How G2 Closed In on $100M ARR With 7 Million Monthly Active Users in 2022 (Interview with CEO Godard Abel)

Introduction and G2 Background

Nathan Latka

00:00Hey, folks. My guest today is Godard Abel. He's the CEO of G2, which I'm sure many of you guys have seen. You've seen the badges flying around LinkedIn. Everyone wants to be top ranked on G2. That's because it's a leading business software review website and marketplace, which he co founded in 2012. Godard, are ready to take us to the top?

Godard Abel

00:14>> Yes. Let's go, Nathan.

Nathan Latka

00:16So this is not your first rodeo. You 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?

Godard Abel

00:26>> Yeah. But I will love entrepreneurship. It's always different, but I am enjoying the new challenges.

Product Expansion and G2 Track Overview

Nathan Latka

00:32I love that. So let's talk a little bit about products. 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?

Godard Abel

00:41>> 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. 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 G2Track, we can help companies figure that out in real time.

G2 Track vs. Competing Spend Management Tools

Nathan Latka

01:05And so how should folks think about G2Track relative to, you know, vendors of the world and other sort of expense management tools?

Godard Abel

01:13>> Yeah. And we do partner with vendors. I think vendors are really good at negotiating SaaS contracts and they're more full service. G2Track 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, Intech, QuickBooks, we parse all your spend data, look at your usage for using something like Okta and then benchmark it against all G2 database to help you figure out are you

01:39>> have some duplicative apps, are there areas you can save money? And on the other side, are there gaps in your stack, where there's new products we'd recommend? I think we're really excited about the potential of Track.

Nathan Latka

01:49And I guess your ability to make smart recommendations there is directly dependent on your ability to convince founders and CFOs to actually connect the data. So you sort of have a bit of a marketplace problem there, but you are the marketplace king. You've solved this with reviews. How do you think about figuring out that sort of connection equation and making sure you have a big database to make smart recommendations based off of? Right.

Taxonomy and Database as Core Assets

Godard Abel

02:06>> And the good thing for us, it's the same database, you know, the powers g2.com because on g2.com we have over a 100,000 SaaS software products listed. We categorize them in over 2,000 categories, but it's a very dynamic taxonomy. And frankly, that's one of the key assets for Track. That's one of the challenges for CIO, CFOs. A lot of companies are running hundreds, if not thousands of apps. Frankly, if you're the CIO, CFO, you don't even know

02:30>> what they do because marketing buys its own apps, sales buys its own apps, product buys its own apps and you just see their spend, but they have no idea what they do. So having that taxonomy, being able to match products and then even using the review data, seeing what businesses like yours are having success with on g2.com based on that feedback is actually essential, we think, to making very data driven stack assessments. And so that's why

02:54>> we see the two very synergistic. And also going the other way, Trac can also help inform the insights we provide on g2 dot com because it gives us a deeper look into what companies are spending on, how that's trending, where they're actually having success. And so that's why we see it being very synergistic to what we're already building on g2.com.

Nathan Latka

03:14You mentioned over 100,000 software companies on G2, the value of the taxonomy, the dynamic taxonomy you've built and how that feeds into Track. How many people have connected real time API feeds into Track today?

G2 Track Customer Count and Paid Tier

Godard Abel

03:27>> Yeah. I think we have, it's a few 100 companies and we have both a free and a paid version. We have about 100 on the paid version now, which is I think a big milestone because in some ways, know, Track is a SaaS startup within the greater G2, but obviously fully built into the data and the architecture, but we're excited. And we do think second half of this year, we'll see a lot of momentum with that

03:47>> product because I think everyone is trying to figure out where to save a bit of money to also better weather the economic downturn.

Sponsor Break: Founderpath Valuation Tool

Nathan Latka

03:56Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually. Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founder Path. Check this out. I'll show you how you can access this in a second, but you log in, you

04:19connect your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founder Path dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company,

04:43you're gonna get a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold the whole thing outright. Now what's cool about this is

05:05this is not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founders share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple.

05:31Maybe you're going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founder Path. And we're thrilled to bring it to you. All right, we're gonna go back to the YouTube video here in

05:53a second, but if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link, this link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's

G2 Track Pricing and Enterprise Features

Nathan Latka

06:19jump back into the interview. You said a 100 on the paid version of Track. What does paid mean? How do you make money on this product?

Godard Abel

06:26>> Well, I think it's a SaaS subscription, like any product, but with paid, there's additional features. Especially, I think if you want APIs to more enterprise systems like NetSuite, like Okta, that's when you go to the paid version of Track. But if you're running QuickBooks, if you're a startup, you can try it for free.

Nathan Latka

06:42I see. So if there's a large enterprise with $50,000,000 in revenue that wants to use Track to manage their spend and they also use Okta, when they click Connect to Okta, you might say, Wait, you needed an enterprise plan. Here's a $300 a month fee to sort of access that.

Godard Abel

06:55>> True. And the other thing we do for the bigger companies is we have a contract concierge service because to really make Trac work well, you also want to track the key contract terms such as renewal dates, whatever kind of price uplift there might be. Frankly, there isn't a great way to get all that data into a system without doing some contract entry. We have a contract concierge service that's also part of our paid solution and that

07:24>> can really help companies be more proactive in managing their whole SaaS and cloud service stack.

SaaS Contract Dynamics and Buyer Awareness

Nathan Latka

07:31Some of the fastest growing SaaS companies say, Well, just sign three year contracts and they build in uplift, but it's effectively a natural accelerant each year where the value of the or the ACV increases, whatever, 5%. You're you're on the flip side trying to prevent your customers from paying more for something like Salesforce, for example. Are you seeing right go ahead.

Godard Abel

07:50>> Yeah. I just say we're on both sides of that. We just want people to be aware. And I think, and I'm also an entrepreneur, right? And 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

08:08>> that hard. And for the buyers, we just want them to be aware, you know, and, and have that visibility because sometimes there are surprises, right? And then like nobody's looked at the contract and turns out there's like a ninety 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

08:28>> don't wanna be surprised and that's, you know, track to make sure that they have full visibility and they can be proactive.

Competitive Landscape in SaaS Spend Management

Nathan Latka

08:34Godard, 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?

Godard Abel

08:43>> Yeah. And honestly, I'm not sure. I do think in terms of the negotiating, you know, and really, I think vendor obviously has great momentum, right? They just raise 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.

Series D Funding and Unicorn Valuation

Nathan Latka

09:00Mhmm. Now you're also well capitalized. I believe your last round was 157,000,000 series D last year. Right?

Godard Abel

09:06>> True.

Nathan Latka

09:07And broke the $1.1 billion, sorry, valuation mark?

Godard Abel

09:11>> Yes. That was very exciting.

Nathan Latka

09:13Any more capital raised since then or no?

Godard Abel

09:15>> No. And we don't 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.

$100M ARR Target for 2022

Nathan Latka

09:26Well, you told us. I mean, you told us right around there you're breaking like a 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.

Godard Abel

09:36>> Yeah. No. And we we are growing well. You know, I think this year we'll definitely break through a 100,000,000 ARR. So

Nathan Latka

09:42Oh, wow. Yeah. Godard, 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 goal? You you you feel pretty good about that?

Godard Abel

09:50>> 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 because it will be That's exciting. And I think in

Nathan Latka

09:57a lot

Godard Abel

09:58>> of and ways I probably agree. In a lot of ways, it's it's more exciting to become a unicorn, at least last year. Like, because last year, becoming unicorn was probably easier. And, you know, then breaking through a 100,000,000 ARR. As you know, not that many SaaS vendors hit that milestone.

Nathan Latka

10:12Yep.

Godard Abel

10:13>> That's rare. Excited to get there.

Nathan Latka

10:15I mean, that means right now, you've gotta be somewhere between, like, sort of $8,085,000,000 in ARR. Right?

Godard Abel

10:20>> I'm not gonna confirm that, but but we will get through a 100 this year.

How G2 Builds and Maintains Its Taxonomy

Nathan Latka

10:24All right. Fair enough. Very cool. Last question I want to ask about before we wrap up. I would argue one of your biggest assets is your ability to accurately taxonomize hundreds of thousands of software companies. How on earth do you do this?

Godard Abel

10:35>> Well, I think we have the advantage that vendors, you know, software vendors, software sellers, they want it to be right on G2. And as you know our model, so if you're a SaaS entrepreneur, can list on G2 for free. And then we also ask you what category you're in. 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

10:57>> 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. Yeah. Cause vendors like zoom info are always innovating, entering new categories, launching new products, but I do think we've become an essential part now of our industry. You know, where if you're a software vendor, you want it to be right on G2 so that software buyers, and

11:19>> we have about 7,000,000 a month coming to G2 if they discover you, you know, because you don't want to be missed. And so that's why there's a nice synergy, you know, with our community of vendors and, and also I think more entrepreneurs. I think the number of listings on G2 has grown 48 over the last year.

Nathan Latka

11:34That's wild.

Godard Abel

11:35>> That's very exciting. But it's very collaborative with our community of vendors and they're always helping us update it. We do have a research team and it's a pretty big job. 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. We also

Licensing the Taxonomy to ServiceNow and Investors

Godard Abel

11:56>> can ask the users the right questions about how well those products are working for them. But I agree it's a big asset. That's also spawned a new business for us where we do license our taxonomy to partners. One of them, for example, is ServiceNow. 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

12:24>> it's also something investors are now licensing. We have an investor data solutions business at G2, also very exciting. About 50 of the world's leading SaaS investors now also using g two data, and the taxonomy also helps them. And just to try to make sense of who are the competitors for this, you know, deal, what are adjacent markets. And, so I think it is an exciting asset, you know, very dynamic asset that we keep building.

Wrap-Up and Closing Remarks

Nathan Latka

12:47Guys, exciting times at g two. Again, broke the unicorn mark last year and caught 55 ish million revenue. Godard feels good about breaking the $100,000,000 mark this year. Also breaking into new lines of business. He sounds like most excited about g two 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 breakeven,

13:08increase runway. Godard, g two, thanks for taking us to the top.

Godard Abel

13:11>> Yeah. Thanks, Nathan. Great to see you.

Nathan Latka

13:15One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday, 1PM

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