In a year filled with tech IPOs, business-software company Medallia stands out in at least one way: it's one of the oldest startups to go public in 2019. Husband-and-wife team Amy Pressman and Borge Hald co-founded Medallia in San Mateo, California, in 2000 to help businesses manage their customer-service data, and they bootstrapped the company for more than a decade. Last year, then-CEO Hald decided to replace himself with Leslie Stretch, an enterprise software exec with experience running a public company. On July 19, Medallia hit a new milestone in its 19-year success story: the company went public on the New York Stock Exchange, raising $326 million at a $2.5 billion valuation. Stretch spoke with Inc. on the day of the IPO to talk about the journey.
1. This is a banner year for tech IPOs. For Medallia, is that a blessing or a curse?
We couldn't time the market. We didn't know that when we started planning to do this 18 months ago. You never know, actually--I didn't even know last night. But I knew that we would have investors understand and value the story, and I knew our customers would love the fact that we were independent, and we didn't have to ask for anybody's permission to innovate for them. I don't know if it's the year of the tech IPO. If it wasn't, we would still be going out this July because it was just the right time for Medallia.
2. Medallia started with a $16-$18 range, then priced shares at $21. The stock opened even higher, at $34. Do you feel like you left money on the table?
I'm fine--I can't control it. My goal was to set an interesting price to get people in, and a fair market price, and at the same time meet our goal in terms of the proceeds we were going to raise. I told everybody in the company: "Don't worry about how the price moves--it doesn't matter. What matters is, did we raise the proceeds from the right investors? And will they support us in the future?" That's the key, and I feel we achieved that.
3. What was the most surprising thing that happened on Medallia's first day as a public company?
We had 300 people here from the company. They were having a ball, and I really enjoyed that. And then I broke the hammer on the trading bell--the head flew off when we hit the bell for the first time--so that was fun. Everyone burst out laughing, it was great.
4. How'd you sleep last night?
I slept like a log. In fact, I went to bed at 9:45 pm because I was tired. I woke up at 6 am. I don't get into a sweat--especially not on things that I can't control. There's no point worrying about things you can't control. What's going to happen in the market? What's going to happen politically? I'm not worried about it.
I do worry about my children and I worry about the team that I work with, but it's important to get a good night's rest. Divert yourself, read a book. That's what I do. I watch a British drama, The Terror--it's pretty good. It's not all on, all the time.
5. What's next for Medallia? What's the future of customer-service software?
Voice is a huge thing for us. Soon, we will just speak our feedback. It will just take us a few moments to describe an experience instead of filling in a survey. That's the future. The epiphany of the founders was, if we can have a communications platform that is secure and works at scale and keeps people's information private, [then] we'd have a real offer. That's the vision that we're building on. We have 22 patents around the platform. We're in a unique leadership position. We're going to use this IPO step to expand.
6. What advice do you have for startups considering an IPO?
Don't be afraid of the public process, and follow your gut and instinct on innovation and ideas. Don't ever copy competitors. When you follow competitors, the best you can be is as good as them. Meanwhile, the market may move away. Be persistent, it takes time. Medallia has been working at this for a long time. Silicon Valley is full of 30-year-overnight-successes.