SaaS Interviews with CEOs, Startups, Founders
G2 Will Break $100m ARR This Year, not from reviews. Guess their 2 new lines of business.
09 Aug 2022
Chapter 1: What is the main topic discussed in this episode?
Yeah, no, and we are growing well.
Chapter 2: How is G2 on track to break $100 million ARR this year?
I think this year we'll definitely break through 100 million ARR.
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.
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He's a CEO of G2, which I'm sure many of you guys have seen.
Chapter 3: What are G2's new product offerings beyond reviews?
You've seen the badges flying around LinkedIn. Everyone wants to be top-ranked on G2. That's because it's the leading business software review website and marketplace, which he co-founded in 2012. Godard, you ready to take us to the top?
Yes, let's go, Nathan.
So this is not your first rodeo. You gave a really great talk at our last founder event where you summarized some of the other companies you've built. Are you having as much fun building this one as the last three or four?
Yeah, but I love entrepreneurship. It's always different, but I am enjoying the new challenges.
I love that. So let's talk a little bit about products because we had you on recently. Obviously, most people think about G2 as a review site, right? How do you think about product expansion? What's next?
Yeah, I think one of our exciting new products is G2 Track. And G2 Track is all about helping CIOs, CFOs track all of their SaaS and cloud spend. And we think it's especially relevant now, a bit of an economic downturn. So everyone's trying to also figure out, am I wasting money on some of my SaaS? Are there gaps in my tech stack?
And with G2 Track, we can help companies figure that out in real time.
And so how should folks think about G2 Track relative to vendors of the world and other sort of expense management tools?
Yeah. And we do partner with vendors. And I think vendors are really good at negotiating SaaS contracts and they're more full service. G2 Track is really about giving you data benchmarks and it works by API. We hook it up to your financial system. Let's say you're running NetSuite, Intac, QuickBooks. We parse all your spend data.
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Chapter 4: How does G2 Track help manage SaaS and cloud spending?
Because to really make track work well, you also want to track the key contract terms, such as renewal dates, whatever kind of price uplift there might be. And frankly, there isn't a great way to get all that data into a system without doing some contract entry. So we have a contract concierge service. That's also part of our paid solution.
And that can really help companies be more proactive in managing their whole SaaS and cloud service stack.
Some of the fastest growing SaaS companies say, well, just sign three-year contracts and they build in, you called it price uplift, but it's effectively a natural accelerant each year where the value of the, or the ACV increases, whatever, 5%. You're on the flip side, trying to prevent your customers from paying more for something like Salesforce, for example. What are you seeing right now?
Go ahead.
Yeah, I just say we're on both sides of that. We just want people to be aware. And I'm also an entrepreneur, right? And I think that's key for a SaaS seller. If you want to do that, you have to provide more value each year. And obviously, I think some vendors do a great job of that, right?
But if you're not providing upgrades, more value each year, then yes, then the buyers, your customers will question that hard. And for the buyers, we just want them to be aware and have that visibility because sometimes there are surprises, right? And then nobody's looked at the contract and turns out there's like a 90-day opt-out. And if you don't, there's whatever uplift there is.
And I think that's all fine as long as you're aware of it, as long as you feel like you're getting enough value. But obviously, CIOs, CFOs don't want to be surprised. And that's track to make sure that they have full visibility and they can be proactive.
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Chapter 5: What challenges do CIOs and CFOs face with SaaS management?
That's NathanLatka.com forward slash remote and promo code L-A-T-K-A. Check it out today before you miss out. Goddard, when you look at the ecosystem of folks that are helping SaaS companies track their spend, who right now do you feel like has the most data, the most live connections to SaaS companies?
Yeah. And honestly, I'm not sure. I do think in terms of the negotiating, you know, really, I think vendor obviously has great momentum, right? This raises a bunch more money. And, you know, so, but I think in terms of actually gathering data, you know, we feel like we're in a good position.
Now, you're also well-capitalized. I believe your last round was $157 million Series D last year, right? True. And broke the $1.1 billion evaluation mark? Yes. That was very exciting. Any more capital raised since then or no?
No. And I don't think now would be a great time to raise capital. Yeah. Although I think we're also lucky. I don't think we raised at like some crazy, crazy multiple.
Well, you told us, I mean, you told us right around there, you're breaking like a few 55 ish million run rate. So that was a 19 X ish multiple, right? If that's accurate, I'd say that's a fair multiple, not crazy.
Yeah, no. And we are growing well, you know, I think this year we'll definitely break through a hundred million ARR. So, Oh, wow. Yeah.
That's a big, that's a big announcement. That's exciting. I mean, how close, I mean, are we like, is that a stretch or you, you, you feel pretty good about that?
No, I think we'll, I feel good at definitely getting there by year end. And certainly when we do hit it, you know, we'll, we'll share that with you.
Cause it will be, that's exciting.
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Chapter 6: How does G2 leverage its database for smart recommendations?
And then obviously as vendors grow, like our friend Henry at Zoom Info, right? Obviously they grow well beyond one product, one category. So now Zoom Info, somebody like that's probably in 30 categories, but we actively work with their product marketing, their product teams to make sure they're properly classified across all of their products.
And that's never done because vendors like ZoomInfo are always innovating, entering new categories, launching new products. But I do think we've become an essential part now of our industry, where if you're a software vendor, you want it to be right on G2 so that software buyers, and we have about $7 million a month coming to G2, that they discover you because you don't want to be missed.
And so that's why there's a nice synergy with our community of vendors and also, I think, more entrepreneurs. I think the number of listings on G2 has grown 48% over the last year. So that's very exciting. But it's very collaborative with our community of vendors and they're always helping us update it. And we do have a research team and it's a pretty big job.
And we have about 50 people in our research team always working with the vendors. Because not only do we categorize them, but then we come up with different questions to figure out what are the key features in each of those categories for each of those products. So we also can ask the users the right questions about how well those products are working for them. But I agree, it's a big asset.
And that's also spawned a new business for us where we do license our taxonomy to partners. One of them, for example, is ServiceNow. And ServiceNow, I think, as you know, leading IT platform, cloud company. But they also have an IT asset management tool to help them categorize all their apps. They now use the G2 taxonomy. And it's also something investors are now licensing.
We have an investor data solutions business at G2, also very exciting. We have about 50 of the world's leading SaaS investors now also using G2 data. And the taxonomy also helps them just to try to make sense of who are the competitors for this deal, what are adjacent markets. And so I think it is an exciting asset, a very dynamic asset that we keep building.
Guys, exciting times at G2. Again, broke the unicorn mark last year and caught 55-ish million in revenue. Goddard feels good about breaking the $100 million mark this year. Also breaking into new lines of business.
He sounds like most excited about G2 Track, which helps you understand and manage your SaaS expenses, which is especially important in a downturn like we're going through now where everyone wants to save cash flow, ideally get profitable, and back to break even increase runway. Goddard, G2, thanks for taking us to the top.
Yeah. Thanks, Nathan. Great to see you.
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