The article below is taken from SaaS Mag Issue 4. To order your free copy, click here.
Godard Abel is an entrepreneur with a long track record of starting and scaling up successful companies. The co-founder of BigMachines and SteelBrick — both of which had multimillion-dollar exits — has been growing his latest venture, G2, into a multinational company with offices in Singapore, India, London, and the U.S., with more to come. G2’s platform allows prospective customers to read real reviews — both positive and negative — of the SaaS products they’re considering, giving them the chance to make an informed decision based on the experiences of their peers, rather than blindly investing in an expensive product that might not work for their team or company.
Abel says the G2 platform is built on trust, particularly important in a political and social environment where that value seems to be eroding. “Really, right now our whole world is in a crisis of trust,” Abel notes. In the SaaS space, according to G2’s data, the majority of software buyers don’t trust software sales teams and marketing — in the past, companies have overpromised and underdelivered. Buyers “don’t know what solutions are out there,” Abel observes, “and they also don’t know who to trust.”
Enter G2, which Abel and his co-founders envisioned as the Yelp of B2B software sales. Launched in 2012 as G2 Labs by Abel and Matt Gorniak, Abel’s business partner of many years, it publishes authenticated reviews — currently more than a million — by professionals. This enables buyers to see what their industry peers use (and what they don’t). Between 4 and 5 million users consult G2 each month, a figure that Abel expects to double by the end of 2020.
G2’s model is innovative, and it’s also democratic. It is a “freemium” site, available to anyone who wants to read its reviews. G2 doesn’t use advertising to monetize its content — instead, it allows featured companies to license its content for their own use and also generates reports based on user-generated data that it sells to app companies. Other rating reports and analysis quickly become outdated and are available only to subscription holders — not necessarily to the people actually using the apps being reviewed.
LinkedIn made a rare outside investment in G2 in 2017, and the two companies have built a vital partnership, with LinkedIn providing essential user verification for G2 and allowing G2 users to filter reviews based on their first-tier LinkedIn contacts. G2 has raised more than $100 million during six funding rounds, after Abel and his co-founders put in $2 million in seed funding.
Abel’s experience as a successful tech entrepreneur runs deep. After a three-year stint as a consultant with McKinsey, he became general manager for iNiku, a SaaS app for professional service automation, and never looked back. In 1999, Abel founded Big Machines, along with two MIT friends, Christopher Shutts and Eugene Chiu. BigMachines became the market-leading cloud-based CPQ provider, ultimately generating $50 million in revenue. BigMachines weathered the dot-com bust in 2000 and the aftermath of 9/11, going from a $20 million investment with conversations about a possible IPO to near-bankruptcy. Instead of shutting the company’s doors, Abel and his partners decided to scale back, and focus on organic growth. Vista Equity Partners, a San Francisco-based private equity firm, acquired a majority stake in BigMachines in 2010; it sold to Oracle in 2013 for $400 million.
After leaving BigMachines in 2011, Abel became the CEO of SteelBrick, a CPQ and QTC software company on SalesForce’s Lightning platform, in 2014. He supervised the company’s growth from five to 200 employees around the globe in two years and raised $78 million in venture capital from firms like Emergence and Shasta. In 2016, Abel and his team sold SteelBrick to SalesForce, which now runs the software as SalesForce CPQ and SalesForce QTC.
Abel’s entrepreneurial spirit can be traced back to his paternal grandfather, who started a pump company in the ruins of post-World War II Germany. Abel’s father took over the business and moved the family from Mönchengladbach, Germany, where Abel was born, to the U.S. to start the company’s subsidiary here. Abel thought he would follow in his father’s footsteps and take over the family business, completing his undergraduate studies in engineering at MIT and later earning a master’s in mechanical engineering there. And the family company did provide Abel with his first big tech business opportunity. While Abel was earning his MBA at Stanford, he persuaded his father — along with former Apple CEO John Sculley — to invest in a web service to help configure those pumps for customers. This was 20 years ago, at a time when most internet users still had dial-up service. The idea would eventually become BigMachines.
Abel is now paying his success forward, investing in and serving as the executive chairman of ThreeKit, a Chicago-based company that creates arresting product visuals for companies — whether it be online or at trade shows — using cutting-edge technologies like augmented reality and virtual photography.
Trust, Abel says, is the guiding principle at all levels of G2’s business, whether creating a shared vision with global partners or building G2’s team across the world. As he continues to grow the company, Abel focuses on creating a workforce based around four core principles: performance, entrepreneurial spirit, authenticity, and kindness, what he calls “PEAK culture.” Abel told investor IVP last year that the team he has built, along with longtime partners like Gorniak and Tim Handorf, is an “entrepreneurial family.”
Abel was raised in Germany and Sewickley, Pennsylvania, and after several years in Chicago, he recently relocated to San Francisco with his wife, Stacy, and their three children.
SaaS Mag caught up with Abel to ask about the “smart growth” of G2, what his previous business successes have taught him, and where his SaaS ventures will take him next.
You founded two companies, both of which had multimillion-dollar exits. BigMachines sold to Oracle for $400 million and SteelBrick sold to Salesforce for $360 million. How have your past experiences shaped your vision for G2?
Our experiences with BigMachines and SteelBrick really provided quality inspiration for G2, and both were SaaS companies. And I think what we really saw was number one, how SaaS buyers were struggling to figure out what the right software was for their business, and we wanted to make it a lot easier for SaaS buyers to discover and buy the best SaaS solutions for their business. When we started G2 back in 2012, we were really inspired by consumer internet models—the way we can shop on Amazon or the way we can look at trip reviews when we’re shopping for hotels on TripAdvisor—and we thought our industry of SaaS was missing that.
We saw that SaaS providers were very confused— they didn’t know what solutions were out there for them. And we also saw it was very challenging for SaaS vendors like ourselves to break through the noise and to be able to connect with the right customers. And since we started in 2012, the reality of this has just accelerated. SaaS has been booming, and I think when we started the company, Marc Andreessen said, “Software is eating the world.” We’re still in the middle of that, where there’s more and more SaaS apps being launched every day, every year, so there’s more and more solutions out there for software buyers, but also I think software buyers don’t know what solutions are out there and they also don’t know who to trust. The other big vision for G2 is that we can really make it easy for software buyers to find solutions they can trust, and really help them take their business to the next level.
Can you talk about some of the feedback that you were getting prior to starting G2, from colleagues or other folks in the industry, that maybe had ticked a little box or maybe made a bell ring in your brain that said, “Oh, we really need to do something about this”?
One thing I remember back in my days with BigMachines was we would have — and we were early, this was still in the 2000s — and at the time, we were making what you call configure price quotes software, CPQ software: I vividly remember, we had some customers like Rolls-Royce that had spent years kind of developing their own tools, and when they finally discovered BigMachines and they’re like, “Oh, wow. I had no idea solutions like yours existed. We thought we had to build software ourselves.”
At BigMachines we had hundreds of customers like that — we were serving global manufacturers. But most of them just weren’t aware that SaaS solutions — CPQ solutions — like BigMachines existed. And the other pain we saw was the traditional analysts like Gartner weren’t covering these new SaaS categories—they didn’t even put us in a report for almost 10 years. And so the traditional source for insights wasn’t keeping up with SaaS and with the cloud. We just really wanted to provide something much more real-time.
I think the other thing is consumers, and even services like Gartner, they’re very exclusive. Even today, they tend to serve Fortune 500 CIOs. I mentioned Rolls-Royce, even if the CIO has a subscription to Gartner, the reality is the project managers on individual teams in different business units wouldn’t necessarily have access, and I think the premise in how some of those customers would find us was Google. So, they would be looking for coding software, and they didn’t know something like CPQ existed, but some of them would eventually find us via Google searches. And then obviously we’d see consumer sites at the time like Yelp or Trip Advisor or Amazon. They aggregate all that information, and we thought, “Oh, wow. G2 can do the same thing for SaaS and for software for businesses. We can create one hub they can just go to and help them discover the right software.” And then it’s very important that we also help them find vendors they can trust to provide them the right solution.
“The big vision for G2 is that we can really make it easy for software buyers to find solutions they can trust.”
Why did you choose to raise money for this venture versus funding it yourself?
Almost $2 million was our own money, based on the success we had had with BigMachines. At the beginning, it was hard to generate revenue, and I think ultimately that’s also why we raised more money because with G2 we were really building a consumer-like marketplace. That took significant time and investment to get to a critical mass of both software products and software revenues, and then get to the point where enough software buyers were coming where it would start to become an active marketplace and we could actually start to generate revenue. So, that’s why it was critical to raise enough capital that we could make this resource available. And we were also following the consumer internet model, where most of the information on G2 is free, and we kind of put monetization later. But to be able to fund that business, we did then raise outside capital.
So, software buyers need to embrace software in order to transform their business, but they’re also skeptical of the sales process. How does G2 help buyers and sellers to connect and grow their businesses?
I think you’re exactly right, and at G2 we did a buyer trust survey last year. And we surveyed over 1,000 B2B buyers that were visiting G2.com looking for software. And we found that I think 94% of them don’t trust software company sales teams. Marketers can’t feel much better because 93% of software buyers also don’t trust marketing. There’s a deep mistrust of the technology industry, and I’ve been guilty of this as well as a software vendor. My company was acquired by Salesforce. And companies like Salesforce are presumably the best in the world with marketing, just amazing events like Dreamforce, amazing beautiful customer videos where everyone’s saying, “I love Salesforce.” And Marc Benioff is the best industry visionary ever, where he goes on stage and says, “I give you all these amazing new visions.” But I think in reality there’s a lot of customers in enterprise software, it often takes years for those visions to be realized. And everything that they’re sold isn’t available when they actually turn on the solution, so I think that has led to that skepticism of software buyers. And I think it goes even beyond software. Right now our whole world is in a crisis of trust. And we’re certainly seeing that in politics right now. Can we trust our politicians? I think there’s a ton of skepticism there. Or recently with Mark Zuckerberg and Facebook, can we actually trust these technology giants?
Can you say more about the trust crisis and how it applies to software?
I think society is in an overall crisis of trust, and it certainly also applies to the world of software, which arguably has been sometimes overmarketed and underdelivered. We believe who people do trust is their peers, and it’s really only their friends. Ultimately if we really want the truth, it comes from a trusted peer or trusted friend, and for G2, for business software, we always thought it’s going to be a peer in your industry who you’re going to trust for advice on anything professional, including what software you use. And really, that’s what we enable with G2: You can find a kind of professional peer or someone just like you in your professional context that you already have a relationship with, who you know and who you trust.
Could you say a bit about G2’s relationship with LinkedIn?
One of the things we also did with G2 from the beginning, we have partnered with LinkedIn. And LinkedIn is one of our ambassadors. Because I think the reality is, especially in the technology industry, most of us, we do use LinkedIn for our professional networks. And that tends to be the group of people we trust professionally. And so now in G2, one of the things you can do, you can filter reviews based on your first-degree LinkedIn connections, because ultimately, those are people you’re really going to trust and you can see what technologies are they using, what technology stacks are they using, what do they like, what do they dislike. And then you can also reach out, you can obviously see what reviews are doing, you can see what stacks they’re using. But then you can also reach out to them directly—let’s say via LinkedIn or via Messenger to get more color. It’s like what’s happened with employee references, where Glassdoor has emerged to give prospective employees insights, and that’s much of what G2 is doing. But also I think the other thing that people do with prospective employees, they tend to reach out on LinkedIn. So before you join a company, you’ll figure out somebody in your network that already works there and ask them, “Hey, what’s it really like?” And then — so that’s sort of how we think software buyers and vendors can establish trust, it’s all through peer networks and seeing what customers say about these products and what their peers trust.
Do you have any sort of quantitative information about how many people use LinkedIn for that process or how much it contributes to people’s trust or their likelihood to buy a certain type of software?
Yes. On G2 we have over 4 million software buyers a month coming, and it’s almost up to 5 million a month now. And we have also done our own buyer trust survey, where we’ve also asked those buyers, “Hey, what do you actually trust? And what is interesting?” Number one are independent product service and review sites, and so we are seeing that this is helping trust. And I had mentioned LinkedIn, which on G2 is integrated, where we bring over the LinkedIn profiles into G2 so that gives you the professional context on the person, who they are, you can see their picture, and you can see if you’re connected to them, how you’re connected to them. And so, it’s that combination of unique content on G2, with the peer network through LinkedIn.
How does the review process work? How do you find the reviews, and how do you choose which ones to put up?
G2 has a research team that verifies all the reviews. To publish a review, we require you to authenticate yourself with your LinkedIn profile and/or your business and work emails. So, when we validate a real professional: Are they who they say they are? Do they work for the company they say they work for? Are they a real person? That we think is a foundation for trust. With the internet in general, I think the worst part is always anonymity. So, all of our users are G2 users, they have to authenticate themselves with their professional identity. That’s kind of step one for building trust. And then step two, our research team validates that they’re a real customer of the company. And then the third thing we check for is, “Is this a high-quality review?” We do reject almost 30% of the reviews that are submitted on G2. We now have over a million reviews, but what we do, either due to suspected fraud or a review just not being well-written, in that case, we’ll go back to the user, ask them to enhance it. If they don’t, then we won’t make it live because we want our providers to be able to trust the reviews that appear on G2.
G2 has been known to compensate users to leave reviews, and I wonder if that incentivized more junior employees at certain companies to participate? Have you noticed that at all?
We do have a mix. Some of our reviews are organic, where people just come to G2 and share, and sometimes we do provide, we call it a thank you, because our reviews are also much more in-depth than a consumer site review. Because we do, in addition to asking the basic questions on G2 in a given category, like CRM, we’ll also ask 30 specific feature/ function type questions. It does take about 20 or 30 minutes, so we will sometimes provide a thank you, which could be an Amazon certificate, or sometimes it’s a flag or some kind of recognition. But as I said, we do validate 100% that they’re real. And we’re doing that to get the flywheel started— sites like Yelp have done the same thing when they go to a new city. They will kind of pay people in that city to get the initial content going and that’s what we do when we’re going to new categories or new products. And our research team will do outreach on social media because typically on, let’s say, LinkedIn, you can see if people have skills in a certain application, and we can target them and ask them to contribute content, or on Twitter, you may be tweeting about these applications. So that’s how we find them. And we use that to receive the content, but then we find once we have enough content, sorting for applications like Slack, now there are well over 10,000 reviews and certainly, we don’t provide any incentives for those.
“The average mid-market company is running over 90 different SaaS applications, and that’s growing 20% every year.”
What do you look for in a review? What do you think helps customers the most? What do they want to know?
On G2 we have the basic questions, starting with, “Hey, what do you like about this application?” But we want them to be balanced, and so we say, “What do you dislike?” or “How can this app get better?” And I think that’s true of any business solutions—even if you love them, there are always ways they can get better. It is also very important to ask, What business problems are you solving with this product, and what business benefits are you realizing? Because in reality, with business software, we’re trying to do some job, and so, What job are you trying to do with the app? That should help you do that job and list the business benefit you’re getting. And then the final question that I always ask is, “What would you recommend to others?” Because I think most projects in business, usually once you do it, you say, “Oh man, I wish I had implemented it differently and I had considered this now that I’m actually live,” and so we want to make sure people share those learnings as well. And then there are the feature/function type questions, which are pre-defined by our research team. For example: How good is the mobile app? How good is the integration?
What size businesses are people coming from? Is it a range, or mostly larger or mostly medium-sized businesses?
We get a range — about a third large enterprise, probably about a third for mid-market companies, and a third from SMPs. I think it’s one of the great things SaaS has done: It has democratized software where there are so many apps like Slack, being used by startups, small businesses, but now, large enterprises around the world are also rolling out Slack. I think companies like IBM are going to 100,000 employees with it. The trend on SaaS and software is that the same great apps are used by small, mid-sized, and large companies, and that’s also what G2 supports.
Let’s talk a little bit about expansion. G2 has raised $100 million to invest and expand operations. When you acquired the Indian company Siftery in 2018 and relaunched it early last year as G2 Track, what was that process like? What are some of your plans to expand further?
Overall, I think it’s gone very well, and I think the key to acquiring a new start-up is having good alignment on vision and value with the founders. I think with Siftery, we did have a very similar vision as the founders, where they also wanted to make it much easier for software buyers to find software solutions they can trust. But their vision also went a step further, and what we’re really excited about now with G2 Track is it also builds a whole application to track all your SaaS spend and track all your SaaS apps. Because the problem they saw is that most businesses today are running hundreds or even thousands of SaaS applications.
With G2 Track, now we track how many SaaS apps our Track customers are using. Track is more for mid-market companies, and I think now, the average mid-market company is running over 90 different SaaS applications, and that’s growing 20% every year. So we expect in three or four years, the average midsize company will be running, let’s say, 150 different SaaS and cloud apps. And then I think that challenge is even more pronounced in the enterprise area. So Netskope, the security software vendor, publishes a study every quarter that says the average large enterprise now is running 1,295 different cloud apps and services. And the reality is, for most CIOs and CFOs now, that’s overwhelming. They don’t know what apps their business is running because every department, every team buys their own apps.
The same Netskope study says the average marketing team is running 120 different marketing apps and services. The average HR team is running over a hundred different HR apps. It’s really just proliferating. And although it’s wonderful for the user because they can get all these purpose-built apps, it’s also scary for the CFO and CIO. Because one, they’re wondering, “Is there wasted SaaS spend? Are there are SaaS applications we’ve subscribed to that we’re not even using?” That’s one of the things G2 Track can tell them. Not only do we check what apps are they running, but we also will go into their usage system and try to do something like Okta or Google Single Sign-On, and we can see, are you using these apps? And we can also tell them, “Is this the best practice technology stack?” Because based on all the reviews now, over a million reviews we have from similar companies, we can also tell the company, “Hey, are you running the best practice stack? Are you missing some great apps? Should we be thinking about apps like Slack that maybe your business isn’t using yet? Because your peers love them.” And so that’s really what we’re excited about with G2 Track. It goes to the next level in providing the software buyer a full assessment of their technology stack. Are they all apps they can trust? The other element we’re building in is a G2 compliance hub. And so we can also tell the CIO or CFO, “Are these apps GDPR compliant? Are they SOC2 compliant?” And we’re looking at over 50 different certifications around security and privacy to see: Do these apps meet these standards? And so we can also really help the CIO or CFO from a compliance standpoint.
These are all exciting new features we’ve been able to roll out with the Siftery team. And now, we’ve rebranded it as G2 Track, as the SaaS tracking app, and we’ve also relaunched the other part of the G2 stack. It’s ready-and-go benchmark technology stacks. And those are Siftery solutions we’ve successfully integrated. I was in Bangalore in January visiting our team there. When we acquired Siftery, they were a global company. Their founders were in San Francisco, but most of their team — they’re about 20 people in Bangalore. Now we’ve built on that where I think we’re up to almost 60 people in Bangalore. And I was there because we were also launching G2 for the Indian market. I went to a conference called SaaSBooMi, where there were over 600 Indian SaaS software entrepreneurs. And there are really some exciting SaaS businesses starting to emerge from India — companies like Freshworks, which I think is about to go public. They’ve just raised money at, I think, almost a $4 billion valuation. They’re growing very rapidly and that’s now inspiring the next generation of SaaS product companies to come out of India. So we see tremendous excitement there. We’ve built a team not only to help us develop our global solutions from Bangalore but now we also have salespeople there, customer success people also serving the local Indian SaaS software buyers and entrepreneurs. And so that’s been the other exciting thing: With $100 million, we’ve been able to make this acquisition but also turned it into a global hub in Bangalore.
On my way back, I visited Singapore. We also have a team in Singapore to work with SaaS software buyers in Asia. And we also launched a team in London to serve software buyers and vendors in Europe. And that’s the other thing I think we’re seeing with SaaS and the cool thing about the internet in general is it’s instantly global. And that’s something I certainly saw with all the SaaS vendors in India. Their ambition is to be global and to serve customers in the U.S. and customers around the world. And they probably have even more of that trust challenge that we talked about earlier because if you’re a software startup out of Bangalore, how do you get U.S. software buyers in San Francisco and Chicago and New York to trust you? What we see also works for them is once they get their U.S. customers tied to their LinkedIn profiles to write authentic reviews, then the best way for them to gain the trust of more customers is through their G2 reviews. And so this is becoming a global trust platform for SaaS products.
“Now, with AI, we’re also able to make more and more sense of the data on G2. We’re starting to use natural language processing to find the themes.”
How do you view the future of the SaaS market?
I think it all goes back to Marc Andreessen’s quote of software eating the world. Today the global software and SaaS industry have about $500-600 billion in revenue. But there’s an analysis done by Battery Ventures that says by 2050, it’s going to be a $6 trillion industry. So it’s going to get 10 times bigger over the next 30 years. Everything in every business now is being automated by software and by applications. And so we just see this massive growth of the industry continuing. On G2, we see more and more SaaS products listed. We’re up to about 77,000 SaaS products listed, and that has more than doubled in the past year. And those 77,000 products are across 1,700 categories. A couple of the newer ones in the past year or two are particularly exciting, categories like robotic process automation. That didn’t even exist three years ago, and all of a sudden now it’s the number one category in terms of growth on G2.
How did you articulate your vision for investors when you were germinating the idea for G2?
At the very beginning, the simple story was to bring the consumer model to B2B, but to enable it to be as easy to buy software on G2 as it is to buy a book on Amazon. How do we bring this consumer shopping model — easy discovery, trusted peer reviews — how do we bring that to our industry of B2B and enterprise software? And that was really the original story. And then I think investors liked the story. But as I said, we also had to fund the first $2 million ourselves because they were also very skeptical, way back in 2012. The turning point for us was when Accel, a leading Silicon Valley VC firm, wound up coming to us. They had previously invested in companies like Facebook, but also a lot of the amazing B2B companies like Dropbox, Slack, and many of the most successful software businesses. They started seeing all these early-stage entrepreneurs pitching and using G2 and G2 reviews and our G2 grid. That’s validation. I think they saw the vision with us, and they could really help accelerate innovation in our industry because — and that was my other personal passion as an entrepreneur — I think most of their entrepreneurs also didn’t want to wait 10 years to be in a Gartner report. They wanted real-time validation; they wanted their customers to speak for them. So when Accel came to us in 2017 and said, “Hey, we’d love to invest,” that was when we really started to accelerate the business.
Can you talk about buyer-intent data, which tells companies if users are shopping for their product or comparing it with a competitor’s product?
Buyer-intent data enables software vendors to see which companies are shopping for their type of solution. And obviously, from a privacy standpoint, we don’t share which people. But it’s this broader theme in our industry now of account-based marketing where you can see which of your target accounts are shopping actively right now in the market. We recently announced a partnership with LinkedIn, which is an integration to LinkedIn matched audiences where you can then target the personas at the company that you know. Let’s say you’re a CRM vendor at Salesforce and you want to target people looking for a new CRM system on LinkedIn. You can automatically target that audience and provide them relevant customer content: Hey, here’s sponsored content from a peer using Salesforce CRM, here’s why they love it. That really will get their attention. It allows marketers to be very targeted about reaching out to the companies that are actually shopping for that kind of software, rather than kind of reaching out to everyone.
You’re in hyper-growth mode and working to capitalize on this platform you’ve created, this space for people to understand what it is they’re buying. What are your plans in regard to scaling your efforts to keep up with your most ambitious goals?
We’re up to 77,000 SaaS listings and that’s just about doubling year over year. I think last year we added 380,000 software listings. So that’s really about a rate of 100 a day that is being added to the platform. And then also very important — we’re bringing in more and more software buyers to find those applications, and that has also been roughly doubling year over year. Earlier this year, we were at a rate of over 4 million software buyers coming every month, and we expect to be able to double that again this year, so that by the end of this year, we’ll be having about 8 million software buyers coming to get insights and find software applications they can trust to make their business better. And then last year, we did two acquisitions, we added all these new offices. I think this coming year is going to be more of a year of smart growth. We’ve done so much expansion the last two years, we’ve gone from 100 to 400 people. Next year there’s going to be a little bit less hiring and more of a focus on: How do we now get everyone productive?
And I think a key part of that is now, with AI, we’re also able to make more and more sense of the data on G2. For example, for products like Slack or Salesforce, there are over 10,000 reviews and no human has the time or desire to read 10,000 different reviews. So now we’re starting to use natural language processing (NLP) to find the themes, so we can also tell you, as a software buyer, here are the themes across the 10,000 reviews of people that say what they like, what they dislike, what business problems they’re solving. And so I think we’re going to use AI to draw much better insight. We can even do that by industry, where we can say: If you’re a manufacturer versus if you’re a retailer, here’s what the reviewers are saying and here’s the insights for you.
Do you consider your market position alongside Capterra as a duopoly or are there other folks in the marketplace who are doing similar things?
If you look in terms of where software buyers are going on the internet to find out about software, I think we are the two most visited sites now. I wouldn’t say we’re a duopoly. Certainly, there are other start-ups trying, and Capterra as, you might know, they’re owned by Gartner. And I see Gartner also has a lot of other properties, and they have their traditional analytics business. So we do see them ultimately being sort of the big incumbent in our world that we do want to disrupt with better insights, better trust. I think Capterra is also a different business model. Their business model is just like Google Adwords. You bid per click and if you’re a software vendor, the more you bid, the higher you show up in their default sort. Whereas G2 is really all about trust, so we don’t do that, and on G2, our sort is always based on the best reviews, what we call the G2 score. So it’s based on which vendor has the most, highest-quality reviews that will always show up at the top of our list. So it’s also a different business model philosophy where we want to show the software first that people trust the most.
But in terms of connecting buyers with software, G2 and Capterra are the leaders.
True. Yeah. The reality is most software buyers are starting on Google, and I think we’re very close in terms of where software buyers are coming the most today. But we believe our trust-based model long term is going to win. We’re also really working on building a brand around G2. Two years ago, we were still G2 Crowd, but we rebranded as G2.com because ultimately our goal is that business people around the world start to know and trust the G2 brand. And so rather than going to Google, they start just coming to G2.com. And that is a trend we’re starting to see: More and more of our traffic is direct. But the reality is also over half of it is still coming from Google and obviously, people going to Google are likely to see both G2 and Capterra. But we believe if we can be the most trusted and be the place that business people go, then ultimately, that’s our long-term winning strategy.
What are you doing to gain an even more significant position, both as a percentage of market share and in absolute terms?
I think goes back to building the most trusted brand and building a site that software buyers can trust the most and that software vendors can trust the most. And part of it is also going global first. SaaS is a very global industry, so that’s why we expanded globally. What’s going to help businesses succeed now is the right technology stack. Any business now, whether you’re a restaurant or a manufacturing tech company, you really have to have the right software stack to survive and to thrive. And that’s where we see G2’s unique value: We can really help all the companies around the world use G2.com to discover software, but then also use G2 Track to keep managing their software stack. That gives us a unique advantage and helps software buyers truly optimize their technologies, so they can succeed and reach their potential as a business.
We’ve talked a lot about credibility and trust as your foundational principles, and how important that is in today’s internet-connected world. And also how it’s been such a factor for G2’s success. What are your core principles for building credibility and trust within your company and also generally among users?
At G2, in terms of what we think is fundamental to building trust is our culture. We’ve defined what we call our PEAK culture, and PEAK stands for performance, entrepreneurial spirit, authenticity, and kindness. It was always buyer first. Ultimately, the only way we’re going to create something valuable for the world is if software buyers can truly trust G2 to have authentic content that they can believe in, so that the advice they get from G2 helps them run their business better.
Could you talk about how many reviews come from the U.S. versus globally?
It’s about 60% right now in the U.S. and Canada, roughly 20 to 30% Europe and then 10 to 20% Asia. We do also have a partner site called itreview.jp that we’re building. It’s a Japanese version of G2 that we’ve been building in partnership with SoftBank’s C&S as well as a Japanese site called IT Media that’s kind of a big IT site in Japan.
So how do you translate and articulate your vision for a new market like that? You don’t speak the language, but how do you go into a different culture and a different market and say, “Okay, here are the common threads, here’s what we do, how can we translate this to be most useful for people in your market?”
I’d visited Japan I was with Oracle and SalesForce, they have big operations there and I knew enough to know that I don’t understand the language, and to be at all relevant there we needed Japanese language content. And then I also realized there was no way we were going to do that on our own, so we wanted to have local partners and that was our strategy there with SoftBank C&S. We’re working with the original SoftBank C&S, which is a software distribution business in Japan. They distribute about 25% of business software sold in the Japanese market, and it’s very symbiotic. They saw what we are doing in the U.S. and probably like most things, they tend to come to Japan maybe four or five years later. Just over a year ago, we launched this site because they also believe this trend is going to come to Japan. They started out by localizing G2, so they translated a few thousand reviews that we had on our American site, but now they’ve also been recruiting local content. And they’re up to about 30,000 reviews, of which I think 25,000 were Japanese original reviews written by Japanese people. And so that is exciting, that was an extraordinary strategy for Japan. And it’s something eventually we’ll need to tackle for other markets as well to localize the content.
“We’d love to help software buyers everywhere in the world.”
That’s really cool. So, is there anywhere else that you would dream of conquering? Where is your dream market?
I’m originally from Germany, I was born in Germany, and I think the next markets for us are the big European markets like Germany, like France. I think they would be next on our list for localization because they’re also big, big markets for business software. And then, I certainly think Spain and Latin America. Those will be the big next opportunities. And then, who knows? In the five-to-ten year future, I’d love to see how the world evolves politically, and obviously, these are not things we can control. But eventually, I’d like to also serve China because there are a billion and a half people there, and their economy has grown quite a bit. So yes, if the political climate allows, we’d love to help software buyers everywhere in the world, including China.