G2 Will Break $100m ARR This Year, not from reviews. Guess their 2 new lines of business

Summary

Highlights

• G2, initially known as a software review website, is now nearing a $100 million ARR milestone. 🚀
• G2 Track is a new tool helping companies manage and optimize their SaaS and cloud expenditures. 💰
• The company has also launched an investor data solutions business to aid investors in software market analysis. 📉
• G2’s taxonomy system is a core asset, driving both G2 Track and investor solutions. 🔍
• G2 has expanded its ecosystem by licensing its taxonomy to other major platforms and investors. 👥

Key Takeaways

• G2 is close to breaking the $100 million ARR milestone. 🚀
• The company has introduced G2 Track to help manage SaaS and cloud spend. 💸
• Another new business line is investor data solutions for software investment insights. 📊
• G2's dynamic taxonomy allows for continuous categorization and improvement for software products. 🗂
• G2 also licenses its taxonomy to other companies and investors, broadening its market reach. 🌐

Overview

G2 Will Break $100m ARR This Year, not from reviews. Guess their 2 new lines of business Transcription

• 00:00 - 00:30 this is wild I bet you had no idea you could build a$ hundred million business for a review website that's right a review website that's exactly what CEO Godard able did when he launched G2 in 2012 here are three numbers you need to know number one they hit a 100 million bucks in Revenue last year number two they broke a $1.1 billion valuation in 2021 and have raised 240 million to date and number three there's over 936 folks full-time on their team what about usage how many actually use the site here are
• 00:30 - 01:00 three numbers you need to know there's 2,000 software categories on G2 there's over 100,000 software products listed across those categories and listings growth was 48% over the past 12 months if you want to see how godart has done this and it's not his first time he's done this many times you'll want his Playbook let's jump into his $100 million Playbook right now hey folks if we haven't met yet my name is Nathan ladka I launched and sold my first software company back in 2015 and went on to write a book about it which you
• 01:00 - 01:30 guys made a Wall Street Journal bestseller purchasing over 30,000 copies thank you so much for that after the book I launched this show and went went on to create founder path.com I raised a large fund to do non-dilutive deals with B2B software Founders so far we've invested in over 400 software Founders totaling $150 million here in 2024 we're doing three to four New Deals per week so if you're looking for Capital and don't want to give up Equity go sign up
• 01:30 - 02:00 at founder path.com for free to get your offer all right let's jump into the interview hey folks my guest today is Godard able he's a 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 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 uh you you gave a really great talk at our last founder event where you summarize some of the other companies you've built are are you having as much
• 02:00 - 02:30 fun building this one as the last three or four yeah but I would love entrepreneurship it's always different but I am enjoying the new challenges I love that so let's talk a little bit about product we had you on recently um 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 SASS and Cloud spend and we think it's especially relevant now a bit of an
• 02:30 - 03:00 economic downturn so everyone's trying to also figure out am I wasting money on some of my SAS 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 you know vendors of the world and other other sort of expense management tools yeah and we do partner with vendor and I think vendor they're really good at negotiating SAS contracts and they're more full service G2 track is really about giving you data benchmarks and it work works by API we
• 03:00 - 03:30 hook it up to your financial system let's say you're running netw Suite intch QuickBooks we parse all your spend data look at your usage if you're using something like OCTA and then Benchmark it against the whole G2 database to help you figure out are you have some duplicative apps you know areas you can save money and on the other side are there gaps in your stack you know where there's new products we'd recommend so I think we're really excited about the potential of track and I guess your ability to make smart recommendations there is directly dependent on your ability to convince found and CFOs to
• 03:30 - 04:00 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 and the good thing for us it's the same database you know the poers g2.com because on g2.com we have over 100,000 SAS 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 and that's one of the challeng Alles for C CFOs you know a lot of
• 04:00 - 04:30 companies are running hundreds if not thousands of apps and frankly if you're the CIO CFO you don't even know what they do you because marketing buys its own apps sales buys its own apps product buys its own apps and you know you just see other 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 datadriven stack assess ments and
• 04:30 - 05:00 so that's why we see the two very synergistic and also going the other way track can also help inform insights we provide on g2.com because it gives us a deeper look into you know what companies are spending on how that's trending where they're actually having success and so that's why we see it you know being very synergistic to what we're already building on g2.com so you 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 you know have connected
• 05:00 - 05:30 realtime API feeds you know into track today yeah and I think we have you know it's a few hundred companies and we have both a free in a paid version we have about 100 on the paid version now which is I think a big milestone because in some ways you know track is a sass startup within the greater G2 but obviously fully built into the data and the architecture but we're we're excited and we do think second half of this year we'll see a lot of momentum with that product because I think everyone is trying to you know figure out where to save a bit of money to you know so better WEA the uh the economic downturn
• 05:30 - 06:00 you said 100 on the paid version of track what does paid mean how do you make money on this product well I think it's a sass subscription like any product you know but with paid there's additional features and especially I think if you want apis to more Enterprise systems like netw Suite like OCTA that's when you go to the the paid version of track but if you're running QuickBooks if you're a startup you can try it for free I see so if there's a large Enterprise with 50 million bucks in Revenue that wants to use track to manage their spend and they also use OCTA when they click connect to OCTA you
• 06:00 - 06:30 might say wait you need an Enterprise plan here's a $300 a month fee to sort of access that true and the other thing we do for the bigger companies is we have a contract coner service because to really make track work well you also want to track the key contract terms you know such as renewal dates uh you know whatever kind of price uplift there might be and frankly there isn't a great way to get all that data into a system you know without doing some contract entry so we have a
• 06:30 - 07:00 contract coner service that's also part of our paid solution and that can really help companies and be more proactive in managing their whole SAS and cloud service stack some of the fastest growing SAS companies say well just sign threeyear 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 you're on the flip side trying to prevent your customers from paying more for something like Salesforce for example what are you
• 07:00 - 07:30 seeing right go ahead yeah I just say we're on both sides of that we just want people to be aware you know I think and I'm also an entrepreneur right I think that's key for a SAS 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 than the buyers your customers will question 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 nobody's looked at the contract and turns out there's like a 90day opt out
• 07:30 - 08:00 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 CIO CFOs don't want to be surprised and that's you know track make sure that they have full visibility and they can be proactive Godard when you look at the the ecosystem of folks that are helping SAS companies track their spend who right now do you feel like has the most data the most live connections to SAS companies yeah uh and honestly I'm not sure I do think in terms of the negotiating
• 08:00 - 08:30 uh you know really I think vendor obviously has great momentum right they just raise a bunch more money and uh you know so uh but I I think in terms of actually Gathering data you know we feel like we're 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 million billion sorry valuation Mark yes that was very exciting any more Capital race since then or no no and we don't I don't think would be great 10 raise
• 08:30 - 09:00 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 55 is million run rate so that was a 19x is multiple right if that's accurate I'd say that's a fair multiple not crazy yeah no and we we are growing well you I think this year we'll definitely break through 100 million ARR so oh wow yeah goar that's a big that's a big announcement that's exciting I mean how I mean are we like is is that a stretch FL or you feel pretty good about
• 09:00 - 09:30 that no I think well 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 a lot of ways and I probably agree in a lot of ways it's more exciting becoming unicorn at least last year because last year becoming unicorn was probably easier and uh you know then breaking through 100 million AR as you know not that many SAS vendors hit that Milestone so y it's rare excited to get there I mean that means right now you've got to be somewhere between like sort of 808 5 million in AR right I'm not going
• 09:30 - 10:00 to confirm that but we will get through 100 this year all 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 is your ability to accurately taxonomize hundreds of thousands of software companies how on Earth do you do this well I think we have the advantage that vendors you know software vendors software sellers they want it to be write on G2 and as you know our models so if you're a sess entrepreneur you can list on G2 for free and then we also ask you what category
• 10:00 - 10:30 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 something 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 their products and that's never done because vendors like Zoom info 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 to be right on G2 so that software buyers and
• 10:30 - 11:00 we have about 7even million a month coming to G2 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 uh and also I think more entrepreneurs I think the number of listings on GT has grown 48% over the last year that's wow and so that's very exciting and but it's very collaborative you know with our community of vendors and they're always helping us updated and and we do have a research team I 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
• 11:00 - 11:30 categorize them but then we come up with different questions you know 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 you know how well those products are working for them so that's 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 ah one of them for example is service now and service now I think as you know leading it platform Cloud company and but they also have an it Asset Management tool and you know to
• 11:30 - 12:00 help them categorize all their apps they now use the G2 taxonomy and it's also something investors are now licensing you know we have an investor Data Solutions business at G2 also very exciting about 50 of the world's leading SAS investors now also using G2 data and the taxonomy also helps them just to try to make sense oh who are the competitors for this you know deal what are adjacent markets and uh so I think it is an exciting asset you know very Dynamic asset that we keep building guys exciting times at G2 again broke the
• 12:00 - 12:30 Unicorn Mark last year and caught 55 is million Revenue Godard Fields 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 SAS 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 increased Runway Godard G2 thanks for cheing us to the top yeah thanks Nathan great to see you