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LAS VEGAS -- This week, analytics vendor ThoughtSpot hosted Beyond 2022, its annual user conference, for the first time in person since 2019.
And just as the entire world has undergone radical change over the past few years, so too has ThoughtSpot.
At the time that ThoughtSpot, founded in 2012 and based in Sunnyvale, Calif., hosted Beyond in Dallas in November 2019, its entire customer base was on premises. Now, the vendor's platform is cloud first, and three-quarters of its annual recurring revenue comes from cloud customers.
Back in November 2019, ThoughtSpot only served the needs of enterprises, but because of its transition to the cloud, it now boasts a roster of small and medium-sized businesses as customers. And at Beyond on Tuesday, it unveiled new editions at low, controlled costs to serve the needs of those SMBs.
The new Team Edition costs a flat fee of $95 per month for a single group of unlimited users. The Pro Edition starts at $2,500 per month for up to five user groups with an unlimited number of users within those groups, although users could be charged more based on consumption. And a special version of the Pro Edition for startups, nonprofits and educational institutions with fewer than 100 people and less than $10 million in annual revenue costs a flat fee of $2,500 per month.
Meanwhile, after raising $248 million in venture capital funding in 2019 and $100 million more in 2021, ThoughtSpot has been positioning itself for a potential initial public stock offering.
In an interview shortly after he delivered the keynote address before a ballroom full of people at Beyond 2022, ThoughtSpot CEO Sudheesh Nair discussed all that has changed since he last stood before an audience of the vendor's customers.
In addition, he spoke about the new capabilities unveiled during Beyond, the value of new partnerships and the resulting technology integrations, trends that are influencing analytics, and the possibility of an eventual IPO after the market again becomes favorable.
How gratifying is it, after almost three years, to be hosting ThoughtSpot Beyond in person rather than online?
Sudheesh Nair: The most gratifying thing -- and I joked about this onstage during the keynote address -- is that customers are actually happy to see us. We all want to be wanted, but the reality is that anytime a vendor reaches out to a customer, until you explain the value of what makes you useful to them, it's a one-way transaction. You just appear like a nuisance. And that has flipped. It is really gratifying that we are wanted. Customers want the meeting. It's partly because of COVID-19 the past two years, and it's partly the stress of digital transformation that's been building up across all companies that was accelerated by COVID-19.
How has ThoughtSpot changed since Beyond was last in person?
Nair: There are a number of different ways. The first one I'd say is that the last time we met in person, 100% of our business was on premises. Now, 75% of our annual recurring revenue is from the cloud. That's a huge transformation right there, and that covers all the transformation underneath.
Sudheesh NairCEO, ThoughtSpot
We used to put out two releases per year, and now we're releasing software every month. We didn't have a mobile app in 2019, and now we have a mobile app that is used by most customers. SpotIQ, which is our AI engine, used to be a separate product that was not finding momentum, and now AI powers everything inside the product. The company was mostly based in the U.S. with respect to development, and now we have more than 260 people in India.
Has your customer profile changed over that time?
Nair: The entire business transformed as part of our cloud transition, but inside the company, we transitioned our go-to-market. We used to serve only the largest of large companies. Our average deal size was $270,000 two years ago, and [Tuesday] we announced a product that is $95 per month. That shows the breadth of transformation we've gone through. Two years ago, I don't think that would have been possible to imagine ThoughtSpot going from hundreds of thousands of dollars to hundreds of dollars.
What led to the decision to target small and medium-sized customers in addition to Fortune 500 companies?
Nair: When the architecture was first built and data had to be loaded into ThoughtSpot, it wasn't accessible for anyone other than large customers. But when we moved to the cloud, we removed the friction from data. Now, we can do what we wanted, which is to make the world more fact-driven, meaning [working with companies of any size]. We always wanted to go there, but were unable to because the product wasn't built for it. As the product transitioned, we were able to change everything. Now, anyone can swipe a credit card with peace of mind knowing that the most they're going to spend is $95 per month. That would not have been possible before. The need was there, but we just didn't have the product to go after the market. Now that the product has changed, we're going everywhere.
When ThoughtSpot first emerged from stealth in 2015, it differentiated itself with its natural language search capabilities. Other vendors have added similar capabilities since, so how does ThoughtSpot stand out now?
Nair: The market sort of made ThoughtSpot out to be the natural language search company, but we never were that. We were a company of scale and complexity. And what I mean by that is that there are three kinds of complexities when it comes to data.
The first is pure scale -- can you handle billions, if not trillions, of rows of data? Verizon spoke [during the keynote] about 10,000 users and massive scale, so that's a clear differentiation. Second, you don't have to have a lot of data to get value from ThoughtSpot because we are explicitly focused on business users. For every one data analyst, there are 600 business users out there, which means that a product built from the beginning to deliver a consumerlike business experience to business users is a big differentiator. And third, we are built for the cloud now in the sense that the entire architecture is built for the cloud as opposed to being built for data on the desktop. Being able to go from zero data to search within a matter of seconds is a fundamental differentiator.
If you are on the cloud, if you help business users who are looking for interactive ad hoc search or if you have a large amount of data, ThoughtSpot is differentiated.
In addition to unveiling a host of new capabilities, ThoughtSpot also unveiled a slew of new integrations and connectors -- why partner with all those other companies?
Nair: We want to keep reducing the barrier for entry to ThoughtSpot. That's why a partnership with a company like DBT Labs is critical. We might make it easy for customers to access data through search, but for the search to make sense, modeling needs to be done. And that is why the biggest change that customers saw in the keynote address was how many ecosystem stories we talked about. At the last Beyond in Dallas, we were talking about ThoughtSpot's story. [Tuesday], we were talking about Snowflake and Databricks and DBT and Matillion and Supermetrics and others. We want to offer customers a cloud-native ecosystem that works zero-to-60 in a matter of seconds by interacting through APIs through other machines.
Are there one or two new capabilities ThoughtSpot unveiled during Beyond that stand out to you as the most beneficial for customers?
Nair: Monitor -- which automatically alerts users to changes in their key performance indicators as they happen -- to me, is the most significant. People don't come to ThoughtSpot to ask questions, even though we have search. People come to ThoughtSpot to find answers. Why should we make users ask questions if we can't provide them answers before they ask?
So I want to drive the company to the point where asking questions is the second thing [customers] do, as opposed to the first thing. When someone logs into ThoughtSpot, I want it to know the person, know what they're trying to do and tell them what they need to know. And then, based on that answer, the person may have some qualifying to do with a follow-up question. But then the next time they log in, I want ThoughtSpot to cover the ground on that as well.
Monitor, to me, is where ThoughtSpot needs to be. ThoughtSpot has done a good job of answering questions, but tomorrow I want ThoughtSpot to make sure a person doesn't even have to ask the question because what they need to know will come to them before they ask, where they need it.
Speaking of tomorrow, if today at Beyond was ThoughtSpot unveiling Monitor and other new capabilities, new pricing and partnerships, what comes next?
Nair: Directionally, on the app side, I want us to lower the barrier for entry with respect to interactivity. We don't want people to ask questions. We don't want you to log into ThoughtSpot and ask us questions. On the back end, data warehouses are powerful, but there is still data that is sitting in log files and Amazon S3 [Simple Storage Service] and other places, so we're asking whether it's possible to make that data available for anyone, wherever they use data. If we can bring that experience to all data and not just cloud data that is sitting in data warehouses, then we lower the barrier even more. That, directionally, is the right way to go.
Looking beyond ThoughtSpot, what are some significant analytics trends?
Nair: There is a passion for democratizing and educating people on data, and I think storytelling on data is going to be very powerful. Numbers are still scary for most people, so they make decisions and then find data that justifies their decision. That's changing now because there is data everywhere, and tools like ThoughtSpot are coming in and democratizing data. The next challenge is putting context behind the data so that the system can use natural language to explain the story behind the numbers. We're making baby steps there. But if numbers are wrapped with words and context and stories, I think we will exponentially increase the number of people who interact with data without fear. To me, that is a trend I'm starting to see, but it won't be just us.
Right now the stock market is unfavorable for initial public stock offerings -- does that affect ThoughtSpot's plan to potentially go public?
Nair: We were pretty smart about timing our last funding round, and we're lucky to be in a strong position with respect to cash and valuation. Right now, with the market being unfavorable, it's not a good time to go public. But we weren't planning to go public at this time because we still have more work to do, so it doesn't change anything yet. In the next few quarters, as we build predictable business and become partner leveraged, which will help improve all our metrics, we will come to a point where we're ready to take the company public -- and hopefully the macro situation will have improved. If not, we'll revisit plans, but right now I'm not focused on it.
Entrepreneurs, operators -- the people doing the work -- don't have the luxury of swinging back and forth based on the market, so what I tell my company is to ignore the noise, focus on the customers, focus on the fundamentals and make sure we're building a company that is fiscally responsible. We invested a lot in product and engineering the last two years, and now we're investing in go-to-market, and that will be focused on productivity and partnerships.
Editor's note: This Q&A has been edited for clarity and conciseness.