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

Summary

In this insightful interview, CEO Godard Abel discusses the success of G2, a review platform that reached a $100 million revenue milestone and a $1.1 billion valuation in 2021. With over 100,000 software products listed across 2,000 categories, G2's dynamic taxonomy is key to its growth. The spotlight is on G2 Track, a new product aimed at helping businesses manage their SaaS and cloud expenses efficiently, especially during economic downturns. With a strong community of vendors and a dedicated research team, G2 continues to innovate and expand its offerings.

Takeaways

• 🚀 G2 is a review website turned into a $100 million business, founded by CEO Godard Abel in 2012.
• 📈 G2 reached $100 million in revenue in the previous year, achieved a $1.1 billion valuation in 2021, and has raised a total of $240 million to date.
• 👥 The company has a team of over 936 full-time employees.
• 📊 G2 has 2,000 software categories and lists over 100,000 software products, with a 48% growth in listings over the past 12 months.
• 💡 G2's new product, G2 Track, helps CIOs and CFOs track their SaaS and Cloud spend, which is particularly relevant during economic downturns.
• 🔗 G2 Track works by API, integrating with financial systems like NetSuite and QuickBooks to analyze spending and usage data against the G2 database for insights.
• 💼 G2 Track offers both free and paid versions, with the paid version providing additional features such as API integration with enterprise systems and contract conversion services.
• 🔑 The success of G2 Track relies on convincing founders and CFOs to connect their data, leveraging the extensive database of G2.com.
• 🌐 G2's dynamic taxonomy of over 100,000 SaaS products listed in 2,000 categories is a key asset for G2 Track and a challenge for CIOs and CFOs to manage.
• 📈 G2 is expected to break through the $100 million ARR mark by the end of the year, a significant milestone in the SaaS industry.
• 🌟 G2's taxonomy is so valuable that it's licensed to partners like ServiceNow and is used by some of the world's leading SaaS investors for market analysis.

Q & A

What is G2 and what does it specialize in?

G2 is a leading business software review website and marketplace, co-founded by Godard Abel in 2012. It specializes in providing software reviews and has expanded to offer a product called G2 Track, which helps businesses track their SaaS and cloud spend.

What significant milestones has G2 achieved in terms of revenue and valuation?

G2 achieved $100 million in revenue in the previous year, broke a $1.1 billion valuation in 2021, and has raised a total of $240 million to date.

How many full-time team members does G2 have?

G2 has over 936 full-time team members.

What is the significance of the number 2,000 in G2's context?

There are 2,000 software categories on G2, which indicates the breadth of the software market they cover.

How many software products are listed on G2 and what was the growth rate over the past 12 months?

Over 100,000 software products are listed across categories on G2, with a 48% growth in listings over the past 12 months.

What is G2 Track and how does it benefit businesses?

G2 Track is a product that helps CIOs and CFOs track all of their SaaS and Cloud spend in real time. It provides data benchmarks and helps companies identify areas where they can save money or fill gaps in their tech stack.

How does G2 Track differ from other expense management tools?

G2 Track focuses on providing data benchmarks and operates through API integration with financial systems. It differs by offering insights based on the G2 database, helping companies assess their tech stack and spending more effectively.

What is the business model for G2 Track?

G2 Track operates on a SaaS subscription model, with a free version for startups and a paid version that offers additional features and API integrations for enterprise systems.

What additional services does the paid version of G2 Track offer?

The paid version of G2 Track offers API integrations with more enterprise systems like NetSuite and OCTA, as well as a contract conversion service to help companies manage key contract terms proactively.

How does G2 ensure accurate taxonomization of the thousands of software companies listed on their platform?

G2 works actively with software vendors to ensure proper classification across categories. They have a research team of about 50 people who collaborate with vendors and continuously update the taxonomy to reflect new products and categories.

What is the significance of G2's dynamic taxonomy for both vendors and investors?

G2's dynamic taxonomy is an essential tool for software vendors to ensure they are discoverable by potential buyers and for investors to make sense of the market, understand competitors, and identify adjacent markets.

How does G2 plan to achieve its goal of breaking the $100 million ARR mark?

G2 is growing well and is confident about reaching the $100 million ARR mark by the end of the year, supported by the expansion of their product offerings like G2 Track and the continuous growth of their platform.

Outlines

00:00

🚀 G2's Success Story and Product Expansion

This paragraph introduces the remarkable success of G2, a review website launched by CEO Godard Able in 2012. It highlights the company's impressive milestones: reaching $100 million in revenue, a $1.1 billion valuation, and securing $240 million in funding. The team has grown to over 936 full-time employees. The usage statistics of the platform are equally impressive, with 2,000 software categories and 100,000 products listed, showing a 48% growth in listings over the past year. The speaker, Nathan Ladka, shares his background and introduces the interview with Godard, discussing G2's role as a leading business software review website and marketplace. Godard hints at new product developments, particularly 'G2 Track,' aimed at helping businesses manage their SaaS and cloud spend.

05:00

📊 G2 Track: A Tool for SaaS Spend Management

The second paragraph delves into the details of G2 Track, a new product designed to assist CIOs and CFOs in tracking and managing their SaaS and cloud expenses. It is particularly relevant during economic downturns, helping companies identify waste and gaps in their tech stack. G2 Track works by integrating with financial systems via API, analyzing spend data, and benchmarking it against the G2 database to provide actionable insights. The discussion covers the product's free and paid versions, with the paid version offering additional features like API integration with enterprise systems and a contract conversion service. The goal is to provide full visibility and proactive management of the SaaS and cloud service stack.

10:01

🌐 G2's Dynamic Taxonomy and Its Impact on the Industry

The final paragraph focuses on G2's dynamic taxonomy system, which is a key asset for the company and its users. It explains how software vendors actively engage with G2 to ensure their products are accurately categorized across various software categories. The taxonomy system is not only crucial for G2's own offerings but also for external partners like ServiceNow, which licenses the taxonomy for its IT Asset Management tool. Additionally, G2's taxonomy is being utilized by some of the world's leading SaaS investors to analyze market trends and competition. The paragraph concludes with Godard expressing excitement about the growth of G2, its recent achievements, and the potential of G2 Track in the current economic climate.

Keywords

💡G2

G2 is a leading business software review website and marketplace. It serves as a platform where users can discover, review, and rank various software products. The video discusses G2's growth, its valuation, and its impact on the software industry. The CEO, Godard Able, highlights G2's role in helping businesses make informed decisions about software purchases based on peer reviews and ratings.

💡Revenue

Revenue refers to the income generated by a company from its business activities. In the context of the video, G2 hit a significant milestone by achieving $100 million in revenue in the previous year, indicating the company's financial success and growth.

💡Valuation

Valuation is an estimate of a company's worth. The video mentions that G2 broke a $1.1 billion valuation in 2021, which signifies the market's perception of the company's potential and current value.

💡G2 Track

G2 Track is a product mentioned in the video that helps CIOs and CFOs track their SaaS and cloud spend. It provides data, benchmarks, and insights to help companies optimize their software spending and identify potential areas for cost savings or gaps in their tech stack.

💡API

API stands for Application Programming Interface, which allows different software applications to communicate with each other. G2 Track uses APIs to connect with financial systems like NetSuite and QuickBooks, parsing spend data to provide insights to users.

💡Taxonomy

Taxonomy in the context of the video refers to the categorization system used by G2 to organize and classify the vast array of software products listed on their platform. A dynamic taxonomy is crucial for G2 Track to accurately match products and provide relevant recommendations.

💡SaaS

SaaS stands for Software as a Service, a software licensing and delivery model in which software is accessed over the internet rather than installed locally. The video discusses G2's role in helping companies manage their SaaS subscriptions and spending.

💡Marketplace

A marketplace, as used in the video, is a platform where buyers and sellers of goods or services can come together to conduct transactions. G2 operates as a marketplace for software reviews, helping businesses discover and select the right software solutions.

💡Entrepreneurship

Entrepreneurship is the process of designing, launching, and running a new business. The video features Godard Able, who is an entrepreneur and CEO of G2, discussing his experiences building the company and the challenges and enjoyment he finds in entrepreneurship.

💡Investment

Investment in the video refers to the financial backing provided to startups and growing companies. The discussion includes G2's fundraising efforts, with $240 million raised to date, and the potential for further capital raising to support the company's growth.

💡Economic Downturn

An economic downturn is a period of reduced economic activity. The video mentions the relevance of G2 Track during such times, as companies look to optimize their spending and manage their SaaS expenses more carefully to weather financial challenges.

Highlights

G2, a review website launched in 2012 by CEO Godard Abel, reached $100 million in revenue in the previous year.

G2 achieved a valuation of over $1.1 billion in 2021 and has raised a total of $240 million to date.

The company has over 936 full-time team members.

G2 lists over 100,000 software products across 2,000 categories with a 48% growth in listings over the past year.

Nathan Latka, author and founder of FounderPath.com, has invested in over 400 software founders totaling $150 million.

G2's new product, G2 Track, helps CIOs and CFOs track SaaS and cloud spend, especially relevant during economic downturns.

G2 Track uses API integration with financial systems to provide data benchmarks and identify cost-saving opportunities.

G2 Track differentiates itself from vendors by focusing on data provision rather than contract negotiation services.

G2's dynamic taxonomy of over 100,000 SaaS products is a key asset for G2 Track's data-driven stack assessments.

G2 Track's smart recommendations are dependent on the connection of financial data by founders and CFOs.

G2 Track is offered in both free and paid versions, with the paid version offering additional enterprise system APIs and contract conversion services.

G2 aims to help companies manage their SaaS and cloud service stack proactively, avoiding surprises in contract terms and costs.

G2's taxonomy and review data are licensed to partners like ServiceNow for categorizing apps and aiding investor data solutions.

G2's community of vendors actively works with the platform to ensure proper classification and innovation in categories.

G2's listings have grown by 48% in the last year, indicating a strong synergy between vendors and the platform.

Godard Abel is optimistic about G2 breaking through the $100 million ARR mark by the end of this year.

G2's success is attributed to its ability to accurately taxonomize software companies and its collaborative relationship with vendors.

Transcripts

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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