Sreedhar Peddineni: AI Won't Replace GTM Teams — But It Will Replace Weak Ones

Business.

Business.

Business. Business. Welcome to Go to Market, a podcast for RevOps, sales, and marketing leaders to dive deep into industry insights and best practices. Go to Market is sponsored by Fulcast and Silicon Slopes. It is my absolute privilege to welcome Sridhar Peddineni, founder and CEO of GTM Buddy and co-founder and original CTO of Gainsight to the podcast today. How are you, Sridhar?

I'm doing great. Thank you so much for having me here.

Oh my goodness. It is such a privilege. You are an absolute icon. I am fangirling all over the place. It is so fun to be able to talk to you. You have achieved success acquisition multiple times, and I just can't wait for all of our listeners to learn from you about kind of the state of the market today and where it's going. So let's get started. Tell me a little bit about your background for those of us who want to know all the other things as well about how you got started.

Great. I'm over 50 years old. I'll start with that disclosure, I guess. What that makes me is a person who's been around the block for 25+ years. And over this time, I've had the fortune and privilege of being part of 3 company building journeys, if you will. So the first one started off back in 2000, along with my partner, Jim Eberlin. Founded a company called Host Analytics, where the idea of SaaS itself was, was quite new. World was used to buying software and from there the world was moving towards renting software. The current terminology for SaaS was not yet widely adopted. Building in the space of financial planning consolidations, selling to the Office of Finance, to the CFO. It was quite a journey. That was sort of in my late 20s. And I tell everyone that, you know, I consider that first 5 years of that as my primary schooling, if you will.

Yeah, absolutely. When you get into a startup for the first time and you have to dig deep and figure out what to do when the chips are down, there's no other learning environment like that.

Yeah. Yeah. And learned a lot from my partner, Jim, and from our customers mostly. And Jim being who he is, he was able to sell the vision of where we are going. And then I would come in and, okay, we didn't yet have the product at the time and figure out what's the right thing to build for the market.

I love it. You know what? That is such a CEO move to sell the product vision and be like, and now Sridhar is going to do it for you.

So there were days where I used to live in India and fly into Minneapolis for one night. To save a customer, you know, customer realizes that we didn't yet have the product and so on. Many, many stories to tell, still very, very close to my heart. And as a bootstrap company, we already had gotten into Forrester Wave and we started getting into Magic Quadrants and so on. Raised our capital in 2008, Series A, and a number of people from Oracle. Oracle had acquired Hyperion. And Hyperion was the gorilla of the space in terms of on-premise version of it. And Anaplan was still a very, very young company. I think they were born around that time frame. They came in from behind and beat them all.

Anaplan did a wonderful job. And in fact, one of our biggest customers is Anaplan.

Okay. Okay.

That's great. We know them very well. Yes.

So we competed with Hyperion, Business Objects, Cognos, and God, that makes me feel really, really old now.

Well, you know what's funny, Sridhar, is that you're 50 and I'm 49, so I'm right there with you. We've seen some battles in our time.

Yeah, we have many scars, right?

That's right.

So, as the company was scaling, a number of people, Oracle execs, John Kondo, Gary Damiano, multiple people joining the journey. So as Host Analytics was scaling, you know, we started seeing that, okay, we started doing well and we are adding all these customers. And then you start seeing that, okay, you're also losing customers. Okay, there's a leaky bucket here, right? And the state of the union back then was, you know, we all used to do Net Promoter Score surveys. That's the state of the union. And CSAT surveys. Okay, we are looking, listening to our customers. Voice of the customer is basically about that survey that we used to do.

Yes.

And then we started thinking about, okay, there has got to be a better world about as a subscription-based business, we need to more proactive about retaining customers. And this is the CSAT and NPS, I would say, are not going to cut it. With that idea in mind, we started thinking about the problem statement deeper. And one thing led to another. In 2011, we ended up— again, Jim and I partnered on this journey as well to launch Gainsight. And when we launched, we were the world's customer success— first customer success platform, if you will. And okay, But you look around and none of the potential buyers had customer success function even.

Wow.

Wow.

That's wild. I did not know that.

In 2011, like, you could count the number of companies on your fingers. You could count the number of companies that had a function called customer success.

Wow. And now it seems like it has always existed and you could never even function in your go-to-market without it.

Yeah, yeah. It's wild when you think about it. And there were some companies like, you know, Marketo was going public and went public in 2012 and they realized the need for the importance of retention and they had hired Dan Steinman and he was the head of customer success. Were able to convince Dan to buy Insight, which was called Jaber Software back then. And Informatica was launching their cloud business. Were able to get them and exactly, and so on. One thing led to another, and in 2013 we ended up raising capital, and Nik Mehta came on board as a CEO of the company and helped us raise a ton of capital. And the team that came in along with that, Anthony launching them from the marketing side, and the first Pulse event, and lots of investments in terms of branding and education and so on. Education was so important in that category because most companies, even going into 2013, '14, '15, companies were still thinking about the customer success function. Should I create a new function? Should I hire a CXO, Chief Customer Officer? Is this a thing that we want to do?

This is in 2013, '14, and '15. So this is only 10 years ago. Yeah, yeah, that's wild.

Yeah, yeah. And, uh, with all these events that, uh, Anthony and, uh, Nick put together with, uh, Gainsight became a brand and we're punching way above our weight in terms of, you know, company was small, but we knew of Gainsight. Okay, what is this tiny company doing and all of that? The power of marketing. Yeah. I'm preaching to the choir here, Amy Cook.

I love the power of marketing discussions. I agree with this. Yeah.

So gradually it became a motion and customer success became a thing. Other companies which were talking about, you know, product analytics, I think Totango and Blue Nose Analytics were talking about product analytics and they, they pivoted into customer success. Other vendors came to be and so on. And I went through the full ride and eventually in 2017, my first company Host Analytics got acquired. In 2020, that was a private equity acquisition by Vector. And in 2020, Gainsight got acquired again in a private equity transaction with Vista. Took a sabbatical for some time. I thought I'm retiring now. But I was in my mid-late 40s, I would say.

You were too young to retire. You had too much left to do. Yeah.

Tried doing different things, but realized that, no, I still have it in me to build another company. And then I started thinking about what do I want to build? And that kind of led me to, you know, several parameters that I was thinking about. One, I did not want to create a new category. And creating—

She was like, no thank you. We don't, I don't need to go through that again. Let's stick with a category that has been created.

Yeah, yeah, yeah. And the primary reason is like when you're really talking about a new category, true, true, true new category, it really implies that there's no budget line item. There's nobody who is in the market looking for it.

That's the problem is when you're too far ahead of the market, people are like, I don't know if I need this. Like, why don't I do, our Fulcast story is kind of similar actually. Bala Balabaskaran, who was the head of RevOps at Salesforce, built the original Fullcast because he was so frustrated with getting territory plans out that took 6 months, a team of 100, 2,000 spreadsheets. And he was like the first ever on time, on budget at Salesforce. But it took so much out of him. He was like, there's got to be a better way, right? So he built this future state when 84% of people are still using spreadsheets to plan their territories, right? So he's— he was ahead of the curve. And it's taken a few years for the market to catch up to understand why it's so vital. And then at the same time, we're now like launching the commissions piece of it to go along with the plan-to-pay vision. So all that to say, I understand what that's like, trying to convince people that they need it.

Yeah, yeah. And for every success story that you have, including Fulcast here, there's so many stories that are not told. So even if a company generates some investor interest, raises some capital, that capital sometimes can be even like $30, $40, $50 million raised, and the category goes nowhere. You know, I've seen too many categories, founder friends and so on. The category size is like $30 million. Yep, you have built a successful company. It's like $20 million, not going anywhere.

Your TAM's got to be big enough to justify it.

Yeah. So didn't want to be in that. So it's looking for, okay, what's the other thing in terms of, okay, the category has some— AI was already a thing. I've been talking about AI for 20 years, but for glorified predictive analytics or rule-based modeling, we call it AI. So to be fair, back in 2007, '08 timeframes, we would do a—

Like IBM Watson and teaching him Jeopardy and all the early days, right?

So when I looked around, there's one category that really caught my attention. That's that category back in the day, it was called digital content management for sales, which is now part of enablement, revenue enablement, right? So there were really significant companies in terms of, you know, Highspot, Seismic were the market leaders. There was Showpad and Bigtincan. And looks like all of these companies are almost as big as Kainset or even larger. And if I were to add it all up, It was already a billion dollars on technology spend, leave alone the people spend and all of that. And it's not a glamorous category at all. Nobody really talks about them, you know. When I go out and say, okay, I'm part of Gainsight's journey as a co-founder, I get some amount of recognition. But the same thing, probably that same recognition is not there with, with Highspot, with seismic. Takes nothing away from their success.

No, absolutely. They're, they're like the giants of the space. Space. They're amazing, but you're right, they have not received the, the same share of attention in the market when it comes to publicity, for sure.

Yeah, yeah. I think it's about the category itself is not glamorous, if you will. That's part of it. It's just boring job of, you know, I'll take 1,000 files or a few thousand files, I'll organize them into folders, call them spots, call them whatever name, and I will create tags, and all in the hopes of my search is going to be better. Reps not using the content that our marketing is producing. And sales and marketing alignment is the problem statement that we solve for. So you've been there, you know this.

I know exactly what you're talking about when the sales team says to me, we don't have a one-sheet for this. And I'm like, I created 5 versions of that a year ago, but my distribution wasn't there. So that's the— these companies are essential. For that alignment. Yeah.

And parallel to that, there were e-learning course providers and they said like, okay, LMS itself is commoditized. So I would do, you know, LMS for sales. Salespeople tend to spend more money. So I would add some little features to that and call it, you know, sales readiness platforms. Sales LMS. And this was the state of the union. I said like, okay, look at the CMS side of the world. It's like $1 billion spent, attractive. Look at G2 review. What's the number one problem statement? I love these platforms. You know what I have? This biggest problem is I can't find content.

Mm-hmm.

So that's kind of, you know, got me really, really interested.

Got you thinking about it. Yep. Yeah, absolutely.

So then one thing led to another and started digging deeper in terms of, you know, I would— people used to get this content in and they would create their taxonomy, if you will. And then I would manually map these tags into this, against those documents, all in the hopes of such being working well. And the tagged taxonomy deteriorates the moment the person who tagged the first time moves on and the second time comes in. They just added a few more things. The content deteriorates and there was not enough of intelligence in this whole thing. In 2021, natural language itself, NLP, NLU, whatever you call it, was advanced enough that you didn't need to manually type content. So what we started with, okay, well, let's build an ontology layer. Fancy way of saying that, okay, this is my language of my business. Here are my competitors, here are my products, here is my domain terminology. Take all of that and use that to read every single word in every single document or a video, and AI would automatically tag them. And you have a semantic understanding of what this really means.

Yes.

Semantic and ontological understanding. What do you mean? Like, you know that, okay, if you're talking about Einstein, I compete with Salesforce in some level.

Right.

I'm talking about Salesforce and I'm not talking about Albert Einstein. So AI was advanced enough to do these kinds of stuff. So that's what we launched.

That's incredible. I love this. And when did you launch? How long ago did you launch?

So this was '22 is when the product launched. '21 is when we started truly building. And '22 is when we launched. And we had early success with replacements of Icebox and Seismic. That's good. And the world started changing. The GenAI starts coming in. And so we start, okay, it's no more enough to search for documents. I need to be able to ask a question and get an answer. That was the first wave of things. If I think about AI and how AI is getting adopted across companies, what ChatGPT taught people is that, okay, here is this worldwide knowledge corpus. And here's a chat UI. You were going to Google and searching for content and getting a bunch of links. You go to that website and hopefully find what you want. You can ask a question and you get an answer.

Yes.

And that UI became viral, as we all know.

As we all know. It's essential. It's amazing how that was, you know, like you started this company '21, like started building '21, launched '22. And even since then, even in just 4 years, the world has changed so much. So much. So, so now where are you at?

So, yeah, so we are now at over 100 customers and it's been a wild journey in terms of like I've not seen— I've seen like being— I mean, I've lost a lot of my hair now. I have been old enough to know that, okay, moving companies from on-prem to SaaS cloud was a big deal. Yes. It was a very big deal for a lot of people.

That digital transformation space created billions and billions of dollars of work.

Correct. Correct. Correct. And there was Y2K happening in the, at the same time.

Yeah.

2000, there was dot-com companies raising millions and millions of dollars. Yeah. Then the smartphone comes to be, then there's social media, and then there's birth of customer success where I had the fortune of being part of and all of that. Seen a lot of change.

Yes.

But the last 2 years seems like it's a blur. It just flew by.

Agree. The way that we are looking at software is so different now. It's a solution. It has to have the— there's no more empty containers that we can sell. There's no more, you know, we have to sell the answers alongside of the technology.

Yep.

And it is so fascinating to be able to watch how companies are navigating and pivoting. And I love that you have seen so many different aspects. Sridhar, you'll probably think this is kind of funny. I am a marketing, non-technical person compared with you. And back in 2011, I was the head of marketing for a large healthcare company, and I was the one personally that got everybody onto AWS. Isn't that funny?

Wow.

I was going in because all of the IT crew, they were all Microsoft guys and they wanted everything still on-prem. They had no interest in cloud. And I'm like, well, guys, I just put all of our websites up on AWS. And they're like, what did you do? But at the end of the day, that's what we had to do.

That was fun. That was awesome. 2011, you say? You said 2011?

I know it's late, right? But it had to be done. And so it's fun, it's fun to have experienced enough years in this industry to be able to, to say, you know, we've done the digital transformations from on-prem to SaaS. Now we're in the middle of this AI revolution. So What do you, what do you expect to happen in the next 2 years? Do you have any predictions?

Oh, absolutely. In terms of like, if I were to look at the last 2 years as any indicator of what's to come, it's going to be wild to an extent that it's unpredictable. At some level, it's going to be wild.

That's right.

Way down there. But you know, what gives me, you know, the hope from a, not not say hope is not the right word. What I'm seeing right now, Amy, is that while the technology is advancing so fast, we as humanity, I'm generalizing this a bit, we are slow to catch up.

We are.

And I'm talking about people in business, in executive positions and stuff. And, you know, we all read about, I see that there's a lot of fear about AI. And there's also a lot of hype about AI. And we seem to be spending a lot of time in terms of either the fear side of the equation or the hype side of the equation, but not as much in terms of the build side of the equation.

Interesting.

So it's like, okay, I don't know what's going to happen 10 years from now. Is AI going to take over humanity?

I think Skynet in Terminator 2 will become a reality.

I think Elon Musk talked about this in his keynote. Yeah, I think he talked about it yesterday or day before. He said like AI is going to kill us all. This was the statement that he made. I don't know about that, but what I do know is that if I'm not using AI to be my ally, I know that they might, it might become my enemy in the future. Maybe, maybe not. I don't know. But if I'm not a power user of AI as my wingman, then I am dramatically left behind. Dramatically. And the power of a person that's able to leverage AI appropriately, even the person intellectually is of average caliber, but figured out how to use the AI, can outperform 10 people with higher IQ levels any day.

Any day of the week. Absolutely right. I think about all of the, the strategy that I ask my favorite LLM. I think about— I use it as a companion. I use it as somebody to bounce ideas off of. There's some real advantages to that because then, you know, you can get the public knowledge base. And then that's when it— that's when real creativity is possible, right? You're not just playing catch-up with what the public knows. You're able to access it very quickly and then start saying, all right, what do I think about it? What is possible in the future? And I love that piece of it. I'm also not so rosy, especially after Anthropic's new model just got out and started bragging to everybody.

Yeah. Yeah.

It's possible. There's a bad portion of this that is possible. But I agree with you. We must use it. We must become power users. We must we must make sure that technology serves us and we don't serve technology. That's kind of my opinion. Would love to hear your thoughts on that.

Absolutely. I think there are people like, there are two schools of thought. There's so much happening. It's kind of becoming harder to maintain all of that context in my head.

Right.

Right, in my working memory, if you will. So on one side, we're seeing that people on LinkedIn, they still talk about, you know, hey, I came up with this cool prompt and this does this wonder. And you comment on this to get this prompt.

Yeah.

And that's so behind us. Like today the world is all about skills.

Yes.

And Skills is about 4 months old now, 4 months old now. And the Skills layer that Claude launched, Anthropic launched, it's become so integral to many, many software companies out there and the people who are building their own workflows in Claude. You can't think of a world where if you're not utilizing Skills, then you're not really taking advantage of the LLM.

Yeah.

And it's fascinating to see that so many people have not even tried Skillshare. And a lot of people have not even tried a co-work or take a pause out of intellectual curiosity to say that Anthropic launched co-work and the initial reaction, global stock markets crashed globally. Why? I'm talking about just curiosity. Yeah. And we talked about the crash and all of that AI is taking over. But the question in terms of why? What is possible with cowork that did they— did people get—

that made that happen? What, what is so different about what we have now? Why is this a horse of a different color that is completely different from The, you know, the, the internet, the computer, the social media, like this is a horse of a different color.

Yeah. So that's what's happening on one side. Sorry to interrupt.

No, no, no.

On the other side, what I'm seeing is that other extreme where there's so much of AI slop that's coming in. People who are taking this for, okay, I thought ChatGPT told me this and therefore I have, this is true.

Yeah, absolutely. So my, my uncle died this last week and I love him so much. We're going to the funeral tomorrow. He was a public figure. Thank you. He was a public figure, and I was trying to find a picture of him to post it on the internet. I found tons and tons of public— of, of pictures of him, and then I tried to find a picture of myself with him. And what I found out from the LLMs is that I am his sister, I am his daughter, I am We get even the most basic relationships, LLMs still are hallucinating a lot. They're still, they need to be double-checked and they're getting way better, right? But even that was a very good instruction to me that even the most basic public relationship database is still not accurate with the LLMs. And so we have to continually critically think. We still have to ask why. We still have to be on top of it, right?

Yeah, yeah, yeah, that's a great story. I think that that's a reminder that we all, the power users of AI, we all should be mindful of that. And it's become like my work— in my workflow, I would use CrossLLM to fact-check anything important that I'm doing. I would have a fact-checker job separate from the primary job that used to for doing research or creating something. And I would do, okay, build something with the, let's say, oops on Claude and in my IDE, I use IDE primarily, and I also have Codex installed and I would ask Codex to fact-check this. So it—

that's, that's actually, that's so, that's so smart. Such an important piece of that. I have one more question for you. When we talk about software and the future of software, we talk about Okay, well, the valuations are not going to be good with just wrappers around LLMs. Valuation.

Yeah.

Why are we even building software when, you know, we've got Replit and Claude and all of this? You, I, it's great to see you're still a believer of creating software. You're still the CEO of Go-To-Market Buddy. You're utilizing AI. What should people who are still in the software game do to capture the value of what AI can bring, but make, but make there a big enough moat so there's still valuation?

Yep. Great question. And there are many strong opinions on this topic. Thank you for asking it, though. Here's where I stand. What is causing is like doing more with less is becoming even more pronounced. That's a near global truth, if you will. We can accept it as a truth, especially if you're a venture-funded company, which we are. That pressure of, you know, do more with less, do more with less capital, less number of people.

Yes.

That's a universal fact. Now, in that, the second thing is the other universal fact is that people do move from company to company. There's always going to be— I'm talking about my business, the business that GTM Buddy is operating in. Where this— the GTM function continues to evolve and there's a certain amount of natural churn that happens. So the common problems of, you know, a ramp is something that's not going to go away. Yeah. So just because I have a cloud setup and I have a cloud project with all of my company knowledge base, I can't throw a new person into cloud project, go query, ask cloud project to teach you, and you become good at it. Not going to happen.

That's true.

So the business problems that we deal with, that's one example. The second example, every company is going through a massive transformation of their own in terms of what they sell to the market, how they service, deliver success to clients, and that product itself is rapidly evolving. Change is near constant. It was always there, but this is accelerated change has become near constant. So given these business realities, these business realities, these pains existed before, they have become even more pronounced now. Now the question becomes, how do we solve that? Is the solution that, okay, because the Anthropic and ChatGPT, OpenAI is going to eat everybody's lunch and everybody is going to go there and train their people and deliver the content, the right content at the right time, and so on. That's a mission. That's one question that I'm trying to find an answer to. My position, yeah, that the business realities have not changed. AI is something that can accelerate some things. I can do things that used to take a long time, I can do it faster. And I can do it without having 10 people, maybe I can do it with 1 person or 2 people can do it. But the problems that existed, those have not vanished. So my strong view is that the nature of software that we develop is changing. Like, for example, the traditional static content repository and static learning systems that existed in revenue enablement, they're still important. You still need to have a content repository of some sorts to manage some sanity. Versions and updated content and so on that is needed. Nobody denies that. Now, do I want to be known as a company that's a content management system? Do I want to be known as a company that's like sales learning system? No, that's something that I do. Yes, it's table stakes, but don't come to GTM Buddy and buy this because we have this fancy CMS and fancy LMS and so on. As in this age, we are putting ourselves out there in terms of how are we helping you to deliver revenue outcomes. You, anybody enablement initiative, how is it contributing to your revenue? That's what we started coining. I recall that I said I didn't want to do a new category, but we are talking about a category shift here. From a revenue enablement perspective, we are talking about revenue activation. In the world of revenue activation, how do I get enablement to move to support the sellers and the GTM teams in their flow of work? With things that were not possible earlier.

So, you're not changing the category. You are using, you're just shifting because you're moving from some of the basics of what AI can now do into some, into things that are really solving real business problems. So, if we look at it in a certain way, if I understand what you're saying, this, the AI revolution should be able to support software companies to deliver better value and be more valuable if we do it right.

Your marketing job's shining.

Well, thank you, Schrader. I'm just absolutely fascinated by this conversation. I know that we normally, like I told you, we normally, you know, do 15 minutes and that's it, but this is too valuable of a conversation, and I am so grateful for your time and all of the insights that you've provided today. I I'm so grateful and I'm excited to become a user of Go-To-Market Buddy, and it's going to be a lot of fun to collaborate with you. So thank you so much, Sridhar.

Thank you so much. Really, really appreciate it, Amy Cook. Privilege to be on your show.

Thank you again.