What's new at G2, AI, Marketing Spend, and More with Godard Abel + Jason Lemkin

Okay, everybody, it's Saster. I'm with one of my favorite entrepreneurs and CEOs, Goddard Abel. He has been doing SaaS probably for longer than we both care to admit, right? When I got into the industry in 2005, he was already a leading founder with a company called Big Machines. You probably haven't heard of it, but it was so early in the world of SaaS and cloud, and then they sold for like $400 million. I think it blew my mind back in the day that anyone could sell the company for $400 million, right? Before we had any unicorns. And then he went on from that and did a bunch of things, founded multiple, I think like 3 companies after that, right? Is that right? I think we've had 3 after that.

Yes, depending on how you count them. But some obviously not 2 as CEO and a couple more where I'm exec chairman.

And then G2 is interesting. We're gonna talk about G2 today because everyone either has used G2, is a G2 customer, looks at the research, has at least written a review. I'd be shocked if anyone that doesn't watch or read this hasn't participated in G2, but I wanna go a little bit deeper and learn some things. But Just for fun, I remember when I was still running EchoSign, now Adobe Sign G2 was there in the beginning. So you had this vision. It's got to probably been over a decade, right? So what was the original vision and how is it— I mean, a decade's a long time. How has it evolved differently than you thought?

Yeah, well, we did start all the way back in 2012. Yeah. So it has been over a decade and honestly, it was a long, slow slog at the beginning, frankly, so slow that I went to found SteelBrick and built that and sold to Salesforce before coming back. And during that time, my co-founder Tim Handorf, who was our head of product originally, he did a great job actually scaling the platform, getting it to critical mass. But what did take a long time was to actually get people to write reviews. And I remember at the beginning we thought, oh, great idea, we're gonna build a Yelp for business software.

Yeah.

And, you know, I think we were all, I'm sure you were, we were all frustrated by the status quo of our industry, which was Gartner. And particularly when we were building Big Machines, I just remember we did start all the way back in 2000. So I've been building SaaS companies now 23 years, but I remember it took us, took us 9 years to get in the Gartner report. Yeah. And actually, I remember, I think 4 years in, there's a Gartner analyst wrote a report that said like CPQ is dead, Oracle and SAP own it. It's over. I'm never writing another report. So that wasn't helpful. And then, but they finally, eventually they came back with a sales configuration market scope. And I think we were finally mentioned in '09, 2012 became a leader. So it took 12 years. And frankly, like, that also wasn't the favorite part of my job, you know, briefing analysts, frankly, is the least favorite part. And so we just thought, and we were spending about $100,000 a year with them, and we just thought, wow, this kind of broken capitalism, you know, where you're paying a lot of money to somebody, you're paying them to speak at your conference, you don't necessarily think they're that interesting.

Yeah.

You don't really necessarily value their strategic advice, but you have to pretend, you know, you have to play the game. And we played the game because it was important and eventually it worked, but we just thought there had to be a better way. And also for software buyers, you know, and I think also 2012, that's actually when Marc Andreessen said software is eating the world.

Yeah, I'm still trying to figure out what that means, but keep going.

Yeah. Well, and then I like to say the world needs a buffet of software. And, you know, GT was that buffet. And then just like for food at restaurants, right, we thought user reviews were missing. And that was my other story about the traditional analyst. It's like, you know, it's like asking, They're like restaurant critics that can't eat the food. They're standing outside the restaurant saying, hey, Jason, how was your meal? You know, they interview customers, but they can't actually eat the food. So we're like, hey, why not just ask the diners, the users of software? And we just thought our industry needed it. But it was also a hard business to start because I remember I went early on, pitched some like early stage VCs, angels. They were actually all very skeptical. You know, they're like, oh, this isn't just another SaaS thing. How are you gonna make it?

Gartner was huge back then. Gartner's always been huge, right?

True. And they've done very well. You know, they're a very well-run company, you know, and I think that's also good. I think they're the big incumbent and, you know, they've, I don't know, like a $20, $30 billion market cap. They keep growing, very well-run company. But yeah, but we still think their insight model is more of a legacy model. And we just thought, you know, we want to give software buyers a site where they can discover the right apps. And that's also become, I think, a huge challenge now. And partly thanks to SaaS, there's so many There's 100,000 on G2? Over 100,000 listings.

So that we can consider a dispositive number because those are all real apps. There's 100,000 paying revenue generating SaaS apps at a bare minimum, right?

Yeah. They're not necessarily all paying. I mean, most of those listings are free.

No, no, but they are revenue— they probably wouldn't be revenue generated and they wouldn't be on G2, right? Folks that probably have a million or more ARR.

We validate they're real apps with real features. And so, yeah, there's over 100,000 real SaaS apps out there today. Which is obviously just phenomenal. And I think it does also create a challenge though for the software buyer, you know, because odds are there is a purpose-built app for you, Jason, for your industry, for your business function, for your business problem. But how do you discover it? You know, and then secondly, how do you trust it? And those are really the problems, you know, we, we set out to solve at G2 when, when we started.

Have you, out of curiosity, have you done interesting— I think the answer is yes, but that second tier of apps, right? You know, when we go back on the, you know, going the, the, the classic Gartner Magic Quadrant. All you do is look to the upper right, and that happens at G2 as well. But I'll see 100 apps or 200 apps in a category. Do you boost that second category? Because that's always this weird elusive area with the big analysts, right? Is how do I take advantage of it if I'm not yet that number one, if I'm not the G2 or the HubSpot or the Salesforce?

Yeah. And actually right now I'm looking at eSignature just for fun, Jason, to go back to your old world, and we have 332 listings. Yeah, e-signature software.

And, of course, does it help number 8? Does G2 help? I mean, I know it's, it's, it, you're selling this, but how did, but I think that discovery of number, everyone, 332 always wants to get into market, but I find that the 8 to 20 is the toughest part sometimes to be, isn't it?

True. Yeah. And I think what we do, we wanna help the seller, but of course, we wanna help the buyer. So I think one unique thing and the problem like Gartner, Forrester, they publish like one wave, one quadrant. And it's one document. In other words, G2, it's all digital. So of course you can start to filter like, hey, I'm an SMB, I'm a mid-market company, I'm an enterprise. So you can filter by company size, by industry.

Yeah.

And so then that obviously helps the buyer because, you know, some of those 10 to 30, they might be the best, I don't know what, Hospital Signature, or I'm making this up.

Yeah, vertical.

Be the best for a vertical. They might be the best for SMBs, they might be the best for enterprise. So the whole idea by having a data-driven platform, you know, versus an analyst is that the buyer can dial it in. And I do think in terms of also what's new at G2 and obviously in the world, you know, generative AI. And we also, we have launched a G2 AI Monty this year. It's powered by ChatGPT. And I actually think that's gonna be one of the best ways to, you know, discover the long tail apps for software buyers because more you can just put in your requirements. And frankly, today, probably people know what e-signature is, right? But maybe 10 or 20 years ago, people didn't even know what it was. Yeah. There's like saying, hey, how do How can I close my deals more efficiently? And, you know, then with Monty, Monty can ask more questions. You have to sign up for Monty so we know your company, your industry. But then with Monty, we can actually guide you based on the business problem you're solving to the best app. And you may not know what category because that's the other challenge on G2. There's over 2,000 categories now on G2 as well. And the reality is most software buyers don't necessarily know what category to look in. They just know I have a business problem and they know their context, their industry, their company environment. But, you know, they don't know what, what app or even what category of apps helps them. And that's where we are excited about Monty can actually, based on a conversation about their business problems, can actually guide them to the best apps. And I think it also leads to more long-tail discovery because, you know, if that business buyer has some problem you uniquely solve for some vertical, let's say, you know, Monty will, will recommend it. And so we're really excited that, you know, I think that will make long tail discovery a lot easier.

It's interesting. And do you need, if there's 100,000 apps plus in general and 2,000 some categories and the average buyer maybe buys 200, right? I get why you would absolutely want an agent, right? Something like Monty. Why do you need for real? Why do you need ChatGPT? Why couldn't it have been architected with some other database or language model because you don't need to pull in everything from the internet. You have enough data on G2. I only need the G2 data to get good answers, don't I?

Well, kind of, kind of. I mean, I think, you know, we have tried for over 10 years to build like guided buying experiences, if you will, filtering based on industry and company size, etc. But honestly, none of them ever worked great. And especially, I think a lot of insight in G2 reviews also, we ask a bunch of structured data questions, you know, like one category will ask, like eSignature will actually ask like 25 different questions, mainly structured data plus unstructured data. Like, what do you like? What do you dislike? What business problem you're solving? And I think actually where the AI is good is the unstructured data, you know, so you can just use words like, you know, we can match, hey, this business problem that someone's looking to solve that matches really well to these apps, for example, regardless of category. And I do think for all software, it's just a better interface, you know, than like forms-based querying and searching. Which is almost all enterprise software today. And frankly, traditional search, including the search on g2.com, like if you go to our search box, honestly, it kind of sucks. Yeah. Because that's all the problems. It's a big problem. Yeah. Search is a big problem. It is. And frankly, also on G2, when I wanna search G2, I use, I go back to Google and we have great SEO, but our insights search is bad. I think it is on most websites and most apps, you know, so I, I do just think conversational AI, a much better interface, to discover apps on G2, but really to discover anything, you know, and the nice thing is you're not forced into like a forms-based structure. It can have a Q&A that feels just much more like, frankly, you're talking to Accenture consultant, you know, but, but I think the advantage Monty has over Accenture consultant might be like, hey, I'm really deep in CRM for telcos and they spent their career there and you could probably ask them any question about CRM for telco and they would crush the answer. But you know, but the advantage Monty has and AI has, right? He can learn on everything. And I actually think that generalized knowledge from the internet helps as well. And that's why we build on top of ChatGPT just because like for the human nature of the dialogue. And then we train Monty, we inject our data. We also train it on software Q&A conversations. We're still training it. It's still in alpha. And I'd love for you all to try it. You know, it's available on g2.com and obviously we take your feedback. So we're still dialing it in, but it's honestly like I think super promising. And I do think it will be a much better way to guide software buyers. To the best apps for them to consider.

Yeah, it is. It is interesting because, I mean, G2 does a lot of interesting things, but in my personal experience, you know, about 80% of the advice I get is either bad in quotes for apps, it's biased, or it's just to buy the number one, right? Which, which is fair, right? I mean, it's to do the brand.

So number one, yeah, usually is safe, right?

So safe, right? Like safe on many levels. I think these days it's not just safe because you don't get fired. That's the old view. It's safe because if it's 10 years old, it's probably going to work.

True.

You know, it's like there's different levels of safe, I think. And there's privacy, there's security, there's enterprise-ification, there's vendor transition or acquisition or change, right?

Yeah. There's a lot of risk, right? So I do think, and I think in some ways it reminds me of like investment banker pitches, you know, where like everyone is number one at something.

Yeah.

And I've never done an IPO. Hopefully someday I will. But apparently when they come pitch you, they're like, hey, Jason, like we're, everyone's number one. And they're like, well, we're number one like Bay Area IPOs and SaaS. Yeah, this spring. And maybe that's like, you know, kind of BS, but I think in software can actually be real because you can be like, hey, I may not be number one, like I may not be DocuSign, but, you know, for SMBs in France in retail, I am number one.

Yeah.

You know, and then if that matches who you are as a customer, if you fit that slice, that segment of the market, then that's actually very valuable, right? And so—

Very valuable. It's very, very valuable, right?

And that I think is the biggest advantage of G2 just being, it's just a big database. Now we have all our data in Snowflake and we're actually also selling data solutions now. Like we have over 50 investors as customers, you know, a lot of leading VCs, private equity firms, even now McKinsey, Bain, BCG—

For growth stage, for the later stage folks looking for signals—

Even early. You know, and I think they all wish to remain confidential, but almost every top tier VC now has a data strategy.

Yeah.

You know, we're not the only data source, but I think they all say, hey, for private software companies to get product level data, we're probably the best. And obviously they match that up with like employee data from LinkedIn and Glassdoor data and all these other data sets. But it does allow them, and right now it's not so hot, but obviously 2 years ago, Every VC, they all had to become BDRs, right? They all had to do outreach because the hot deals wouldn't come to them. They had to go find them based on data.

So today, in some ways. But yeah, yeah. And is that— is that— that's interesting. Is that— I mean, you've been doing that for a long time. Is that— that's not a distraction to your core? I get why you have the data and why people will pay you $100,000 or $50,000 for it. I don't know what the price is, but I'm sure you can get $20,000 to $100,000. I'm putting in quotes relatively easily.

It is honestly, it's like $50,000 to $100,000.

Yeah.

Investor already. And yeah, you could say it's a distraction, but the beauty of it is really not, right? Because we have just put all our data in a Snowflake data lake. And especially the sophisticated investors, especially hedge fund types are like, hey, just give me APIs. And we are adding now a user interface, but we actually see it synergistic because we also sell it now as market intelligence to software vendors. And for example, you know, I was talking to our mutual friend Nick from GameSight.

Yeah.

And, you know, now they're owned by Vista Equity, but they're always looking for adjacencies, you know, they've gone in, they would be a good customer.

Yeah.

Also looking at like, hey, what's the data? What are the adjacent markets to customer success, product experience management? How are they trending? How are those categories trending? How are the vendors trending? You know, so it can also be very strategic, certainly for M&A, competitive strategy. And so, and honestly, for G2, it's also more strategic product to sell because, you know, our core solution is more demand gen driven. Which was 2 years ago amazing. Honestly, in the last year it's been challenging. You know, we've seen a lot of burn, right? Because marketers are all cutting back. Like one of our board members, Megan Eisenberg, whom you probably know, you know, long time CMO, she was actually VP of marketing at DocuSign way back in the day.

I remember. Yeah, we know her well.

TripActions, Lacework now. But anyway, she said she thinks her average peer is cutting back now, growth stage CMO, they're cutting back spend 50%. Yeah. So it's a tough environment if you're selling marketing solutions, which we do. And, you know, so our, our growth has slowed, but I think that's what I also like about Market Intelligence. It's more strategic buy, right? If it becomes part of your annual product strategy and, you know, your competitive strategy, all of a sudden it's also a stickier product. But a long way of saying we think that that data product, and by the way, that's also what we use to train Monty. You know, you need all this data in a data lake anyway. And Monty can even be used now by investors and consultants where you can just query the data.

That's powerful.

Investors actually love working that way. You know, they also don't wanna do reports and graphs. You know, they just wanna say like back in the day, like when Emergence was investing in you, they're like, hey, how's, you know, how does EchoSign compare to DocuSign or are they winning? Are they losing? Why, why do customers switch? Why don't they? And the beauty of a conversational AI interface, it can pull out all those answers in a conversation.

And do you need that just at a, I don't wanna talk about marketers before we run outta time, but do you need, just outta curiosity, do you need a second sales team to sell this data product to investment banks and others or can the the same folks sell it.

Yes.

Now you can't, it's a different language, you know, so that you're competing with Pitchbooks and CB Insights and you maybe you're additive in some ways, not a direct comp, but you need folks that know that, that, that language and that industry, right?

We have found we need a different sales team and honestly, even now selling market intelligence to software marketers.

Yeah.

We actually have, now we've taken an overlay person that used to sell data solutions because we also find like it's just a different sale. You know, because now like at Salesforce, you might know like John Tashik, you know, he's like the SVP of market intelligence and insights, but that's just very different than selling to a demand gen marketer.

Yeah, radically different, right? So you might almost need 3, 2, 2.5 sales teams in an overlay, right?

Which is, you know, maybe not as good, but frankly, it also strengthens our pitch. And part of my pitch, like an entrepreneur at Saastr would be like, hey, by the way, you know, our reviews don't just influence customers, which is obviously most important, but by the way, they also influence all these investors. And consultants. And I think what I've also heard anecdotally, which is kind of fun, you know, people always check out Glassdoor reviews now, I think, you know, before they join a company to see about the culture. But I think also most people looking at companies now, they're also like, oh, I also look at the G2 reviews, right? Because you want to know, are the customers happy? So, and that's kind of also our pitch. It's like, hey, it's an overall brand platform because ultimately the quality, the satisfaction of your products, that's going to be important to everyone, right? Customers, investors, partners, employees. So, you know, so it's all, which is kind of cool 10 years in. I think that that was kind of the vision, but it's starting to happen more and more where it's just influencing, you know, people in the software industry.

Yeah, I certainly personally use G2 a lot to get us, yeah, to get a sense of the quality of a vendor, right? As an employee might for a variety of reasons just to get it is like a Glassdoor, right? I already, we already know the top, the top names out there of the 100,000, but I just want to quickly know, especially in crowded categories, I'll invest my time for a myriad of reasons if it's a breakout in some way, right? I just want to know, is it breakout or is it one of these ones where people bang their heads on the table because they have no ability to compete in the market? And yeah, G2's powerful at that. But the market, the DemandGen thing, tell me what you're seeing. I think everyone's interested. I'm seeing a hint, a hint of a cautious recovery in marketing spend, a hint of it. I'm seeing a hint of fatigue of cuts for a year. A hint of, well, now we have no pipeline for Q1 of next year. We have a plan for next year, right? It's not what it was, but we've got to grow. So I am seeing lapping tough times leading to a hint of cautious recovery, but that's across maybe 200 sponsors and partners. What are you seeing across a much wider swath? Am I being delusional or too optimistic in this cautious recovery?

I'm probably also cautiously optimistic that, you know, we're at the bottom of the parabola.

Yes.

You know, and we're probably in our, you know, we're in the Salesforce fiscal year, so we're just starting our Q3. But I'm kind of hoping in terms of overall industry growth, sentiment, management spend, that Q2, Q3 is sort of the bottom, right? And then we'll start to come out of it. But, you know, and I think that's so far what our data is saying, you know, but, you know, but I think we need more time. And I think we also, none of us know how long the bottom of this parabola is going to be.

Yeah.

But it does feel like, yeah, the big cuts I think have been made. And now, like you said, people also at some point, and especially all the VC-backed companies, right? At some point, I also got this in my board meeting. They're like, hey, Godard, it's great. You're getting more efficient. But, you know, what about the 50% random growth? Like, okay. Yeah.

I mean, you gotta, you gotta, you gotta spend, you gotta spend it. You gotta deploy it as a marketer, right? Maybe less, but that's what I think I'm seeing. But oddly still tied to needing to show very short-term ROI, right? The way for us, for us, the most, the thing that's changed so much in the last 12 to 18 months, it's just interesting because I get to see a different slice of marketers than you do, right? Is I would say in 2021, you know what no one wanted from SaaStr was a lead scan. It's a scan, Goddard. We've been doing this for a long time. What I want is a qualified buyer. I want 10 qualified buyers, not 1,000 scans. And then something changed about 6 months ago is every CMO or marketer is being judged this quarter. So pipeline, like, pipe, hooray, pipeline. But what did you get this quarter? So it's very interesting to see scans as a proxy really become the most important I've seen in 10 years because you could show it. You can go back home and you can say the next day I got it, even if you and I know it's too, it's too, it's too high up on the pipeline, isn't it?

Yeah, no, I agree. I mean, there is that. And I think also our Sales cycles have lengthened, right? Conversion has lengthened. That's happened for most people. Now, the marketer is also under pressure. Hey, give me some stuff that's gonna convert now.

Now.

Yeah. And we're actually seeing it also at G2. I mean, one of the things we're changing, you know, we have a free profile. We're very committed to free because like I said, we never wanted to be like the traditional analysts where you have to pay us to be number one. You know, but we also like, we had, you know, maybe too many CTAs on our free profile and all of a sudden we're seeing, yeah, people value clicks, which might be our now is our analogy to scans.

Yep. Show it now, right?

Now we're like, hey, clicks are now part of our basic paid edition if you want custom CTAs. And, you know, we used to give some of those away for free, but we're seeing, oh, people really value that. And frankly, we were giving away free value they weren't even recognizing. So we, we do see that, you know, and, you know, but I think our pitch is also, hey, while you're getting that short term, right, obviously also build your long-term brand. You know, so we like to say we're giving people both, but I think you're right. There's a lot of short-term pressure. Like, I need ROI now.

Yeah.

Otherwise there is no long-term.

It's tough though, because you've got, as a marketer, you've got to deliver the goods for 2024 too. It's a harder job than ever, CMO, I say, right? I think it's a harder job than ever.

I'll have less, right? Less budget.

Yeah.

And give higher quality pipeline that converts now.

Okay, well, Goddard, this was great. I was gonna ask you what's the coolest thing on your roadmap, but I think it's Monty. I think Monty that is gonna come evolve further and further and a way to get the best out of 100,000 apps is probably the most exciting thing at G2 today and for the next 12 months. Do I have that right?

You do have it right. And Monty advice for buyers. The other thing I'll say, we're also building a Monty for sellers.

Hmm.

Theory being, can we, you know, if you have a listing on G2, can we convert it for you to a deal? By training Monty to also kind of answer all your sales FAQs. We're also experimenting with that. So I'm excited, you know, that would be, that would change the game. We're excited about, we're, and my co-founder Tim, he's now leading our labs team. My two co-founders are working on Monty because we're like, this is the most important thing, you know, both for the software buyer and then if we can software seller, right? But if we can automatically start having software transactions happen, that would be, you know, breakthrough.

Monty is your SDR, BDR, or Monty is your AE in that scenario?

Ideally both.

Yeah, I guess so.

Monty, and we're using it, we're trying it for our own G2 marketing solutions, but it's always amazing whenever you train an AI, you know, bot, it's amazing how quickly they learn. You know, of course, it's very easy now to get them to like 90%.

Yeah.

Getting them to 100% is a different thing, but it's, I think it's very promising.

Well, seriously, we should break, what I've learned on the e-commerce side of things, which B2C is Even B2B to C is usually ahead of B2B, right? Everything's automation, right? And the best platforms are automating 40% of consumer interactions, right? In e-commerce. And so maybe that can happen on B2B. Maybe 40% of sales do not require a broken process and the world's best AI can do it for you, right? They can negotiate the price, give you your answers, not lie to you. No churn and burn, no games, honest about the competition.

Zero cost of sale.

Yeah. And I'm excited. Okay. I'm excited about all the money. We're going to check in again about 6 months on money. Goddard, thank you for all the great time. This is super fun.

Thank you, Jason. Look forward to seeing you at SaaStr soon.

See you then.

Yeah. See you, Jason.