Lessons in Scale: Building the Foundation for High Growth with Qualtrics

This has led to mountains of experience data flowing into organizations. This is where Qualtrics comes in. Business succeeds or they fail based on the experience they deliver to you personally. What Qualtrics does is we enable companies to be able to create, monitor and manage every experience on a single platform. Experience management is becoming as critical to business success as any CRM or HR system. Customers believe that XM will play the biggest role in determining which companies succeed and fail. The ability to be able to understand the feelings, the emotions of your customers and your employees towards how you run your business and towards how that affects your brand is just golden. There's some magical things that you can start to do at this point. We're ready to take XM to the world. We're at a point where experiences matter. Every moment matters. It's becoming the new currency of business.

Well, hello and welcome to everyone. Thank you so much for joining us for this session. My name is Julia LaRoche. I am a correspondent for Yahoo. Finance. And I'm pleased to bring to you this discussion with Qualtrics CEO Zig Sarif. And we will be discussing lessons in building the foundation for high growth. I think this will be a very interesting conversation. I encourage all of you in the audience to please submit questions throughout this discussion. We will save some time at the end for Q and A. So, Zig, it is great to be with you. So thank you so much for joining us today.

It's a pleasure to be with you as well, Julia and everyone, just a big shout out. Hello. Hope everyone's having a great day. Looking forward to this.

I am too. So the video we were just seeing has given a nice overview of Qualtrics experience management, the new category that you all defined. Also, you know, we are living in the experience economy. So I would like to just kind of start Zig at a really high level. Walk us through the experience economy and the opportunities that you have been seeing.

Yeah, that's a great question. Look, if all of us reflect on the world that we're living in right now, and if you just kind of take a step back and just think back to what things were like 10 years ago, and then picture into the. Just reflect on the way the world works today and the way that tech has shaped things, especially even in the last year. But every organization, every company in the world is going through what you can think of as an experience transformation. There's been a lot of talk about digital transformations, and digital transformations actually kind of pave the road towards using technology to reshape the way that we interact with our world, the way that you end up interacting with any organization, any business, the way that you do things with people. And what you're seeing is a massive market and also a category opportunity that's been created as part of that. We're pretty important shift in that. And if you think about the average consumer experience or you think about your own consumer experience, it's easier than ever for you to be able to change the service provider or the product provider that you're interacting with. It's really within a matter of a click, right? And what people are seeking to do is constantly design, hone in, improve the experience for you personally. And what Qualtrics does as part of this is we provide a single system that helps people to be able to connect with the hearts and minds of customers, of employees, and then help to be able to optimize and shape the way that customers end up interacting with an organization. The way that employees are engaged with the company that they work for. And frankly, that ultimately creates a feeling that you have around the brand and the product. Is the product more personal? Is it connected to you regardless of what industry you're interacting with? Could be an airline experience, it could be a hotel, it could be the product that shows up at your front door. And so what's happened over the last five years or so is a new massive market has opened up that's focused around what we call experience management. And software is being used in that market to help people to turn products into obsessions, turn brands into religions, help customers to become fanatics about what they're interacting with and frankly, help employees to feel more connected and become ambassadors of the things that they're doing. All of this is actually the result of inexperienced economy that we're all living in. And so that's, that's what, that's what we've seen happening. And Qualtrics has been a huge participant in the way that this market's been growing.

I like that, you know, software to turn customers into fanatics, employees into ambassadors, products into obsessions, and brands into religion. So before we get into, you know, the opportunity there, the total addressable market, you all are going after the use cases. Some of the lessons for folks watching, it might be helpful to kind of frame up Zig your own career story, how you got to Qualtrics. I know you were at Microsoft before, but what was it that first got you interested in joining Qualtrics organization?

Yeah, I spent almost two decades at Microsoft and that makes me sound pretty old, but I can Tell you that those two decades went by really, really, really fast. And I was introduced to qualtrics in around 2015. But before I go into what pulled me into Qualtrics, what kept me at what I did at Microsoft is we spent a lot of time and I personally spent a lot of time working on new category creating technologies, ways of reshaping the way that we view our world and the way that we interact. One of those products was a product called Lync L, Y N C. And Lync was something that we started way back in 2002. And we effectively sat there and said, what if we reimagined the way that we interacted with each other in a digital world where you could connect with people within a click and instead of looking at phone numbers, we could use whatever mode that we want to use to connect with people, whether it's going to instantly connect and chat with someone, if you want to be able to do video, if you want to share and show them what you're looking at. And again, this is going back two decades ago, right? And so at that time the way things were done is you would send an email, you pick up the phone, you make a call. Broadband was just starting to take off. It wasn't ubiquitous and broadly available. If you wanted to do a video, you had to walk into a conference room. If you wanted to do an audio conference, you had to call into a phone number and then hope that maybe you got an operator to assist you to get into that call. Or Maybe there's an A4 digit string or 10 digit string that you had to use to be able to connect. So things were all disconnected and we imagined a world where it would be much more people centric. And that product today went over 100 million users. Today that product is known as Microsoft Teams. It became effectively a new category creating way of how to think about the communication collaboration experience that we all partake of when we use tools like Zoom and tools like Slack and Microsoft Teams and others. And so I spent time working on things like that and it's what kept me there is because you get to reimagine what the world could be like and you get to work with a lot of interesting people and you're not reading some textbook of how to go do it. You're constantly figuring out what's the next chapters of that textbook. Well, when I met Qualtrics, one of the interesting things at that time is there's been a lot of conversation as get more data, as you get more data available around how people interact with each other and with products and technologies. You have this huge opportunity to connect with human beings and become more empathetic, become more personal, become more connected to the emotions and interests and preferences, whether people tell you these things or not. And this was something that Microsoft, that we were talking a lot about at that time, but nobody had built a technology system that perhaps could act as a way of reshaping how we looked at that. So we'll talk more about that, Julia. But what pulled me in, frankly, is what kept me at Microsoft. And so one was, is there an opportunity to leverage a technology system to completely rewire how things have been done traditionally? And two is, are there elements of how you would get to market that nicely complement the way the technology is built? And I saw some very unique things in the way that Qualtrics is put together that way. Three was the culture of the company. And culture is a pretty deep, deep thing, which we can talk more about. But some people like to say, well, we have a culture because we wrote on our website that we've got four things that represent our culture. You walk into the building, and maybe somewhere on a wall, someone has written it up. But culture is. It's what's in the mixing bowl. It's what you feel in the air when you're interacting with the people that work in an organization, whether it's in the digital experience, whether it's, you know, in a physical building, whether it's what a customer feels when they're touching or interacting with an organization, you know, And I saw some very unique things in the way that Qualtrics had been built from the very beginning that were longstanding, and frankly, you know, we're able to build the roots of the company on. And the fourth thing was the people, frankly, the founders and the stakeholders that backed the company. And the one thing I looked for is how are they living their lives? And do you see the culture of the company in the way that those people are conducting themselves within the organization, within the business, but outside of the company as well? And it's a combination of those things that I saw is a really cool sort of consistent pattern as I got to know Qualtrics, and I got to know Qualtrics over a period of about a year and took my time. I wasn't looking to leave Microsoft because I loved Microsoft, still love Microsoft. But what kept me there is, frankly, what also pulled me into what I saw. Qualtrics. And so that was the beginning of my story. And I came into the company as an individual contributor to the company, Ryan Smith, who is the co founder of the company. He and Jared Smith had started the company and I was going to partner up with them and help them to build the next major chapters of this company. And so effectively I said, look, let's partner up. We moved from Washington to Utah. We went all in. And that was the beginning of the story. So I'll pause there, Julia, because you can keep me going.

There's so many things within that story that I would love to just explore with you. But for the folks who are watching, I imagine a lot of them are probably building new categories as well. And I found that part to be particularly interesting because it's almost like you need to kind of articulate this unarticulated need in the market. So can we explore what it's like building a new category and then when you do build a new category that go to market strategy that goes along with it. Would love to kind of hear more from you in that area.

Yeah. What's interesting about category creation if you sort of step back and say, like, what are we talking about when we say category first off? Right. Well, everyone should sort of, whoever's in this session should just reflect on a core product that you love that has sort of just changed the way that you do things. And frankly, every product, every service that we love exists because there was a legendary company that had a unique insight about an unsolved problem. Right. And they said, like, look, we're not going to go and follow the pattern that was there created before. They're not going to go read it in an analyst report. But it was about reimagining a new experience. And it changed the way that we all talked about it, frankly, changed the way on how we looked at some dimension of the world that we interact with. A great, great category leading technology or product is one that not only solves the problem, but it's something that creates urgency. It shapes the business models, establishes long term value for the customers and the shareholders that are involved in that area. And to do that, well, that means there's a clear vision. It means there's an unwavering focus on how that product comes to life in the minds of the customer and the people that are participating. Often it's the ecosystem that participates around that. And then it becomes this container in a customer's mind. It's a container in our mind, it becomes the reference point. Right. I think the iPhone is a very simple, good example of that. Right. In terms of how it just redefined the way that people thought about the thing that was called a phone, right? And it became a category unto itself. And some people refer to that as the smartphone category. And one of the other interesting parts of that is that it's not static. A great category, legendary company category, leading legendary company is one that's constantly evolving the definition of that category. And people are enrolled into it and they're long for the journey and they love it, right? Because you know, someone's writing the playbook, they're writing what that picture looks like over time. And so when you look at that, often along with it comes a change in the business model itself and how you get the package of value that's there because you're reimagining it, right? And so that's an important part because sometimes we see incumbent technologies or incumbent companies that come in and they say, hey, well, we're just going to change the brand or the name on something that we're working on. But then the business model hasn't changed, the value unlocked hasn't changed and how people participate in it. One of the things that's interesting about Qualtrics was that not only was the technology system something that changed the way that market research sciences were done and created a software platform kind of like the Google search engine, but designed specifically for human factors understanding people's sentiments, their emotions, their stated, their unstated needs, and then at scale, unlocking the utility of that across many different departments inside companies and organizations. And in doing so reallocating the budgets that were traditionally used for, and I'm talking huge budgets that were used for putting out a study through a market researcher, for example, or for instance, changing the way or the decision making cycle of what it takes to be able to attract customers and better launch a product that might be successful in the market, usually new category leading companies and category leading products end up reallocating or dislocating budgets that may have existed in other pockets and corners. And all of a sudden there's a new budget pool that's been created and everybody kind of starts running towards that market, right? Well, the companies that end up creating the playbook for that market end up getting the advantage because what happens is what's their business model, it's their ecosystem, it's their technology definition. And then everybody else that jumps in usually likes to change the names on what they were doing before, but they're not really structurally positioned to compete in that market. And the customers love that too, because they continue to take advantage of something that's new and something that's different. Right. So that's how to think about this topic around category.

So what I was also hearing in there is you kind of land in one department that can spread throughout an organization and that's what you've talked about your. I know we've talked before about your business models, this kind of land and expand business model when it comes to go to market. Let's talk about that further and some of the nuances that come with that. You all being a B2B company versus some of the nuances when they come to whether it's a B2C company, for example.

Yeah, well first off on that point, B2B versus B2C and how you get into the market over the last call it 10 years, we've seen people like to call it consumerization of it. And there's other terminology. You know, I sort of go like blah to blahdi blah. Here's what matters. The reference point for an employee for what they want to spend their time in with their teams is what they do in the consumer world. Right? When you go on the app store, you're like, I'm going to enroll in this app. I'm going to get going, I'm going to bring my family friends into it. It's got to be frictionless, it's got to be easy to run. It's not. Well, let's wait for what the IT department brings me and I'm going to go and wait for some major centralized decision to be made on how something's going to get standardized inside the company. The disruptive technologies, the real movers and shakers in changing the experiences of people are actually people who have built things for people. And it's relatively easy to be able to enroll into it within the business environment. So in B2B or within the inside of the enterprise and the technology that gets shaped into what you end up spending your time in. Most often than not, what happens is that some team within a company starts to use something and then they spread the word, right? And so the design points are on your platform and your technology usually has to be built to be able to scale at a micro level within a department. Often frankly within a couple of employees or users within a department and then they end up expanding, right? And then one team might use it and then another team in another department might say, hey, we could take advantage of that. So you know, one of the things that's interesting in this is that your go to market has to be set up your sales system, your online sales approach, the way that you end up attracting and acquiring customers digitally. All of these things have to be designed to be able to scale at that micro unit level. But at the same time, you know, to your point about land and expand is that might be the landing point. You have to have the ability to gracefully expand. Not only do other departments, but if someone says, I'd like to be able to standardize within the company, your, your, your go to market engine needs to also accommodate that. And these are really, really, really hard problems. It's easy to talk about it at a surface level. I'm going to set up an inside sales team and they're going to do this thing and that thing and it's going to get running. What's really going on behind the scenes is that you have to be able to partner with customers at the departmental level. You have to have a market engine that allows you to be able to unlo value. But the technology system also has to be built to accommodate that. So I've seen companies that have come in and they're like, they built a technology that's built for an enterprise sale, it's built for a centralized deployment and then they're setting up and standing up an inside sales organization or they're trying to create an online e commerce way and it just falls apart. And it's because the technology itself wasn't built to actually scale at the micro level. And so you have to have those two things working hand in hand with each other. And that's one of the things that's been unique about Qualtrics. And what attracted me to the company is this is a system that allows companies to start to use the platform. And if you're a student, you'll get introduced to Qualtrics in the university system. There's over 2,000 universities around the world that use the system. And they'll leave the university, they'll go into the workforce and they're like, well, that's what we learned in college. So I'm going to pick up and use this tool when I come into the work environment. And then the technology is built in a way where you can unlock and turn on new capability as you need it. But then when an IT leader comes in and says, well, we'd like to standardize the technology also accommodates the ability to quickly scale at a global level, if that's what you want to do, and consolidate point solutions. So those are really important nuances that are in this picture. When people talk about land and expense, if you're building a new company you really got to think about what am I building this for, who is it going to be for, how does this play out over time and how does that actually end up affecting the very architecture of our tech and the very architecture of the go to market system that I'm also building? Those two things need to work hand in hand, depending upon the market you're going after.

Yeah, the nuances are really interesting. It kind of makes me want to bring up the topic of customer success in this context. Like how do you think about your. How do you think about customer success? How do you define it? And what do you find are the most successful attributes at Qualtrics and how you all are able to even use your own data, like in your own process when it comes to your go to market.

Yeah, I mean, first off, it starts with the culture of the company. At the beginning, I talked about how culture has got to be something that you feel just to your soul when you're interacting with people over a period of time. You should see it come through in the products, you should see consistency in it. And for us, we have what we call tacos. So our culture is built on a set of values. Tacos is transparency, being all in, being customer obsessed, operating as one team and being scrappy. Well, at the center of that is customer obsession. It's a customer orientation. The people that we attract into the company, and we have over almost 4,000 people in the company, have a passion and they care like they're owners of the company, but they care about the people that we get to work with on a global level. And people feed off of that. It's like we not only celebrate the short run, we celebrate where we expect to be five years from now with that customer as an example. And that's really, really important because then that nicely connects and dovetails in with one of the parts of our system, which is our customer experience management product line that's built on top of our XM platform. And in a very simple way, at the end of the day, we help customers find and keep their customers for the long run. And we have the ability to predict what's important to people over long periods of time because we help customers to be able to become more personal with their own customers. Not every customer is the same. Some people will react differently depending on how you're running your operation or what product you're building, depending upon the industry that you're in. And so it's a scale problem. Right. Everyone wants to feel like that person that walked into the store and Your name was known, and the person that was at the front desk is there to accommodate whatever you need or your favorite hotel, you know. Hello, Ms. Laroche. It's nice to see you again. We've got everything all set up for you. It doesn't matter what business you're in if it's a business to consumer, business to business center. Everyone wants to feel special, Right? Well, how do you do that at scale? Right. And one of the beautiful things about our technology is we're helping organizations better connect with the hearts and minds of their customers at a level where it's near impossible to do it just with one trying to train an entire workforce. But we're connecting that by looking at all the different dimensions of things that affect what people's expectations are, what the timing of those expectations might be, and then being in a place where you help people to continually kind of not only meet the bar of expectation, but maybe every once in a while, delight and exceed through the product experience, through the service, through the delivery, whatever that might be. Right. And as a result, we help people achieve experience, breakthroughs at scale. And that's what the technology has been building. But a lot of this, everything that we do, goes back to the core of the culture of this company and then how we harness the technology that's been built to allow people to do that.

I really like that Tacos is transparency, all in customer obsession, scrappy ownership. Is that right?

One team. One team.

One team. There you go.

Yeah, one team. One team.

And you mentioned your culture helps you all get into, I guess, be customer obsessed and think about the hearts and minds of your customers. So let's broaden this out. Maybe can we talk about a few use cases, provide some more specific examples of companies that have deployed Qualtrics and have seen results? Let's talk about that.

Yeah, I'll give you several examples. And one of the things that's beautiful about being a part of our company, if we go back to my history, I grew up building tech for tech people, so we would build tech for IT leaders. And ultimately, you had that secondhand view of what actually ultimately happened. And what's cool about Qualtrics is you get to do stuff that directly affects the way the world is being shaped. We get to work with people that are defining new products, people that are owning the customer experience for what's going on in airlines, what's going on at a chemical company, what's going on at a food, consumer goods products company. So, you know, I'll give an example. I'LL call off a few Uber. Every time they launch a new service for riders like UberPOOL, they're meticulous in designing the experience using Qualtrics. You know, they'll figure out which writers want it, how much they should charge, which features matter, how do they improve how the ride went when it took place, what they can do to be able to make it better again. It's different for different people. That's an example of using our technology around the constant ability to not only design the experience, but then always on improvement at the scale of the business. BMW is another example. BMW, for those of you that have experienced the brand or watched the brand, or those of you that might, I might be cruising a BMW, the motto that they have is that they build the ultimate driving machine, right? And they knew that they needed to make the dealership service experience just as incredible as the driving experience for when you're in the car, right? And so what they did is they used Qualtrics to design and continuously improve the entire service experience when you're walking into the dealership. And this had a huge effect and it's had a continued huge effect on higher return purchase rates, right? Because the brand permeates not just the car and what you're doing, but when you walk into the service center and when you don't own all the service centers, how do you create consistency on a global level for that? As an example, Southwest Airlines, another example, an awesome brand. And in particular, over the last year, obviously airlines have been hit hard during the pandemic, but what Southwest Airlines did with Qualtrics is they use Qualtrics to be able to check in regularly with their employees because they know that there's a direct relationship between how the employees feel and what's going on with their feelings. And that's going to directly affect the way that their service experience comes to life for the customer that walks in. So they use Qualtrics to check and regulate their employees on their well being during the pandemic, asking if they're feeling okay, how safe they felt about their job, what they needed to be accommodated with respect to their job, who was getting ppe, et cetera, et cetera. And then they connected that with some of the decisions they were making on the customer journey as well. And so this relationship between what's going on with employees and customer and the ability to use a single system essentially calibrate that. I'll give you one more chobani to one of the best innovators in the food category. You know, it's also interesting. Like they've changed how you think about the yogurt eating experience. Right. And so they, you know, have been releasing new products faster than anyone in that space. They use Qualtrics design specific experiences like packaging flavors, by the way, which vary across different markets, different parts of the world, shaping their advertising with the consumer to make sure that they get it right and then following up and keeping track of what's taking place. And so this is using solicited, unsolicited data. It's important that once you get that data that you're acting on it. Because if you act on it, guess what, you're building a relationship with your fans, effectively with your customers. And it creates this beautiful, virtuous cycle. Like when we love a brand and we're willing to tell the brand what we like and don't like, and the brand does something about it, guess what? We continue to enroll and engage. In fact, we become advocates of that brand. So these are some quick examples, Julie, and there's many, many, many others. We've got over 13,500 customers today using our platform. Wow.

And I also noticed from the latest earnings call just the incredible amount of retention that you all have. So it seems to me like your customers obviously see the value in what you all are providing. And we were talking at the top of this conversation about this huge opportunity in exposure, experience management. I think it's a $60 billion, correct me if I'm wrong, it's a $60 billion total addressable market. Where are we in terms of that market and what you've begun to scratch on its surface? And what is it that really works when it comes to penetrating that tam?

Yeah, interesting data point is one of the things I didn't talk about is the history of Qualtrics. But, you know, we, when I came into the company in 2016, it was a much smaller market. But what we were doing is harnessing this engine that had been built over a decade cloud native system designed, you know, as I use the analogy, it's, you know, it's a high scale, highly configurable platform, somewhat, you know, comparable to some of the world's most disruptive other technologies in other categories like the Google search engine and what that did for search. You've seen Qualtrics do that for experience management, but back then it was still, you know, sort of an eye of what could be possible with this. Well, in 2018, Qualtrics was about to go public and we were acquired by SAP for $8 billion. One of the largest enterprise software tech acquisitions at that time. And the addressable market at that time was $48 billion. Two years later it's about $60 billion. And what's driving that market is that we're seeing, as I talked earlier about categories, we're seeing a reallocation and sort of a dislocation of other categories of how dollars have been spent starting to come together. On the one hand, it's how people end up designing new experiences. So whether it's product ideation, innovation, testing, optimization, consumer research, it's a multibillion dollar space of dollars that are spent in that world. And it's largely consulting oriented on a global level. And what's happening in that space is technology is starting to reshape it. And the reason why is that customers want control of their data. Second, timing and speed matters a ton. And so this idea that you can actually go and connect with a group of customers or understand your market and then be able to ideate faster, launch products more quickly, or maybe change the way that your delivery routes work or the way that operation works and how that affects your customers or how your supply chain is set up, that world is getting rewired and you have to have tech that is actually acting more in a real time nature. And the speed of making decisions really, really matters. The second area that's actually playing in is this idea of what you would think of as ongoing improvement and engagement with customers. If you think about that world for the last 20 years, if you look at the evolution of different software spaces, you've had CRM. What's CRM? CRM is a way for a sales rep to put information in around how they think about what their customers want to go do next or what's going on with their customers and what you're going to sell them next. Okay, Marketing automation systems, right? That's about putting in at scale a bunch of data, a bunch of contacts, and then running a campaign and getting people to opt into it. Right? And hopefully you've been able to tune it in given what you've learned about previous opt in patterns and what works, what doesn't, right. But you know, so it's a, it's a, it's a way of sort of trying to figure out what people are saying, you know, and what they might be willing to do or not do given historical behavior patterns. Then there's, you know, another sort of small field set of companies out there that are saying like, look, once you've sold something to a customer, maybe you can do a better job of care and handling them. You could give, you know, set up a ticket if there's a problem and they'll call into the call center and you can end up triaging their issues. There's customer success tools that are out there. The theme in all of this is everybody is reacting and they're trying to guess what's taking place. And what we're seeing is there's a new generation that's underway, which is that you become much more proactive given information that customers will voluntarily tell you, voluntarily tell you about what matters to them. Here's my preferences, here's my interests in the moment. This is what worked, here's what didn't work. Please use that information to do a better job in serving me as a customer. Figure it out in the way that you run your product organization, the way that you run your customer organization, whatever it is, right. The speed in which you actually end up enabling continuous improvement is going to reshape the way that we think about analytics, the way that we think about relationship management. You know, and, and, and, and I think that, you know, you're seeing a collision path between this area of what we think about as experience design and experience improvement. And you know, there's a role that we're playing in how we help organizations then use the tools that they've already invested in. So if you have CRM system, they'll bring Qualtrics right alongside that and they'll connect it to be able to make better decision making and at the same time drive action across an entire organization. They'll connect it with the ticketing systems, they'll connect it with the workflow systems that a company has. But what's going on at that bigger picture and what's driving the larger addressable market are these bigger factors, those factors that I just talked about, which is the world shaping to be one where the customer or the human being just wants to emote and have something done with that and can you do it at scale? And if you do, that's what's going to determine the leaders from the followers in respective markets or disruptors and reshaping the markets that they're in.

And that's the experience transformation we were talking about. And I thought it was interesting, just the importance of the timing and the speed, obviously problems that you all have been able to solve for allowing for companies to be more proactive in the last year. I just wonder how much Covid related innovation has been accelerated and what you all are seeing at Qualtrics in terms of how the data is helping your customers drive their accelerated innovation agendas. Have you been able to see any sort of insights in that area that. I know we did talk about some examples earlier, but any other insights that you could break out as it relates to your clients and their innovation agendas being accelerated because of COVID and what they're seeing with your own data?

Yeah, this ties a little bit back to what we were chatting about earlier, which is if you look at digital transformation or, you know, McKinsey has said that there's been like a seven plus year acceleration of digital transformation. And you know, obviously it's because technology has played a keen role in how, you know, companies can connect with their customers and employees when you're not all in the same physical space. Right. And it doesn't matter what industry you're in, where you are on the planet almost. It's, um, it's, it's, it's just been, you know, an acceleration of saying, like, look, how are we going to use tech to do a better job in the way that we operate? But in the middle of that is how do you use technology to change the experience that you're creating? It's not just, you know, efficiency or connecting, it's like, well, what, okay, so now you can change the way that you do business. It's the way, you know, the way that you end up presenting your products. You can actually change up how you interact with customers differently. You know, I'll give one example, you know, what you might think of not top of mind, first industry to become significantly technology oriented, but they're leading big time, is what's happening in cruise lines. Royal Caribbean example of a customer. There's very few industries obviously that got hammered like travel and hospitality and cruise lines. And one of the interesting things about Royal Caribbean is they didn't have months to figure out what they're going to go do because their business went from about 100% occupancy to zero and they had to completely rewrite their playbook. It's like, what are we going to do? Everything's changing and you can't run the same play. You can't continue to say, well, it's just going to keep running the same routes and engage with our customers in the same way. And so what they did is they chose to lean in and they invested to better understand how their customers were thinking, how they were feeling. And then they acted on the data with the Qualtix platform. They focused in on like, what do we really need to do to be able to design the right cruising experience for people. How does it need to shape and adapt to different conditions and expectations, which often meant connect with hearts and minds of their cruisers and what those customers willing to put their money to. And then using the data that they had, they were able to build out a plan that helped customers to come back safely with new experiences that attracted their customers. And they were doing the same thing with employees because obviously they're a critical stakeholder in that. Look, if you pop up and look at the bigger picture, it doesn't matter what industry you're in, people are rewriting the playbook that they're in. And the first place that starts with is employees. If you can't engage your employees productively and effectively, you're going to have a really hard time maintaining your culture or maybe properly adapting your culture and reshaping it. Given the new reality of what it's going to take for you to be able to keep your talent, attract the talent that you want, the places that you're going to end up operating in. And there's a huge role of technology and how that gets redefined. And so one of the first things that we're seeing companies working with right now is like you're rewriting the playbook realm, the way that they create the work experience for their employees and their workforce and then that then affects the way that they'll work with their customers no matter what industry that they're in. What's the experience for digital? What's the experience for mixed mode, hybrid, flexible working environments? What's the physical space going to be like? Right. And so, you know, Qualtrics, our platform is playing a beautiful role in helping people to figure that part out. In addition to, you know, dealing with some of the other issues that some organizations, industries have depending on the market that they're in. So that's what we see happening.

Yeah. And certainly no one had a pandemic playbook and we are rewriting it. And you bring up some really important points about future of work. Any specifics? I mean, you don't have to name names or anything, but what do you kind of seem to broad based how people want to work in the future. Is there a consensus out there? Are things pretty mixed when it comes to the future of work. What are you gleaning from the data?

Well, I would say across, you know, this is just customers that are using our platform across industries, you know, people are sort of come to the reality that the world has changed. It's not going to go back to the old way of doing things, there is a new playbook that's being written within every single company and industry. They're just the different stages perhaps in that process. And what we're finding is people realize that when you go all digital, that there are benefits that you end up picking up with people. And some things are basic, like you end up using your time more productively or effectively by reducing commute times and spending in some places an hour or an hour and a half behind the wheel. And the stress that that might result in, depending upon where you're driving. People have reused that time sometimes to just, you know, be able to live their lives better. Others are using it to be more productive in what they're doing with work. But the other thing that what we're also finding is when you're in the digital experience, not only can you be more productive, but people also end up with a better seat at the table. You know, when you're in a mixed mode hybrid world where maybe some people are remote calling into a conference room, or even when you're in a physical space and you go into a conference room that's got a long conference table, it's not so easy to actually have every voice heard. You have people, we all have different backgrounds, we all communicate differently. People have different comfort levels. But most of us are working with people that are very talented, people that have something to offer to the organization they're working in. Well, in the digital world, what's interesting is we all end up with little square pixel and there's an opportunity to engage people more evenly. Everybody gets the same seat at the table, so to speak. And the other thing that's interesting is you're in this multimodal experience, right? Where you've got the chat experience going, you've got video, you've got sharing. There's very few meetings that I'm in where you're having the conversation, you're debating or something, and then somebody else is typing. In chat, there's a side conversation going on and it's really cool because you're processing a lot more and you're hearing different voices. Some people like to express themselves in a written format, right? And so what we're finding is little takeaways like this that have actually contributed to results. Performance. Coming up with new ideas are things that people don't want that to go away. And yet there's also another dimension which you can't replicate fully when you're all digital all the time. Say, for example, the emotional connection that you have with people, what that does for stimulating learning and what it does for stimulating creativity. The physical space has a role. And so what we see people doing is they're saying, well, what is the role of what happens when we come together into the physical environment? What modes are we in when we're there? And then how do you bring out the best of digital and physical workspaces? And how can you be purposeful, how can you be intentional about the different modes that you're in and also the mixed modes that you might have? And how does that then actually tie into what you want your culture to be? Right, so Qualtrics is an example. You know, we absolutely believe that we're going to be operating in a flexible work environment, but at the same time, we deeply believe that just as important to be in the physical space together during certain points in time weekly, for example, for global all hands. But you got to have the right digital tools to accommodate that as well. And so there's a huge opportunity here as well to just change the experience of what work is like. And I think it's going to touch every dimension of both the physical world, the digital world, and also how the digital tools also end up accommodating what we're doing in that physical environment. And then of course, these things shape the way that we interact with our customers as well. Right. So that's what we're seeing.

Zig, you keep bringing up culture, and I could tell culture is really important to you. It really matters. And it was key to you coming over from Microsoft to Qualtrics. And now that you're the CEO, I want to ask you, because you did mention the relationship with the founders, and the founders being really critical to you making the decision to come over, talk to us about your relationship with the founders and going from this company, going from being founder led to no longer being founder led there, I suppose, executive chairman for Ryan. How do you kind of continue the culture or kind of rethink the culture if that's something that comes up? I would love to kind of explore the relationship and the transition when you go from being founder led.

Yeah, I love that question. I mean, look, simply said, Ryan and I operate in a two in a box model. We have done that since I joined the company. I mean, sure, we have our titles and all of that, but there's a relationship that goes really deep. It's built on trust. It's built on the fact that we both add value differently, which is a good thing. And one of the values of Tacos is being all in. And you can't do that if you're not willing to be all in on what you're doing. Ryan is all in as it gets. He's been doing this for 20 plus years. I came from Microsoft and there was many opportunities to jump off the train and go do other stuff with opportunities that came at me all the time. But when you get all in, you start to act like you're the owner, and I mean deep owner of the company. It's your building, it's your product, it's your customers you're responsible for. It's the livelihood of the employees you're responsible for. It's the livelihood of your customers that you feel responsible for. And for anybody that's in this meeting, if you think, just think about like, you know, your own business, if you're running your own business, or if you've watched someone that owns their own business, no matter what size it is, an owner acts differently, right? And they care about everything. They care about what the, you know, whether the windows are clean, there's something broken, they don't care what job they have, they're figuring out how to fix it. And you know, for me and Ryan, we both share in that perspective, but we also expect that of our employees as well. And, you know, they're not employees, they're owners. Right? And that's how we think about what we do. And so, you know, this is not easy to do that, especially as you grow as a company. But if you're doing it, then you're going to spend the right time on how you build people, how you take the care and intention about what you're doing with your products, the way you partner with your customers and you don't take shortcuts. It's a really important part. I've seen so many companies in tech. People will start stuff and they'll take their shortcuts. The fastest way to be able to go and get an exit, or the fastest way to be able to go and get the next funding round and think that that's actually the sort of feat of achievement. When you think like an owner, you care about what things are going to look like five years from now and what things will look like ten years from now. You won't take shortcuts, you'll take your hits. In the meantime, perhaps the things that maybe aren't moving as fast, or perhaps things that you maybe aren't patient about, but in the long run, things end up playing out differently. And this is a really deep part of how we Think about what we're building here. We like to think about this company as something that has high performance, significant opportunity for our customers and for our employees that are part of the journey and the mission of what we do and how we're building it. But wouldn't it be really cool if, like, you look out 15 years from now, 20 years from now, and you have, like, your friends, kids are working at this, maybe your own kids are working at this company? Right. Because you built it right and it did something that people deeply care about and that's the way that we roll. That's what we've been doing. And it affects our operating model.

I like that. Think like owners. We have a question in the queue, so I'll go ahead and ask that from Al Nazarelli. He asks, what role do market research service providers play? Does Qualtrics work directly with companies only or also with market research providers? And if the latter, what value can Qualtrics add to the market research practice?

Yeah, love that question, Al. Very insightful question. So what's happening is most market research provider companies are moving over to our platform and they're bringing their intellectual property, their methodology, their playbooks onto our system. And that's a really cool thing because we end up partnering with companies on advancing our tool set. They end up leveraging our tool sets, our instruments in our platform to optimize their methodology. And what it does for them is it actually allows them to go back to their customers and say, like, look, we're going to turn what we've been doing with you into something that's much more timely in nature, is more scalable and repeatable. Because it's not just, I'm going to hand you a report and give you the results of an analysis that gets handed to a department. But rather now we can come in and make that insight researcher within that company a hero to other stakeholders in that company. Because now this researcher, agency or partner can come in and say, like, look, we're going to do some things here that now the buyer can use to change the way that they operate inside of a company. And it's all based on Qualtrics. Well, that opens up a business model opportunity also for the research agency companies, because they can come in and say, okay, well, we will bring in a managed service. We'll bring in a subscription offering on top of the Qualtrics platform. We'll innovate new solutions that are focused on certain business problems. We want to be able to improve loyalty. We want to be able to turn on Much more of a real time approach to. So it's not static, but it becomes an ever living breathing system. Qualtrics is the world's largest host of MPS programs. We have over 150,000 NPS programs running on our system and they're brought in by experts who have set them up in the first place, but then they become more real time and actionable in the way that they end up being operated within companies. So this is what contributes to an ecosystem that's building around the Qualtrics experience management platform. And there's a whole network of partners, it's called the Qualtex partner network. And they're, you know, part of that network and part of that ecosystem are people who are amazing innovators coming from the research side of the world. And now they're using tech to optimize and give them better positions within the markets that they're in.

I like that you've gotten some nice comments in the chat from some folks, including Elias, who liked your Tacos acronym and Al also liked your answer there. Zig, we have a couple more minutes. So I want to go back to culture because seems like an area that it's kind of under discussed, to be honest. And it's one that's probably the most important when it comes to companies. How do you all use your own data from, you know, experience management to drive culture? And what do you think when it comes to culture? What is the most important thing when it comes to making sure it stays intact so you don't have cracks in your culture? And when you do find that there are moments of, I think maybe comes up inevitably in every company when you find moments when people might not be happy, how do you kind of repair that or repair trust? I don't know if that's ever something that's come up, but I just imagine culture being such a critical part to business. So how do you use your own data to inform it, drive it, that sort of thing?

You know, trust is something that you get to earn over time with people. You know, if you think about, you know, our personal relationships in life, right. Trust gets broken or gets built depending upon our behavior over long periods of time. Right. And behavior is a function of the actions that you've taken. And so how we act, how we engage, either you're filling the cup or you're emptying the cup, right. You just constantly. It's something that we have an opportunity to do every single day. Well, if you think about this from an organization perspective and you think about a team or an employee base. There are things that are on people's minds, beliefs, emotions, stuff that might be happening in their community. There may be injustices that they're seeing within their community. There may be a relationship they have with a manager that may not be a good manager, might be a great manager. And these are powerful inputs of data that if you act on it in a timely manner, it creates what we think of as a digital open door. It's like in the old world where like, yeah, yeah, I've got an open door policy, come into my office, talk to me anytime you want. Well, it's a really hard thing to do as things scale and you've got other tools and input mechanisms. So what we do inside our own company and what customers do with our platform is they enable everything I just described using our employee experience system. And it's a set of products, a whole product portfolio. It's the market leading platform today that has allowed companies and HR leaders and leaders of teams around the world, especially at large companies, to come in and use our system to tap into the hearts and minds of their employees and create trust, build relationships, make it something that's much more a part of the, call it ongoing rhythm and heartbeat of how an organization operates. And it's different too, depending upon where you are in a team and where you are in your tenure and what your milestone might be in your career. Maybe you just got promoted and you're working on your next gig or you're working on a really hard project and stuff ain't going really well and you need help and no one would know this. Maybe your manager might know, but you'd be a hard problem to actually end up affecting at scale. If you've got, let's say 500 people that are feeling the same thing. And so building trust at scale through connecting with people, especially hearts and minds of people and shaping the employee experience to create a differentiating advantage is what we help people do. So that's one important answer to your question. But I want to hit another thing which is like just looking at Qualtrics, there's a bar that you end up setting around how you want to maintain what you're doing as you grow. You know, when I joined the company, we're about 1100 people and the company had already been growing very quickly. I think they're going at 50% a year already at that point. Today we're 4,000 employees, we're 30 different offices around the world and we continue to be a high growth company and we fortunately are hiring some of the best of the best of talent from different industries. And people want to be a part of what we're doing. But you have to maintain hiring practices where you hold the bar. That bar is so easy to deviate from as you expand and it's so easy to lose sight of, you know, the core principles that got you to where you are when you were a lot smaller. And so how do you measure that? How do you test that as you're looking at new people that you might end up hiring? But then when you brought people in, how do you maintain the empowerment and trust that you end up building with people and then have them live the culture as well? Right. We're scrappy culture. That means frugality matters. That means speed matters. We're also about one team. It's not about one person's ego. Right. It's humility matters as well. Empathy matters in the way that we work with customers. And being hungry matters. Right. That's part of being, you know, being scrappy as well. And so what are the things that you see with the people that are coming into the company that at the end of the day, it's back to what we were talking about is like they're going to be owners. You know, like if you're an owner, you're going to see characteristics like that of people. And then do people spend their time more on what's going on inside the company or what's going on outside the company? I like that outside in focused people as opposed to inward focused people. Inward focused people they care about, like who said what about whom? Inside of an organization or like building more process gobbledygook inside of a company, Outward focused, outside, in focused people. They care about what it takes to be able to drive action that supports a customer. And that's it. That's all they care about. And then they will get and they'll mow down anything that gets in the way of that in order to support customers and do what's right. These are elements that you try to keep intact as you're growing and how you end up executing that Go along with the first part, which is the experience.

Well, we have about 90 seconds and that one might answer this question, but Huda would like to know, how would you determine that a company is successful with developing a productive culture?

Well, at the end of the day, we're all measured by the results. Right. And so, you know, you just think about that is you say, well, what's happening with the rate of growth of the customers are customers expanding, doing more business. And then you have double click, double click on that. You've got supporting metrics. Those companies that use OKRs. We do. You know, you'll look at, you know, for example, productivity metrics that might exist inside of an engineering organization. Usage is a really big one. You can talk about productivity all day long and perhaps end up rewarding activity that doesn't yield the result because activity doesn't matter as much as the outcome matters. Measuring usage, usage, intensity, understanding the why people are doing what they're doing tells you if you're being productive and whether you're actually going to end up moving the line or the bar that the public market, if your public company expects from you, which are what I would call lagging indicators, it's your revenue growth and your expansion growth. The leading indicators are, are you doing stuff that matters? Usually you'll find that in your usage behind the products that you're delivering. If you're in the tech space. If you're not in the tech space, there's other similar supportive metrics.

Well, Zig Sarafan, CEO of Qualtrics, thank you so much for this really awesome and insightful discussion. And for our viewers, our audience today, thank you so much as well for watching. I hope that was an informative session. It certainly was from my vantage point. So thank you to everyone for joining us. And thank you to Saster as well for hosting us today.

Julia, thank you very much as well. And thanks everyone for joining and for the great questions. We'll see you again.