Breaking Through Growth Plateaus with Vivek Bhaskaran, CEO of QuestionPro

Dan Balcauski speaks with Vivek Bhaskaran, founder and CEO of QuestionPro. Vivek shares how he bootstrapped QuestionPro from zero to $32 million in ARR, serving over 20 million users without raising external capital. They discuss Vivek's entrepreneurial journey, from selling cigarettes in Russia to building a successful portfolio of companies. Vivek emphasizes the significance of hustle, transparency, and unorthodox growth tactics like M&A in scaling a SaaS business.

03:34 Journey from Cigarettes to Software
05:42 The Birth and Growth of QuestionPro
06:32 Challenges and Growth Plateaus
20:24 The Decision to Bootstrap
21:46 The Importance of Sleep and Health
22:53 Strategies for Successful M&A
28:50 Structuring Deals for Bootstrapped Companies
31:47 Lessons from Creating a Separate Brand

Guest Links
https://www.linkedin.com/in/vivekbhaskaran/
https://www.questionpro.com/

Transcript

Dan Balcauski: 0:20

Welcome to SaaS Scaling Secrets the podcast that brings you the inside stories from the leaders of the best scale up. B2B SaaS companies. I'm your host, Dan Balcauski, founder of Product Tranquility. Today I'm excited to speak with Vivek Bhaskaran. Vivek is the founder and CEO of QuestionPro, which he's bootstrapped from zero to 32 million in a RR while serving over 20 million users. He built an impressive portfolio of successful companies, including Idea Scale, Trita Q Card, and Spatial Chat. Particularly remarkable is that he's achieved this growth without raising external capital. He's also created meaningful opportunities for over a thousand employees across his 20 year journey. Let's dive in. Welcome Vivek to SaaS Scaling Secrets.

Vivek Bhaskaran: 0:53

Hi, Dan. How you doing? Glad to be here.

Dan Balcauski: 0:55

I am very excited for our conversation today. Thank you so much for taking the time and I think our audience will get a lot outta this conversation. Before we dive into QuestionPro and your journey in that, I wanna know a little bit more about you and I think, we all have these moments in our life that are kind of transformational, the change our perspective, our worldview. I like to think of him as a superhero transformation moment. You're Peter Parker, normal high school student. You get bit by a radioactive spider. You wake up the next day, you're Spider-Man. What moment has that been for you in your journey?

Vivek Bhaskaran: 1:29

Ah, good question. I think I think when I was in my f very first business that I started was in I was a student in Russia actually, after high school. After high school I left India. Originally from India. I was in Russia, and then I started my own business, I think, and we used to buy like cigarettes in bulk and sell cigarettes in the dorm rooms. On packs really. So that's kind of, that was my very first, and that's when I got into the notion of actually doing business of, it was just a pretty simple retail business. I guess you buy it in bulk and sell it. And, and cigarettes is, I guess cigarettes or cigarettes. And it was back in 95, 96, I think. Yeah. 96. So that was kinda my aha moment about business in general, I would argue. So it's like, oh, because I grew up in a family where my dad worked for the same company. He worked for the coal mining company throughout his entire career slash life. My mom worked for, another oil and gas company throughout her life. And a pretty career kind of employees, I guess. And that's when I realized like, ah, shit, I'm not gonna be an employee. I guess I'm gonna, I'm gonna be an entrepreneur. So, so that was at least the beginnings of can, I thought that, oh, there's another way to do this. So that's, in a nutshell that was one, one of the, one

Dan Balcauski: 2:36

That is,

Vivek Bhaskaran: 2:37

moments.

Dan Balcauski: 2:37

yeah, that is for sure. I think the most unique answer I've ever heard to that question. What what led you to go from India to Russia? I.

Vivek Bhaskaran: 2:46

Yeah, so I did not after I, I really wanted to do computer science slash computer engineering. I was kind of like my dad had bought home a computer, so I was, fooling around with it. In high school. I really wanted to do that, but I couldn't get into any of the IIT, so I, back in India back then when you had to, I guess, be in the top. I guess 0.1% of the population to actually get into, get computer science as a course. Clearly I was not so I couldn't get in. So if I couldn't get in and then I said, fuck it. Let me try do something else. And Russia was open up and they wanted inter transfer students and so I kinda applied for it and I. Got admission in some random college in Russia and said, I'm gonna go to Russia now. I think I was 18. In hindsight I was like, oh, it's gonna ballsy move. But anyway, at the time I was like, I just wanna get out. I just wanna do it. I wasn't thinking, oh, you're 18. You don't think too hard. You just do things. So it's good that way.

Dan Balcauski: 3:34

Oh my God. So how does you go from selling cigarettes into the, what has been your journey into the software world, I guess from from the time selling cigarettes in your dorm room?

Vivek Bhaskaran: 3:44

Yeah. Yeah. So I mean, I mean, the natural progression of cigarettes would've been made cigarettes, drugs and cocaine, I guess. But I didn't, clearly I didn't do that. So, so no. Anyway, so yeah, now that was just a, that was just a means to an end. So I kinda came to the States. I came to actually, believe it or not I went to BYUI came to the state transfer to BYU, which is a, it's a modern school in

Dan Balcauski: 4:03

Fantastic program. Yeah.

Vivek Bhaskaran: 4:04

Yeah. So, and BYU has been a great, kind of, it's, from my perspective, it was, it was really good. It was like, fooling around, screwing around, doing all kinds of dumb shit in Moscow to coming to Provo, Utah. I was like, get your head together and work and study. That's all I did for like, three years. And that's where I got into, obviously computer science, computer programming. I did a lot of, side, side hustles jobs. E-commerce was booming at the time, and, dot com was booming. Basically everybody wanted to move everything online really. This was back in 2000, early two thousands, and I think I built the very first, kind of like mortgage application. I also worked for a company called E Utah, which is the e, the government portal for. The state of Utah, that was the first, like you could buy a hunting and fishing license on, I mean, today it seems kind of obvious but you know, back in 2000 you had to go to, I think you had to go to Walmart or something to buy a hunting and fishing license. Literally you had to go to a store. There's no way you could buy a hunting and fishing license. And we moved that thing entire thing online. So that's kind of how I got into computers and tech and everything else. And then in 2000. Five is when I decided, and then I was doing consulting work. And then 2 0 5 I decided like enough of consulting. Consulting is great if you think about it, like you'd make actually, you make a lot of money. Honestly, in consulting, you do make a lot of money. When the going is good. But then it's ups and downs. And more importantly for me as a consultant, you don't own anything, right? You build something, you build it. Obviously for a client. So even if you're massively successful, you don't get the kind of the sheer joy of own ownership, if you will. I really wanna build a product and so that's when I, on file, I started QuestionPro and that's kind of been, never looked back since then. So that's been my kind of journey into tech, I guess. So that's kinda from selling cigarettes to, I guess to, to, to te

Dan Balcauski: 5:37

We are all very grateful that you did not take the natural path of selling cigarettes into into a deeper crime. So, I wanna talk more about QuestionPro. To give our audience a little bit of context. Could you give us kind of the 32nd elevator pitch for what is QuestionPro? Where does it play?

Vivek Bhaskaran: 5:51

Yeah, absolutely. we are an online research platform, so think of it we really target three different ICPs. Number one is consumer insights and market research. People, within companies that are trying to figure out what to, what the market is thinking about them. Number two is customer experience. So what your customers are thinking about you. So. And that's how, that's kinda the second part of our business and third part of our business, how employees think about you. So think about it from the context of surveys. We built a core survey platform, and then we look at it in the context of, how the market thinks about you, how customers think about you and how employees think about you. So the three different ICPs in an enterprise. And that's who we sell to primarily, and that's kinda our business.

Dan Balcauski: 6:27

And I appreciate that overview. And I wanna talk, shift a little bit here into, This program is called SAIC Secrets. And look, every CEO faces challenges along the way. Is there a specific challenge QuestionPros face during its growth That's. You thought was particularly difficult to overcome a moment that really has kinda shaped what the company is today.

Vivek Bhaskaran: 6:48

Yeah, multiple, first of all, multiple challenges. To say that it's one, it's gonna, fundamentally factually incorrect. In fact, we are facing now one now, right now, at the end of the year. We didn't grow, we didn't grow too much this year. So again, we gotta figure out what to do. But I think when we were, I think we had two or three inflection points. Number one is when we were about three, three and a half million dollars we were kind of stuck in that about three to 4 million bucks in revenue. So we grew from like. 2005 to 2010, we grew from like zero to about four or 5 million bucks, or four, three and a half,$4 million. Really, within four or five years. I was pretty happy with it. I was like, yeah, things are going really well. But then we got stuck in 2008, 2009, 2010 at that number. And it's not that we were not trying hard, we were just like, obviously I was doing everything I knew how to do. And we realized that, one of the mistakes I had made is like, and I've seen a bunch of my other friends also make, is like, we were trying to do different things and then each of them had a different brand. And one of the, one of the mistakes I made as I created two or three different brands within the ecosystem itself, and I had QuestionPro. I, I wanted to go up market, I wanted go to the enterprise. I created a new brand called Survey Analytics and so on. So that. In hindsight was a huge mistake. In terms of like, I think I think my, my, building a brand building, building a company, building a brand is so difficult that building two of them is like 10 f. It's not twice as more difficult. I think it's 10 times because you deviate your energy from one and da, da, da, da, all that stuff, you know that really well. So even if you're building multiple products, you can build multiple products, but make sure that the brand is the core brand that you are kind of leaning into because people can associate you with the brand and. Brand development is like one of the most hardest and the challenging most, it's just like people is very, very difficult to do. And and we have a great example, even in my own business. I mean, SurveyMonkey had a great brand and they kind of changed to Momentum and then they had to change back to SurveyMonkey. So it's kind is one of the, I think HBR at some point is gonna do a case study around it. Like they had a great brand, but they kinda said they want, Hey, we want to be part of ai. Train and things kinda change to ment and nobody really understood what momentum meant. And then they, oh, shit. Then they's spent about a couple of years and they moved back to SurveyMonkey. But so to me, brand is like a, it's a very core concept that, and it, most people get caught up with, oh, it's a good brand. I mean, you can make anything. Look, apple is an, apple is a great brand. I mean, it's a fruit. You, a brand is whatever you make out of it really. Right? How you, what you make out of it. So, to me, going back to your question. I think I made a huge mistake. And that, and there's a material economic consequence to that, that, dissipated our energy. And we struggled quite a bit between 2000 and, and 2014 to kind of grow the business. And then we finally, in 2015, we kind of combined the two businesses back together and kind of unified our m same brand. And then we got some, we got. We got stuck at, in 2015, at 2000 10, 2 15, we only grew from like, four to about 6 million. And then in 2016 we started growing again. We went from six to 10, 10 to 11, and then we got stuck again. 11, 12 million also, again, separate issue, but again, that got you. Every few years we get, we have a growth spur and then we get stuck and then we have another growth spurt

Dan Balcauski: 9:36

I absolutely love this answer because and we haven't, you and I haven't talked about this, but the reason for this podcast, the reason for being is because of exactly what you just described, is that, there's, I think a lot of ink spilled around, the zero to one journey and three guys in a garage, finding product market fit. People thinking like, oh, that's the end of the story. Like, we've got some customers, we found a model, and then I just see this over and over of these companies who get stuck at 5 million or get stuck at 10. And this is one of the reasons why I love talking to people like you is because, obviously, that happened to you as well, but you've broke through it. You've, it sounds like you've gone through this a couple of times. I'm curious, like, as you've hit these growth plateaus. Maybe it's the brand decision or maybe it's, things that you've learned over time. How did you, how have you gone about sort of diagnosing, like what's going on? It sounds like sort of with the benefit of hindsight, you'd now sort of realize like, okay, the, in the brand example you're saying like it diverted our attention and, it was, too few resources between too many initiatives spread too thin, I guess, but that, it sounds like that's happened a couple times. Is there a way that you've sort of been able to diagnose when you've hit these growth plateaus? Kind of what's going on? Like, okay, is this a macro issue? Is it something we're doing internally? Is this like, like, how do you think about that?

Vivek Bhaskaran: 10:53

Good question. First of all, I love the thank you for coining the term growth plateau. I love that shit. I mean, I actually, I, I don't know if it's coined, but you should totally own it because it happens to almost everybody every so often really. Right? Because people don't talk about it. People just say, Hey, look, we've been growing, and then, shit, we are not been growing. And so going back to your point, I'm trying to, honestly, I wish I could tell you that I ha I have a formula, but you know, e every time you have a year of bad growth. Until long you make material changes, orthogonal changes. My kind of current belief is that you'll have another year of, mediocre growth realistically. Right. So, and that's when you, at three years of mediocre growth will, create this growth plateau that you're talking about. Right. And it, and I actually think that this is especially true for kind of bootstrap companies versus uh, see in a bootstrap company, things are generally organic really, right? There's no, there is no, if you think about it, when you raise funding, there's a step function. Right. So you know, you get a bunch of cash, then you say like, look, you gotta do something different. So there's a natural step function in the business that said, look, you've got a bunch of cash, you gotta upgrade your chief product officer. You know the guy who started the company, he is really not a CPO. Then you gotta upgrade. I'm just making up that random excuse. But there's always a step function, right? So, because whereas when you're organically growing the business, there is no step function. You have to create that step function. You have to be the change really. So, so going back to your point. I think the parameters that I would try to look for in hindsight as well as right now would be if you have had a bad year, first of all, do not attribute it to macroeconomic issues. Right? So that's I don't buy that. I think that's bullshit. I think that's kind of like punting the ball. I think that's what I personally think, right? If somebody says like, ah, macroeconomic issues, then like, okay, look, the macroeconomic is gonna be the macroeconomic. It's your job within this macroeconomic condition to grow. That's what, that's fundamentally my belief. At its very core. So I would say, looking at if you have a flat growth here, what changes are you making? Right? And most people get caught up in this idea like, ah, we gotta go left, we gotta go right. And obviously you have debate around whether to go left or right, but more often than not is like. I don't give a fuck, just go left or right. Really just don't be there. That's a bigger problem than trying to debate whether to go this to where to go left or right. So one thing you'll have to make a decision if you have like a bad year, is like, what are you doing completely differently this year into the next year? So that is, to me is a fundamental construct that has helped kinda us move.'cause we have to like really auto thing. They have to say like, look, we've had a couple of bad years. We have to do something. No gany at a minimum, gany different. Now you don't have to turn, you have turn the

Dan Balcauski: 13:25

We will unpack that a little bit. You've said that term orthogonally different, like what does that mean to you?

Vivek Bhaskaran: 13:28

so thinking like, for example, when we got stuck in that 10, 10, 10,$12 million range we did a, not a huge acquisition, but a material acquisition. We bought a company that was making three and a half million bucks in revenue. So we were at, we grew from 12 to. 14 and then we bought in three and a half on top. So you know, that year we grew from 12 to 19, basically. Right. So that created momentum really. Right. And normally you'd say like most companies, and we are bootstrap, we don't have that kind of cash, we don't go out, even think about m and a. Right? So you're like, oh shit man, this is not part of our. Most companies don't think about it that way, but that was an orthogonal thought process to say, Hey, can we just go buy somebody and add revenue to us and create momentum? Which normally, honestly, I wouldn't think about it that way. But then, we said like, well, we're not able to grow organically, so let us try to do something that we have never done before. And we did that and we able to, we were to somewhat. Pull it off. And that was, that created another Strat of Momentum that got us from like in the 10 12 range to the 20 range. Then we went to 24, then 28, then 32. And so that's kind of, that kind of created a little bit of momentum over there at that point.

Dan Balcauski: 14:27

you're hinting at this a bit in that, I think one of the hardest decisions that founders CEOs face is kind of knowing when to stay the course versus knowing when to change direction. I guess, how. How do you personally distinguish between when to push through versus, when to make these changes? Are there, metrics or milestones that you're trying to look at?

Vivek Bhaskaran: 14:50

A little bit is, I mean, I index on growth really. I think fundamentally my belief is that if you're not growing then there's something wrong in the system. Simple, right? I don't know what's some wrong, there's something wrong in the system. So, so this year we'll have a pretty low growth here, for example. And we gonna make some significant changes. We I'm already. Prepping for those technical changes and, and we took a, take a look at the metrics and largely I'm, we're fairly data driven I think and a little bit of gut obviously. So it's like, it can't be fully data driven then it. It's it's not gonna work. At least that's my opinion. So, so the point really is like, okay, so, you look at the data and then you go with your gut to say but the most important thing that I would say is like every time I've said like, look shit, we gotta make a fucking change. That's it. Even internally, because a lot of the. A lot of the pushback and the conversations are gonna be internal conversations, not external conversations. More often than not, at least my experience being like there's internal, oh yeah, we've been doing this, we should stick the course for another, another year, another few months, another quarter, really. Right? And I have certain benchmarks and principal like, look, if it's not grown by 15 months, if there's no progress in 15 months, three more months ain't gonna make a difference. I mean, we've given I, unless you kind of say like, we've gotta stop doing what we are doing. Right. So my, my, my thought process really is stop doing what you're doing right. That forces you to kind of make that orthogonal change, which is, I keep alluding to, which is then at least you can say like, okay, we're gonna go live, we're not gonna do what we did. So usually my benchmark is like, 12 to 15 months is like, when, okay we are, this is not working. We've given it a good shot. So that's kinda at least my personal benchmark. I mean, a lot of our friends I know like, they give less and they give more, but that's a more of a personal kind of choice. I think it's a little bit of a personal choice. Like, yeah, I give it a shot for like, 12 months. A year is a good number. It's kind of random number. I would argue it's a year is a good number. Again, depending on the size and context of the problem, but I mean, give yourself some time and then hold yourself accountable to that time, really. Right. So like, okay, we're gonna give ourselves this time and if it doesn't work, we gotta make some changes. So that's another way to kind of iterating through that.

Dan Balcauski: 16:44

And then I think with the, whether with the brand situation, which was earlier on or you mentioned this acquisition around the 11, 12 million mark, I guess kind of looking at. One of those situations, kinda looking at what was kind of the key to sort of breaking through, because you've talked this couple times of like being an indecision, these internal conversations of left or right, but eventually you did make the sort of the you made the decision. Like as you kind of look at that, like what do you think was the key to sort of like finally unwinding that log jam?

Vivek Bhaskaran: 17:15

Yeah, so great. I love it that you put it as a log jam. It is a log jam.'cause you're like, fuck it. God dammit, I'm working my ass off. Shit's still not working. Right. A good kinda a good kinda way I think about it that, that has helped me is like, imagine I, and I tell this to all the folks who work with me also, like, like imagine you got fired today and you got hired tomorrow for the exact same fucking job. What would you do? Just, that's it. This is what consultants do. If you think about it, consultants don't have the baggage history. I've made a bunch of decisions throughout, like le let's say in the last four years, I've made a bunch of stupid decisions, right? A consultant comes in and says, well, I don't give a shit. I'm the new guy. This is what we're gonna do Objectively. You look at the business, you look at what's going on, look at the market and say, Hey, here's what we need to do. Right. You don't have the baggage of the last four years of bad decisions that you've made or good decision. It doesn't even matter really. So another way to look at it is like, if you were fired today and you got rehired day after tomorrow, what would you do? Now you're the new CEO simple. You don't have the baggage of all the 15 decisions of 20 decisions you've made in the last one year or two years, five years, realistically. Right? And that helps you in your, at least helps me, lemme tell you. That helps me like rethink what I'm doing. Right. It's almost like unlearning certain things and okay, look, here's where we are. We are at 32 million bucks. We need to get to a hundred million. What are we doing today? Objectively not based on where we've come from and all that stuff. We can talk about 20 years, da, da, da, da, all the brand stuff, but that's all water under the bridge where, you know, if I just go out and private equity companies do this all day long, they're like, look, you'll just get a new guy. He'll come and do what? You know what does it take to go from 30 to a hundred? That's the only question that matters. It really doesn't. Nobody gives a shit how you came to 30. Literally that doesn't even matter. Right? Like we are where we are. How are we gonna get to a hundred? That's the only question in any everybody's head. So that kinda rethinking and retraining your brain is kinda where, I try to do that in that context. I kind of physically say like, look, if I got fired tomorrow and I got hired as a, CEO of another 30 million business, what would I do? And my goal is to get to a hundred. That's what you know, and let's make all those decisions based on that context. So I think that's the way I think about it, that's one way of thinking about it. Maybe not the only way, but that's at least one way of thinking about it.

Dan Balcauski: 19:25

Yeah. Well, because there, it's a, there's so much, sunk cost fallacy is one thing that comes to mind. There's, and then there's just emotional baggage, right? There's like, well, I've put all this, I've put all this work in making it the way things are. And then like, what does it say about me if I can't? Make it work hard. Like if we just work harder. If I go a different direction, does that mean I, I couldn't work hard enough to make the other thing work? Does that mean my strategy was flawed before?'cause I thought this was gonna be the thing that broke it. And I love that because you're kind of clearing the decks of all that. You're just like, look, that that's in the past. You cannot change that. New person comes in and that new person can be you. There's

Vivek Bhaskaran: 20:03

But if you think about it, that's why a lot of like, public, bigger, companies like, they, they do change management because of this one reason, because this, again, new management comes in and they're like, we don't care what you guys made. Whether you use Salesforce, HubSpot, I don't give a shit. This is what we're gonna do. If you think about these kind, random conversations, chew up a lot of our energy and it's like, oh, we said we'd do this or we gotta do it.

Dan Balcauski: 20:23

Yeah. Yeah. Well, you've mentioned a few times the fact that, impressively, you guys have scaled QuestionPro to 30 million without external funding. I'm curious, like what drove that decision to bootstrap? Originally I.

Vivek Bhaskaran: 20:37

To be brutally honest bro, I didn't even know that I could raise money. I'm not even gonna fuck with you. I literally, I like, literally like, like this was 2005 in Seattle I just built. And look, I'm a software developer so I can build anything I want, really? So it's like the, and then we built it and then we were like, oh shit, we gotta get. Fucking customers, right? I'm like, and we were like, how do we, like, we were looking at each other, like, how do we find customers, guys? And we had no, we had no idea what to do. And, but SEO was, SEO was not even SEO at the time, but we knew how to get, we were like, oh, look, if, if you get number one on Google, we'll find customers. I mean, they'll find us and we are good to go. And so we got into that. And so one thing led to the other and we quickly made, we start getting inbound customers. We, we got good at SEO before. SEO was a sexy thing. And so, so going back to your point. So we kind got to three,$4 million, even without thinking about it. And then we were like, oh shit, we are already making money. I why go know waste our, why go? And we decided not to raise money. And then we know kept growing and then we got stuck and da da da. But every time we've thought about raising money, we've kind of said also that, look, there's no free money in this planet. Simple. It's got its own set of, it's got its own set of kind strings attached to it. And and we decided, well. No, I mean, we will hustle harder and try to make it work. So that's kind, I mean, it taking us longer time, but that actually I'm pretty happy with it. It's fine. It's, I sleep well at night, so that's also part of what I live for, so.

Dan Balcauski: 21:53

Yes. If you're not sleeping well at night nothing else. Everything else kind of doesn't matter at the end of, at the end of it right. Kind of your health, your sleep and happy family. And then if those things aren't working it doesn't matter how much money you have in the bank but you mentioned before you've. You've done m and a and I would say like, a lot of founders assume, rightly or wrongly, that a significant m and a is impossible without venture funding. And yet you've obviously completed several deals. And then I guess also there's a, common narrative going around right now that, m and a is, oh, it's really difficult right now, et cetera. I guess, what did, what would you say to, to either of those,

Vivek Bhaskaran: 22:27

Well first of all, first of all, I'm an entrepreneur, so no, don't say no to me, right? I fundamentally believe this, right? So if you say you cannot do something, I'm just, I'll just fucking do it just to prove you wrong. Just I'm that kind of an asshole, right? We all have that, like, yeah, that's at least. So if you can't sell cigarettes and like, ah, could fuck you, man, I'm gonna figure out a way to say, I know buy and sell cigarettes and make a buck in between,

Dan Balcauski: 22:46

gonna move to Russia and sell cigarettes.

Vivek Bhaskaran: 22:49

Yeah, exactly. Think about it like, that's the challenge. Going back to your point, really like, look. M and a, like everything else is like, a lot of it is opportunity and opportunistic is like, and you never know when people wanna sell the company what their personal motivations are. We've bought a bunch of companies where we've absorbed them. They want to be part of a larger business realistically, and they want to be part of a GM of a larger business. So that's that's one motivating factor realistically, a lot of times. A lot of times it's like, okay, we built some amazing tech, be it, we have no distribution engine. That's gonna be another motivating factor. So my analysis is that, look, yes, you're right. I mean, there is a fundamental overarching concept, that like, look, you cannot do m and a. It's like saying like, Hey, you need a 10 x engineer, you gotta pay a million bucks. Yeah, yeah. Google pays a million bucks for engineers. That doesn't mean, you, there are amazing 10 X engineers that are not, that you don't have to pay a million bucks for realistically. Right. So the, so this narrative. That you cannot do m and a. First of all, I don't believe in it, right. I mean, okay. And MA and you're right. In certain cases, it's simply not gonna work. If you in a company that is funded, and typically we've, we, we've done m and a with typically, at least we've done m and a with founders directly. So one of the, one of the cha, one of the, one of the benefits that, you lean into your benefits, right? You lean into your strengths. What are our strengths? Yes. We are not, we don't have a shitload of cash. We are not, we are not. KKR or BlackRock, so we are not that. But no, we are honest and we can make a decision fast. That's our, that is our kind of like, key. That's our, at least my key driver, right? So you can walk in and say like, look, I know I'm, we think this is a good idea. We are not gonna be able to pay you what you really, obviously what you want, but here's what we can pay you and you can make a decision. And this is what we believe in. That's it. Right? And you either, yeah, you can say like, Hey, this is not gonna work for us, or it's gonna work for us. So, and you can go through that motion a couple of times and then you get, you, you actually land deals. You land certain things or like, you know what, actually I don't care about the, it's not about the amount of optimizing everybody thinks it's about optimizing the. The value the transaction price. But it's not, it's not actually not a hundred percent. Most, more often than not, it's about more often. Again, I would say like 80% of the time it's optimizing the transaction price. But there are 20% of the time where like, like the optimizing, optimizing the transaction price is not the primary driver for both parties. In that case it's like, hey, combined effort, combine, one plus two, can we make it three or more than three, obviously. So, so, so those are the ones that. I cannot, those are the ones that I can close. You could argue that there are bunch of thems, and for the amount of deals we've done, we've not also done a bunch of deals. But the ones it can be done. The point, my point is like, to basically say like, oh, it cannot be done. It's kind of throwing up, it, throwing your hands up in the air. And again, things have to, you have, it's not that your timing, timing has to be right, right. Some people, some person like, look, I'm done with this, I'm, now I can take$1 today,$2 tomorrow, and$3 day after tomorrow, I can make that work. And then that's how actually most deals are done. Anyway, so, so we've we have stumbled into it. We, we experiment with a few and then it. It worked and then we kind of did more. And then now we are kind of, and I would say that I don't feel uncomfortable making, making a deal. It has its own set of issues and consequences and, distractions and everything else, but it can be done. That's my point.

Dan Balcauski: 25:47

So it can be done. And then I think you, you said a couple things in there, which one is the ability to make decisions quickly can put you in an advantage in some of these processes. But you have, and you have done a few of them, and you said, things like, not necessarily maximizing the transaction prices is always kind of, high on the list of the buyer or seller, probably the, the seller's list or there may maybe other things. I guess having gone through this process several times, I guess, are there sort of things you've learned about good ways to sort of, structure these, As sort of a bootstrap

Vivek Bhaskaran: 26:17

Yeah, a absolutely. I mean, and this is why everybody will structure it the same. It's not even, I would say like fail fast. Like come to the most important decision in any m and a conversation is the price tag. Okay. Simple, right? That's kind of let that, and so if you, if there's no ence on price tag and price tag is, in my mind, it is kinda almost randomized, right? I mean, people can say like, look, hey this, but you know, look, I'm an engineer, so you can put an Excel spreadsheet together and do all these modeling and then multiply that by a random number in the end, and then so, come on, relax, right? I mean,

Dan Balcauski: 26:48

Said more fiction has been written in Excel than all word processors combined.

Vivek Bhaskaran: 26:52

That's a goal. That's a good one, dude. I love it. I love it. I love it. I love it. Yes, I know exactly what you're talking about. So, so somebody even comes like, oh, here's the benchmark for all SaaS companies. Da da. I'm like, I don't care what the benchmark for SaaS companies are. Like. They're publicly held SaaS companies who gives you shit. It is gonna irrelevant conversation, right? The benchmark that matters is, you wanna sell, I wanna buy, and here's the price tag that matters. Is this good enough for you? And the store. That's, that, that's about the only benchmark that actually matters, right? So coming to that and coming to that, and I think, coming to that and I play like, look, a lot of companies who, you know, a lot of founders, my strength are really, I talked founder to founder nine, nine out of 10 times realistically, I'm like, look, you wanna sell, I wanna buy and let's talk about it directly. Let's cut out the middleman. Cut, cut out everybody, first of all, and I'll tell you how much I can pay you and. And why I believe this way and you can have a different viewpoint, right, Dan? Like, lemme put it this way. You can have a different viewpoint that doesn't make you wrong. And my me right or me wrong. And you're right, we have a different viewpoint. We have different points of view on the same subject and we have different, we have, yeah, different, fundamentally I do believe that different points of view is emanated from the fact that. You, we have asymmetric information, you know a lot about certain things. I know a lot about a different set of sort of things, really, if you think about it. And then we are trying to merge these things together and we may or may not be able to merge. And so, so I, the things that I do is like, I try to get to a number really fast and I talk about valuation before I talk about all the other conversations, right? That is, at least to me at least, I mean, I respect your time and I respect. I wanna kind of be optimized about this and if we are like apples and oranges apart, like we're really, really far apart, you think it's worth 10 million? I think it's worth one. We we're really far apart. Alright, it's cool, but we found that out in like two conversations. We didn't spend four months, fooling around in Excel spreadsheets and I come back with a$1 million number and you come back with a 10 million number. Like, okay, so let's have that, let's have that brass tack conversations upfront rather than having that conversation after six months. And then that becomes now that now we've wasted six months. When we are completely far apart.

Dan Balcauski: 28:49

Got it, I don't wanna ask or ask you to disclose any sort of private information, but let's say for the purposes of argument, right? Like, you're a bootstrap company, right? So you've got a certain amount of cash flow. And so assuming you don't want to take out, you don't want to become a leverage buyout shop and load up every, everything with debt and et cetera. Right. Let's say, you're clipping along at what, 20 million and you see a company that's like, Hey, I wanna buy, and we both agree that it's five. Right. Or some amount that's like, okay, given cash flow, this we're gonna have to get creative. Like, I guess, have you thought about, or have you figured out ways to sort of structure those deals such that like within the framework of a constraints of cash flow and a bootstrap company that they're both sides get what they want within the sort of constraints that you're faced with, without saying like, well, I've got this giant

Vivek Bhaskaran: 29:30

I mean, Yeah. there's certain things that are fundamentally like, like if we are acquiring company that is like upside down. Like when I say upside down, I mean like cashflow, cashflow negative. Really like that. That is very, very difficult. I've never been able to make it work realistically for me. Right. And I tell them upfront like, look we run a 20% even diverged, so anything we buy has to. Kinda like match that. If they don't match that, they better match that in, my CFO would be like, dude, if you buy a dollar that is less than 20% EBITDA margin, we have to find that the extra, it's a Basic math. I gotta go find somebody else to, they have to produce 22% if you're producing 18. If I get a dollar for 18% margin, gotta produce 22%. So, so first is like, we look, I, if it is cashflow negative, then I'm okay. Fine. I mean, I, it is not. It's not a bad idea or a good idea. It's just like, I cannot do the deal, really. And Now then the question becomes, is cash cashflow positive? It's making XX we are at this. And then, combined, can we get more? Right? They piggyback off of us. And then, and that is the kind of. A cumulative effect combined. Can we get it? More Can the revenue? Let's say like, a good example would be like, somebody's making 3 million bucks right now and 300 K in profit right now. So that would be a kind of like a, yeah, we can digest that. Like we know how much, how do you structure it? Well, they want to get paid, whatever they want to get paid. If they say like, oh, we want 3 million bucks. I'm like, okay, we may not be able to pay 3 million bucks, upfront, but we'll pay you 800 K upfront. And then another 1.2, 1.1, 1.5, whatever it is, structure that, tructure that. So you get your three, you get your money. But you, but both of us have to believe that this business, that 3 million bucks actually gets to five or 6 million bucks over the next three years. Right, and that, and you can participate on that ride. And then we have certain benefits. We have a global footprint we can sell globally, blah, blah, blah. I mean, there's gotta be some kind of value, the model to our other method to that madness. And if it does work then it's worth doing the deal realistically on both sides, then it's worth doing the deal. And that's how I've structured it. At least that has worked for me. And a few folks that have joined me in this journey also.

Dan Balcauski: 31:25

Thank you for outlining that. And so it's, yeah, so helping to structure those payouts so that, cash flow wise, they make sense because that's the big Variable. It's not just, it's not just the p and l, but also the cash flow that, you have to watch out for when you don't have a, giant backer whether it's venture capital, private equity, right? Writing your big checks on the backend to just outlay all at once. I wanna go back to something you said we were talking about earlier in the conversation. And you talked about this idea or this experiment that you ran around creating a entirely separate. Brand. And obviously, with the benefit of hindsight, et cetera, you realize that was a mistake. I'm, I am curious kind of what drove you to that decision in the first place? Because this is actually a surprisingly common thing that I hear people out there. Thinking about doing. And so I think that there's pro even though this is sort of a mistake, I would wanna kind of understand the thought process a little bit more of like, what were you trying to accomplish? Did it help you in any way? And then I guess you, you said it was a bad idea, I guess, how you sort of realized that. But let's go to the front part of that.

Vivek Bhaskaran: 32:27

Yeah, absolutely. Absolutely. So this was back in 2010. I really believe that we wanted to go up market, we wanna go into the enterprise, right? So, and at the time I believe that the enterprise brand is completely distinct than the consumer and brand really. Right? There was like ExactTarget and MailChimp. There was sif. Let's say the drop, there was mosey and then there's EMC. Really back then, at least most people don't know what e EMC is today. But, so if you think about it, back in, throughout, throughout 2000 to 2010 there was distinct and enterprise sales motion, and then there's a distinct consumer sales motion, realistically. So I thought that we needed two different brands. For that. And that's why I created a new brand. And then once I created a new brand, I'm like, yeah, let's start up as a separate company altogether. And I was just fucking even dumb, so on, so forth. Okay, now. Alright. So I think the notion that like, okay, look, we want to create, so obviously the, like you said, surprisingly, you've heard about this conversation. Many times it's probably because, like, okay, we are doing this, but we wanna do something different. Right? That's the, that's the fundamental kind of, first principle that you can think about. So I'm doing X, but I wanna start doing Y now. The question really is. Why, why is so different? That's why, the second thing is so different that we will do it as a separate company, separate brand, separate. It's not related to this. Right. And I think that's kind of the, that's how that was. At least my way of thinking about it is like, okay, look, I wanna go into the enterprise and I'm at consumer, so I need a different brand for that. And the way to operate that is gonna be completely different. Dah, dah. That's how I convinced myself. That's how I created it. And then you realize later on that like, look, first of all. You can have a single business with the same brand that, caters to the consumer as well as caters to the enterprise. And you could argue, the, consumerization of it and all this stuff came along and, it made, it, made it possible. And maybe that's the thing at least for me, I would say like that was my thinking process. Going back to your question. Which is like, why did you create a new brand? Because I thought the new thing that I was trying to do was completely different than the current thing that I'm doing, and so therefore I needed a new brand. Once I decided I'm gonna have a new brand, then I decided it's gotta be a separate company, which is again, a stupid idea, and then have a separate group of people working on it again. So that, that created its own set of challenges. I didn't under anticipate the set of challenges that would create, right. I mean, it seemed like, in paper, like communism in paper, everything sounds good and fucking, and you get to do it, they're like, god dammit, it's kind of crazy. So.

Dan Balcauski: 34:44

So, yes. So, so creating a new brand in B2B to capture enterprise versus a more transactional like, like communism looks good on paper, does not work at practice. I guess, with the benefit of hindsight, if you could go back and kind of talk to yourself at that point in time and sort of advise, be like, Hey, like, I know you're trying to sell up market. Don't create this goat new brand, here's what I sort of advise you to do instead. What would be your advice to,

Vivek Bhaskaran: 35:09

Yeah, just create a division in the company. That's it. Just create a separate division in the company. That's it. You know you and have a separate person running it and kinda like have that, I say it out, you don't have to create a new brand that, because the brand, I really believe is the brand Halo effect matters quite a bit. And so, yeah. You just say like, look, yeah. I get it. Fundamentally, that was a good idea. Like the core construct is not debatable. The core construct of having a, having, yes, we need a new group of people selling selling into the enterprise. And even on multiple products and the way you sell product one versus. The way we've decided this also, like we think about, I talked to you about three different ICPs'cause, and I have three different sales teams actually that sell into the SAPs, but report up to the same VP of sales realistically. Right. So the, so, so it's kinda like, have, there, there is, I mean there's a, practical need for isolation, but there's also kinda like, balance that out to kinda like, having not like all these isolated things. So, so going back to your point, I think, you know what I would tell myself, would be like, Hey. The core construct, there's no point debating the core construct, but the implementation of that construct can be in one or two different ways. One is to have a separate division in the company that, and have se a separate GM that runs that division. That's it. Right. It's not that complicated. You, yeah. You could tell it's, we are not IBM, but Yeah. You can create a different kind of segment within the company and say, Hey, you go. You go chase after the enterprise business and you can do this and here's the benefits for you and get that done. And I isolate that out and that's how I would do it. In hindsight, if I did it that way, I think we would have been at least much more successful. We have not last four or five years at the time. But it's fine. It's, it is what it is,

Dan Balcauski: 36:38

yeah. Yeah. Well, well, well hopefully with your hard earned wisdom, you've maybe saved someone else four or five years of going down the wrong path. For, cause I for like, whatever reason, like, I, I think I had, I have hypothesis. Season of why this is so common, because I think at B2C, it's done quite often, right? You have Lexus and Toyota, you've got Black and Decker and Bosch. You've got, Was it Luxottica owns, 20 every single brand of sunglasses that you ever buy except for Warby Parker right. And so people are like, oh, well these consumer guys are doing, and you have p and g House of brands, but it's just it, it's, yeah, it's just generally not required. And it's undervalued. For and yeah. And then it can, especially when you're Yeah. A small company, it's hard enough to get one brand, one business model to work, let alone multiple and just ends up in all the sadness that

Vivek Bhaskaran: 37:20

gave myself the same thank you for bringing that. I literally gave myself the same stupid fucking excuse around Lexus and Toyota. I'm like, oh, Lexus, Toyota to do it. We should be able to do it. Like, I'm like, yeah, no, that, and I think you're right. Your core hypothesis is in, on the consumer. You can't, you can pull off a house of brands, but on B2B, it's like. It's almost, I don't think it's possible literally right in, in B2B and you have to kind of fundamentally think, like, I know, is this a different kind of a, if you're and most SaaS software is B2B stuff. Most not all,

Dan Balcauski: 37:48

I would say the one minor exception. And I haven't, I haven't, researched this thoroughly, but I have been part of companies that have done this, which is, if you do m and a and so you acquire an entire other company, like say it's like, Hey, we're gonna go acquire the super low end competitor of ours. We're gonna just leave it. We're gonna, it's gonna be a fully owned subsidiary and just gonna kind of leave it there on its own. And now we own both but we're not, but the, the people in the current business aren't gonna worry about it. And now we've got this other company kind of just there and we just leave it there as like a defender, low end brand. I've seen that kind of thing work, but you're not, but also that tends to be when you're at a much larger scale

Vivek Bhaskaran: 38:26

much much larger scale. Yeah, exactly. No, yeah. At a much, much larger scale. I mean, Medallia for example, I compete with them a little bit. They've bought a bunch of different companies they've kind of kept some of the brands kinda of like as is, but most of them they've kind of like, buy Medallia or something. There's also this concept of the core brand. The core brand has to be strong. And Intuit has done this with Intuit, MailChimp, da da da da. Intuit is a very strong, they're building Intuit as the core brand really. Right? And TurboTax and Intuit and all that stuff. So.

Dan Balcauski: 38:50

Well, Vivek, I could talk to you all day, but it the be wanna be respectful of your time and our audience's time. This has been a super fun conversation. I want to close out with a couple of rapid fire closeout questions. Are you ready?

Vivek Bhaskaran: 39:00

Shoot away, brother.

Dan Balcauski: 39:02

Awesome. If we have the opportunity to remove the mosquito from the planet, should we do it?

Vivek Bhaskaran: 39:07

Yes. If you can. Kill kills almost half the, the number one cause of death in, in the planet are mosquitoes. So if we can figure it out I doubt we can, but you know, if we can, if somebody figures it out, we should do it.

Dan Balcauski: 39:19

Awesome. What book has most shifted your perspective?

Vivek Bhaskaran: 39:23

Principles by Ray Dalio. I think his concept of a radical transparency has really hit me, and I, that's why, I, we talked a little bit about before, I don't really give a shit. I say what I wanna say, and I, even internally, externally, I'm the same guy and I, we, for example, like. All our revenue numbers are public inside, inside the company. Every team that makes, you can go do the dashboard, you can go figure out, what, which team has made how much money to the date down to the t. So I do believe in, transparency creates efficiency. So I think I, I learned that from that book Principles by Ray Dalio. So it was a pretty frat book, but, you can read the condensed version of it, but basically it's like, more transparency is better no matter what. That's kind of like A-T-L-D-R.

Dan Balcauski: 40:01

Principles by Ray Dalio, add to your bookshelf. Look, nobody of any success gets there alone, and I believe that you are successful. You're all the way to 30. I know you're not to a hundred yet, but you know, then once you get to a hundred, there's gonna be another number behind that. Has there been a close mentor leader who's really helped you on your journey?

Vivek Bhaskaran: 40:18

I think a couple of them not just one, but a few of them, and these guys are I'd say like more. More in the traditional sense mentors, these guys have, taken the time and patience to kind of, listen to me mouth off about all kinds of stupid shit and then give me, gimme their opinion. So, a friend of mine over here in the Bay Area called Rahm, and then also my former boss, Dwayne these guys have been very instrumental in terms of, just listening to me. That's it. I'd say like these two guys have been they're still one of my best friends. I, it's mentor, friends, family, everything put together. I would say like, we go skiing with them, but they also, I think they have the patience to listen to me and call my bullshit. So that's that's kind of the key thing.

Dan Balcauski: 40:54

Awesome. If I gave you a billboard and you could put any advice on there for other B2B SaaS CEOs trying to scale their companies, what would your billboard say?

Vivek Bhaskaran: 41:03

Good one. Ah shit man. Let me think. Hustle harder. I'd say like that's it, it's like I still believe in like kind of grinding it out. I think that's, and I've always believed in it and I will continue believe in it. It's like hard work and, work ethic beats talent. I would probably argue if you had given me, guy with get better work ethic, then better talent, or I'm like, ah, I'll take a work at the guy.'cause eventually all the talent would. Mediocre work ethic still doesn't, I don't believe that at least. So, but you know, for different people, I have different viewpoints on this, but so yeah, hustle harder is probably what I would put,

Dan Balcauski: 41:35

Hustle harder. Vivek if listeners want to connect with you, learn more about QuestionPro, how can they do that?

Vivek Bhaskaran: 41:40

Yeah, it is on LinkedIn. I'm not on Twitter or fa fucking not on Facebook for sure. So, so,

Dan Balcauski: 41:46

Amen.

Vivek Bhaskaran: 41:47

So, so yeah. So just LinkedIn my is search on LinkedIn for V on I can't, I think LinkedIn has a handle. So anyway, so we password on LinkedIn? I'm pretty active on LinkedIn'cause that's been my thing. And I feel it's kind of get the right balance between social versus business versus that's gonna, at least for me, at least, it works. I would argue Twitter does not. And Facebook is a fucking shit show. Anyway, so I'm, I'm so glad, I'm so happy. I'm gonna tell you, I'm so happy that I never got onto Facebook, so I'm like, I don't have to get out of Facebook because I never got on the goddamn thing to begin with. So.

Dan Balcauski: 42:18

Well, I'll put link to your LinkedIn handle in the show notes. For listeners, everyone that wraps up this episode of Sask Galy here, thank you to Vivek for sharing his journey, insights, and valuable tips. For our listeners who found this conversation as enlightening as I to remember, subscribe, show up, miss out on future episodes.