So the cash doesn't tell you anything that useful, but neither do the GAAP statements. This could be a great business or a terrible one, just looking at the financial statements - and if you can't judge the health by looking at the statements, what's the point?
daxorid 8y ago
edit: Disregard, can't ask an honest question on HN. Understood.
- saas_sam 8y ago
  They host a lot of forms. Forms that do fancy things. And engineers cost a lot of money in the Bay Area. Hope that helps.
- timcederman 8y ago
  http://danluu.com/sounds-easy/ http://danluu.com/sounds-easy/ edit: there's a lot of stuff they offer beyond the basic surveys - https://www.surveymonkey.com/what-is-surveymonkey/ https://www.surveymonkey.com/what-is-surveymonkey/.
- perryh2 8y ago
  Does it also surprise you that DocuSign is a company worth over $10B?
  - whorleater 8y ago
    I was originally going to say "man that's wild", then I realized all the documents I've signed electronically lately have been through DocuSign and maybe 10B is actually undervalued.
    - sciurus 8y ago
      I was surprised to begin purchasing a house recently and have the documents go through dotloop instead of docusign. It was my first evidence that docusign isn't completely dominant after all.
    - paulie_a 8y ago
      I haven't been forced to use DocuSign for a few years, but there ux was complete shit. I would rather go to an office and physically sign something than deal with their crappy interface.
      - nojvek 8y ago
        Docusign would also go down all the time. My agent and I both absolutely hated it. Much easier for me to wireless print stuff, sign it, scan it and email it from an HP printer. It was a reliable system. I was willing to go through that friction because docusign was just absolutely horrible. UX was aweful, wouldn’t work on mobile well, emails wouldn’t send, site would be down yada yada. But this says something about enterprise companies. With a powerful salesforce, you could dominate a field even with a shitty product if it’s a niche field.
misterbowfinger 8y ago
It's weird that they go on and on about how traditional Enterprise approaches suck, but they then offer SurveyMonkey Enterprise as a market opportunity. How are they different?
abakker 8y ago
Longtime SurveyMonkey customer here, but, I have largely switched to SurveyGizmo and Qualtrics. 2 primary reasons: 1. I work with Panel Providers, and their Quota tools and panel integration tools are just a bit clumsier. They don't really have Data Quality checks, they don't have cross-logic quotas, they don't have a kind of survey flow tools. 2. Analysis stack: They are currently chasing analysis in a rather frustrating way. (e.g. Online). SurveyGizmo and Qualtrics both have stronger features to export to SPSS files, which is the survey industry standard. SPSS files are read by many tools that specialize in survey analysis - R, Q, Wincross, etc. As an actual enterprise survey user, I will never use the web reporting tools for anything more that casual sample monitoring. I can't build my final products on those, pretty much no matter what they do. I'd rather they invested in better downstream exports. Things I wish that they, or anyone in the industry would do: 1. Export to some kind of database, where data attributes could be stored. I don't know whether this is just a bundle of CSV + Pandas code to get the survey into a data frame, or a sqlite file where the data connections are preserved (e.g. logical groupings of multiple choice, multi select questions). SPSS files are a _good start_ they get almost everything right, but, they are proprietary-ish, and they leave a lot to be desired in workability. 2. Would be nice to see more up front indications of the types of analysis that various survey questions can provide. i.e. indicate to users/survey authors what kinds of actual relevance the answers to their questions have. I like survey monkey a lot, and, if you need something lightweight, low touch, and long-running, they are great. but, if you need to do market research there are more full-featured tools to use that will make the whole process easier.
- deytempo 8y ago
  Another lesser known survey analytics tool that just came out recently is Surveyking.com. They have a lot of really advanced features that some of the smaller companies don’t have and it was all coded by one guy apparently. From the pricing, it looks like they are only $19 a month for everything. https://www.surveyking.com/pricing https://www.surveyking.com/pricing
- projectramo 8y ago
  I like that survey monkey finds an audience and induces them to answer your questions. I also know roughly how much it will cost. I can't tell pricing from SurveyGizmo or Qualtrics after several seconds of clicking around. This is their pricing tab: https://www.surveygizmo.com/team-enterprise/ https://www.surveygizmo.com/team-enterprise/ come on!
calcsam 8y ago
These financials don't look great. They earned $219M last year and $205M the year before. That's a top-line revenue growth rate of around 6% -- more common for an old-line company like IBM. SaaS startups are supposed to have revenue growth >30% when they hit IPO, and the best ones have even higher -- Twilio had ~70%.
- Cthulhu_ 8y ago
  Supposed to? I dunno, 6% is respectable and if I were an investor, it sounds like a safe bet. Unlike 30-70%, that just tells me they've been dedicating resources on growth, probably using backhanded techniques, instead of their product and profitability. Plus as another commenter pointed out, it's not a startup, it's nearly two decades old now. What were their growth rates 20 years ago?
  - jgalt212 8y ago
    True, but after 20 years, shouldn't they have figured out a way to take in more money than they spend?
- InterestBazinga 8y ago
  Interesting. I thought start ups are commonly not in profit
  - Sovietaced 8y ago
    Revenue does not imply profits.
  - davidstoker 8y ago
    Revenue !== profit. One would expect revenue to be growing at a steady clip with profit coming later when costs are decreased
  - barbegal 8y ago
    The OP is using "earned" in the colloquial sense to refer to revenue. Earning before interest and tax (EBIT) were a loss of $35 million in 2016 and a loss of $21 million in 2017
mbloom1915 8y ago
take a look at their VC history, could one assume the BAC, JPs, TRowes needed this exit soon? https://www.crunchbase.com/organization/surveymonkey https://www.crunchbase.com/organization/surveymonkey
- adventured 8y ago
  It's a pretty great time to exit if you're ever going to. The stock market is going gangbusters, most valuations are on the ceiling. If they can't fetch top dollar for their business in this environment, they never will. It would suck to wait 18 months because you tried to time it higher, have the market sink into a bear, and then be stuck with either staying private for many years waiting for the next wave, or pushing an IPO in a very poor environment.
liveoneggs 8y ago
just use foresee :)
- paulie_a 8y ago
  I literally hope that company goes out of business as soon as possible. If I have a few moments my feedback on sites that use it is literally "get rid of this annoying foresee bullshit"
Agnosco 8y ago
Now I work for a consultancy specializing in customer loyalty and the connection between customer experiences and profitability, so our needs are of course not representative of all users. We ended up passing on both SurveyMonkey and Qualtrics when we decided to move from our home-built solution and ended up going for Confirmit. SurveyMonkey is a good survey tool, but although they have some extra additions once you have set up the survey and collected data (visualization and insights sharing), the product just doesn't do enough. If you only want the solid and robust surveying tool, you are almost better off going for Google Forms - simple surveying tools abound. If what you are doing is market research only, then SurveyMonkey doesn't really cut it - there are much stronger tools out there to handle panels, quotas and all the logic that you need to not get bogged down by manual processes. Most of these Survey tool producers are pivoting into Customer Experience management and are starting to provide tools for handling much deeper parts of organizational processes related to these challenges. This means not only automating customer feedback processes for when it is most relevant for the customer to provide such, but also allowing for collection of data through other means than just surveys, action management systems for automatically creating and managing cases for customers having experienced e.g. unsatisfactory events, allowing for CRM integrations via API, etc. In the market for handling customer experiences (as well as those for employees), I think SurveyMonkey is in a squeeze.

131 points by coloneltcb 8y ago

This is a pretty informative example of how hard it is to apply GAAP accounting to tech-based growth companies. If you look at F-7 Cash Flows, you can see the struggles. In "Cash Flows from Operating Activities," you start with the book profit and work your way through all the excuses that get you to cash flows. Positive numbers are cash that you have but really shouldn't count, and negative numbers are cash that you don't have but should. The interesting ones being Deferred Revenue (subscriptions that have been paid but not fulfilled on) and Depreciation/Amortization (Assets that are wearing out, including intangibles like software). GAAP tries to match expenses to revenues across time, so you know how much your widgets cost. It struggles with matching across years, and it REALLY struggles with indirect expenses like software development. There is no direct expense to tie to the deferred revenue, because a lot of the cost of getting a customer is not earmarked 1:1 to that customer (hence a massive gross profit but an overall loss). And because this is a tech development business, the costs are actually over in the Investing section. Instead of a direct expense, the developers have some of their time put into direct expense, some of their time into overhead expense, and some of their time capitalized for creating an intangible asset. The intangible asset is then amortized over time, under the assumption that it gets "worn out" to service the business. So we get a weird statement like this. The gross profit is massive, but the business runs at a loss. There is plenty of cash, but it's actually not supposed to be there - it needs to be set aside to account for stock options, and for the work of servicing their subscriptions. But they can't quantify the cost to service a subscription, because it is covered by the depletion of technology written years ago, as though it's a finite resource that wears out like a truck at a fixed rate. So the cash doesn't tell you anything that useful, but neither do the GAAP statements. This could be a great business or a terrible one, just looking at the financial statements - and if you can't judge the health by looking at the statements, what's the point?

daxorid 8y ago

edit: Disregard, can't ask an honest question on HN. Understood.

saas_sam 8y ago
They host a lot of forms. Forms that do fancy things. And engineers cost a lot of money in the Bay Area. Hope that helps.
timcederman 8y ago
http://danluu.com/sounds-easy/ http://danluu.com/sounds-easy/ edit: there's a lot of stuff they offer beyond the basic surveys - https://www.surveymonkey.com/what-is-surveymonkey/ https://www.surveymonkey.com/what-is-surveymonkey/.
perryh2 8y ago
Does it also surprise you that DocuSign is a company worth over $10B?
- whorleater 8y ago
  I was originally going to say "man that's wild", then I realized all the documents I've signed electronically lately have been through DocuSign and maybe 10B is actually undervalued.
  - sciurus 8y ago
    I was surprised to begin purchasing a house recently and have the documents go through dotloop instead of docusign. It was my first evidence that docusign isn't completely dominant after all.
  - paulie_a 8y ago
    I haven't been forced to use DocuSign for a few years, but there ux was complete shit. I would rather go to an office and physically sign something than deal with their crappy interface.
    - nojvek 8y ago
      Docusign would also go down all the time. My agent and I both absolutely hated it. Much easier for me to wireless print stuff, sign it, scan it and email it from an HP printer. It was a reliable system. I was willing to go through that friction because docusign was just absolutely horrible. UX was aweful, wouldn’t work on mobile well, emails wouldn’t send, site would be down yada yada. But this says something about enterprise companies. With a powerful salesforce, you could dominate a field even with a shitty product if it’s a niche field.

misterbowfinger 8y ago

It's weird that they go on and on about how traditional Enterprise approaches suck, but they then offer SurveyMonkey Enterprise as a market opportunity. How are they different?

abakker 8y ago

Longtime SurveyMonkey customer here, but, I have largely switched to SurveyGizmo and Qualtrics. 2 primary reasons: 1. I work with Panel Providers, and their Quota tools and panel integration tools are just a bit clumsier. They don't really have Data Quality checks, they don't have cross-logic quotas, they don't have a kind of survey flow tools. 2. Analysis stack: They are currently chasing analysis in a rather frustrating way. (e.g. Online). SurveyGizmo and Qualtrics both have stronger features to export to SPSS files, which is the survey industry standard. SPSS files are read by many tools that specialize in survey analysis - R, Q, Wincross, etc. As an actual enterprise survey user, I will never use the web reporting tools for anything more that casual sample monitoring. I can't build my final products on those, pretty much no matter what they do. I'd rather they invested in better downstream exports. Things I wish that they, or anyone in the industry would do: 1. Export to some kind of database, where data attributes could be stored. I don't know whether this is just a bundle of CSV + Pandas code to get the survey into a data frame, or a sqlite file where the data connections are preserved (e.g. logical groupings of multiple choice, multi select questions). SPSS files are a _good start_ they get almost everything right, but, they are proprietary-ish, and they leave a lot to be desired in workability. 2. Would be nice to see more up front indications of the types of analysis that various survey questions can provide. i.e. indicate to users/survey authors what kinds of actual relevance the answers to their questions have. I like survey monkey a lot, and, if you need something lightweight, low touch, and long-running, they are great. but, if you need to do market research there are more full-featured tools to use that will make the whole process easier.

deytempo 8y ago
Another lesser known survey analytics tool that just came out recently is Surveyking.com. They have a lot of really advanced features that some of the smaller companies don’t have and it was all coded by one guy apparently. From the pricing, it looks like they are only $19 a month for everything. https://www.surveyking.com/pricing https://www.surveyking.com/pricing
projectramo 8y ago
I like that survey monkey finds an audience and induces them to answer your questions. I also know roughly how much it will cost. I can't tell pricing from SurveyGizmo or Qualtrics after several seconds of clicking around. This is their pricing tab: https://www.surveygizmo.com/team-enterprise/ https://www.surveygizmo.com/team-enterprise/ come on!

calcsam 8y ago

These financials don't look great. They earned $219M last year and $205M the year before. That's a top-line revenue growth rate of around 6% -- more common for an old-line company like IBM. SaaS startups are supposed to have revenue growth >30% when they hit IPO, and the best ones have even higher -- Twilio had ~70%.

Cthulhu_ 8y ago
Supposed to? I dunno, 6% is respectable and if I were an investor, it sounds like a safe bet. Unlike 30-70%, that just tells me they've been dedicating resources on growth, probably using backhanded techniques, instead of their product and profitability. Plus as another commenter pointed out, it's not a startup, it's nearly two decades old now. What were their growth rates 20 years ago?
- jgalt212 8y ago
  True, but after 20 years, shouldn't they have figured out a way to take in more money than they spend?
InterestBazinga 8y ago
Interesting. I thought start ups are commonly not in profit
- Sovietaced 8y ago
  Revenue does not imply profits.
- davidstoker 8y ago
  Revenue !== profit. One would expect revenue to be growing at a steady clip with profit coming later when costs are decreased
- barbegal 8y ago
  The OP is using "earned" in the colloquial sense to refer to revenue. Earning before interest and tax (EBIT) were a loss of $35 million in 2016 and a loss of $21 million in 2017

mbloom1915 8y ago

take a look at their VC history, could one assume the BAC, JPs, TRowes needed this exit soon? https://www.crunchbase.com/organization/surveymonkey https://www.crunchbase.com/organization/surveymonkey

adventured 8y ago
It's a pretty great time to exit if you're ever going to. The stock market is going gangbusters, most valuations are on the ceiling. If they can't fetch top dollar for their business in this environment, they never will. It would suck to wait 18 months because you tried to time it higher, have the market sink into a bear, and then be stuck with either staying private for many years waiting for the next wave, or pushing an IPO in a very poor environment.

liveoneggs 8y ago

just use foresee :)

paulie_a 8y ago
I literally hope that company goes out of business as soon as possible. If I have a few moments my feedback on sites that use it is literally "get rid of this annoying foresee bullshit"

Agnosco 8y ago

Now I work for a consultancy specializing in customer loyalty and the connection between customer experiences and profitability, so our needs are of course not representative of all users. We ended up passing on both SurveyMonkey and Qualtrics when we decided to move from our home-built solution and ended up going for Confirmit. SurveyMonkey is a good survey tool, but although they have some extra additions once you have set up the survey and collected data (visualization and insights sharing), the product just doesn't do enough. If you only want the solid and robust surveying tool, you are almost better off going for Google Forms - simple surveying tools abound. If what you are doing is market research only, then SurveyMonkey doesn't really cut it - there are much stronger tools out there to handle panels, quotas and all the logic that you need to not get bogged down by manual processes. Most of these Survey tool producers are pivoting into Customer Experience management and are starting to provide tools for handling much deeper parts of organizational processes related to these challenges. This means not only automating customer feedback processes for when it is most relevant for the customer to provide such, but also allowing for collection of data through other means than just surveys, action management systems for automatically creating and managing cases for customers having experienced e.g. unsatisfactory events, allowing for CRM integrations via API, etc. In the market for handling customer experiences (as well as those for employees), I think SurveyMonkey is in a squeeze.