SaaS Interviews with CEOs, Startups, Founders
G2 on Track to Break $100m ARR 2022, $60m+ Today at $1.1b Valuation
25 Oct 2021
Chapter 1: When is G2 expected to break $100 million in ARR?
When do you break $100 million in AOR? Can it be next year, you think, or you need until 2023? Yes. It can be next year.
Yeah. Our goal is to break that next year.
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all of these podcast interviews. Check it out right now at getlatka.com. Hey folks, my guest today is Godard Abel.
He's the CEO of G2.com, the leading business software review website and marketplace, which he co-founded in 2012. The company has over 400 global employees and has raised $257 million in capital, recently became a unicorn with a $1.1 billion valuation. Godard, are you ready to take us to the top? Yes. quite the growth over the past couple of years.
And I was holding out because when we were at SaaSTalk in 2019, it was incredible the metrics you shared. You said you passed 40 million in AR. And I said, you know what? I want to wait until he doubles to have him back on. You're close to it. I feel like you're really close. Maybe not at 80 yet, but you're very close. But congrats on the round. Thank you.
Tell me a little bit more about where you're seeing customers get excited today. Is it still the traditional review product or are there other things, other products you're really excited about?
And I think it has gone beyond reviews. And I think when we started, we said it was going to be Yelp for business software. And I think that has come to life pretty well in a lot of categories. But I think now we're also saying G2 is going to become a software marketplace and where people can not only discover apps, read reviews, get insights, but they can even buy software.
And so we're starting to experiment with something we call G2 Deals. where vendors can also make great offers to the buyers shopping on G2.com and offer them special deals, special incentives to buy right now. And obviously, that's great for the software buyer who gets a better deal. And nobody reads reviews for fun, I would like to say. You read them because you want to buy something.
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Chapter 2: What strategies is G2 implementing to grow their customer base?
We just kind of forgot to shut them down. And then two, also for our security, our IT team, there's concerns. Do we even know what all these apps are? Are there security holes? Are they not yet in Okta? So there's a lot of value there, but it's a very different persona. And that's why it's also a very, very different sale.
And I think, like I said, today, our revenue model has been all about the solar solutions.
Chapter 3: How is G2 evolving from a review site to a software marketplace?
But I think my 10-year vision is certainly that the buyer solution becomes even bigger because a TAM there is literally every company in the world. More and more SaaS, more and more cloud. And I think everyone wants to make better sense of it. And it has this great synergy to G2 Marketplace, which is sort of the ultimate place to benchmark your stack.
And so our vision with Track is that we can not just help you figure out one app, which is kind of like the original G2.com. You can go read reviews, see if that's the best app in that category. But we can systemically with Track analyze your whole stack and kind of out of the box using our data, our benchmarks, kind of say, hey, here's where your stack's good.
Maybe we're going to use some holes, give them some recommendations for additional products they might want. And we also tell them, hey, here's some redundant apps. Do you really need five email marketing apps? You could probably narrow it down to two or three. So that's our dream vision there with Track.
And is Track right now a free product? We give you our data and then you recommend ways to save money on software, or is that also a paid tool that CIOs and CFOs are paying for to do financial planning or things of that nature?
Most of it's free today. It's a premium. There's a premium version, but I think that one we're still, I'd say, learning on and improving the product before we really take it to prime time. But it is really exciting. You could try it for free, really any company. The way it works is you just hook it into your financial system, like if you're running Impact or NetSuite.
just putting your NetSuite credentials. We automatically parse your general ledger data, figure out which of your spend is actually on SaaS, which apps would be categorized at all based on taxonomy. We already have on g2.com because we categorize over 100,000 apps into 2000 categories. And so then we can tell you, okay, yes, you do have 5B marketing apps.
And we also will have APIs to systems like Okta. So then we can also quickly tell the CIO, CFOA, by the way, which of those apps are you actually using? And usually there's some low-hanging fruit in savings out of the 200 apps you're running. 10 of them nobody's logged into in three months. Okay, awesome. There's some money we can save there.
And then on the other side, we can say, by the way, here's 10 new apps that companies like yours and your industry, your size, are having a lot of success with based on their feedback on gg.com, but you're not yet running them. And by the way, here's a special offer from that vendor to get on board now. And that's how we can really close the marketplace loop as well.
closing the loop on the other side, right? So when someone like Gong or the CMO at Gong pays for your marketing solutions at G2, is that sort of average monthly ARPU still sort of in the $1,000 to $2,000 a month range across the 2,500 customers?
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Chapter 4: What insights can G2 provide about customer software usage?
But if you want to use all this great customer voice driven content from G2 on your own website and your own marketing campaigns, then you pay an additional license for the content. And the content and buyer intent actually work really well together because then you can target that person. Like back in my Steelbreak days, I could target that CPQ buyer
when I know they're shopping and then figure I could hit them with content. Here's why Steelbrick is better than Aptus. And it's not my rep's claim. This is based on hundreds of real customer reviews. And we find we partner with LinkedIn, for example, LinkedIn match audiences.
But then if you target the company that as they're shopping on LinkedIn, target the right personas, like for CPT, you'd be the head of sales ops. And you hit them with content that says, hey, Here's what your peers are having success with in CPQ. Guess what? That converts really well. And so it really helps that vendor then drive conversion and drive growth. So that's the marketing solutions.
Those are three compelling reasons to pay G2 more money. Makes sense to me. Can I do the math here? 2,500 customers at a $2,000 ARPU. It puts you guys at about $5 million a month in revenue. Are you guys north of that today?
We are north of that.
When do you break $100 million in AOR? Can it be next year, you think, or you need until 2023? Yes. It can be next year.
Yeah. Our goal is to break that next year.
Is that a comfortable goal or it's a little uncomfortable, a little stretch goal?
Well, if you ask me, it's comfortable. If you ask our CEO, it is too.
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Chapter 5: What are the main differences between G2 Marketing Solutions and G2 Track?
Yeah. But I mean, that's crazy. I mean, many people would argue, I would argue Snowflake isn't even a SaaS model. It's pure utility-based. It's just you use it so much, the dollar retention is natural almost. Yeah. Which is a good place to be. Cool. Well, hey, as we wrap up here, flesh out the team real quick for us. How many folks full-time now? And now we're up over 500. Okay. 500 folks.
Heavy engineering? How many engineers?
To be honest, I don't know exactly. But I do know our product R&D organization overall, which includes engineering, is about a third of the company.
Okay. Okay. Fair enough. Great. Very cool. Anything I missed that you want to make sure we touch before we wrap up?
Oh, thanks. Thanks for having me, Nathan. Good to see you again. And hopefully we'll do it again in person, I hope. And I did go to SASTR this year. I think last time I was in person was SASTOC. But I am hoping next year we'll all start being able to get together in person again more.
I would love that too. I would very much love that. Let's take it home here. Number one, favorite business book, Godard?
Peak by Chip Conley.
Number two, CEO you're following or studying?
Mark Benioff at Salesforce.
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