Join G2 Crowd CEO Godard Abel for a session on the secrets to the top-rated vendors on G2Crowd, AppExchange, and other platforms. He also discusses all the trials, errors and successes he had throughout all of his previous startups.
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FULL TRANSCRIPT BELOW
Godard Abel – CEO @ G2 Crowd
Great to be here with you. And I’ve been building SaaS Companies now for 20 years, so that’s a long time. And I also met my wife 20 years ago and what I’m looking forward to doing with you is sharing some of what we’ve learned about what to do and what not to do. And it says do’s and don’ts but for me it was more I first learned the don’ts and then I learned to do’s. And I was born in Germany 1971. My father was an entrepreneur, but he was building pump companies, very different businesses. But when I was nine years old he moved us to Pittsburgh and I had been living in the Pittsburgh of Germany. But I did become a Steelers fan and aspire to be an entrepreneur like my father. And my education, I went to MIT to study mechanical engineering, and I think I would have thought I was going to go into the pump business like my father.
But after a stint as a consultant I came out to Stanford back in the late ’90s in the dot-com era. This was in 1997, and I spent two years. I remember when I was in business school the internet was brand new and back then the hero was Jerry Yang. And I remember him coming to our classes talking about how he was building Yahoo. And at that same time I met two Stanford computer science students. And unfortunately it wasn’t Larry and Sergei who we’re starting Google at the same time, but it was two other students doing something much more mundane. They were building time and expense software. But they were doing it earlier than Java and trying to do it in a way where it gets deployed on the internet, which is something we would call SaaS today. But then after joining them, and we sold that startup to another startup NICU, I went home to Pittsburgh in 1999 which led to the inspiration for starting our first business. And my father was in pump business.
And I remember going to visit him back in Pittsburgh and talking about the internet and how it’s going to affect his business. And back then it was interesting to me, “I said dad how’s the internet going to change your life?” And he said, “It’s not.” Which coming out of the valley. And even back then everyone was worried about getting Amazon which we still are 20 years later and many of us are still getting Amazon, but he said, “My pump business is not going to get Amazon. I sell highly engineered complex pumps and I can’t sell them like a book online.” But being out here in California at the time I saw what Cisco was doing, what Dell was doing. Dell was selling configural PCs online. And that really gave us the inspiration. I wanted to help my father sell his pumps like you could sell Dell PCs on the internet. And so we started building a cloud solution, but it was a long arduous journey. I thought we’re going to be successful in one year, go public, be like Jerry Yang.
But I think a year into it we hadn’t made much progress. Three years into it we were almost bankrupt, and it actually wound up taking 13 years until we got to a great exit. Our next company SteelBrick was inspired by the first and SteelBrick was really a next generation CPQ and one of our audience members Lars Nielsen is right here. He’s actually part of the reason I decided to partner with the founder of SteelBrick Max Redmond and Max had built a great CPQ app, but not a lot of the world had heard of it except for Lars. Lars was one of his early customers at Cloudera and I met him at Dreamforce in 2013 and unbeknownst to me and my business partner Matt Gourniak, he came up to us. He was a big machine’s customer, and he was actually heckling us. Lars said, “Hey I found a much better CPQ.”
And we’re like, “Lars it’s okay. Oracle just bought the company, but what is it?” And he said, “It’s called Quickly.” And we still didn’t know what it was. And then he said, “SteelBrick.” And we were like, “Oh, funny we were talking to Max.” And that gave us the courage to partner with Max. And then in less than two years we took that business from Max plus a couple of guys to really a global leader that was acquired by Salesforce. So the second time we knew what not to do and what to do. And that’s what I’m going to share today is how you can in seven quarters go from 3 million to $400 million evaluation guaranteed. You have to have Lars as your customer. And in between BigMachines and SteelBrick we actually started another company called G2 and G2 was inspired by my experiences as a SaaS entrepreneur.
And frankly part of it was I remember it took us nine years to get in a Gartner report, nine years. That seemed a little bit too slow to me. And I didn’t love talking to analysts. I love talking to customers. And so our goal with G2 was let’s give people like Lars, let’s let our customers vouch for us and let’s let the customer have all the power. And that’s what we’re building with G2 now. And it took us many years. And in parallel we went off and build SteelBrick. I came back to G2 as a CEO about three quarters ago after a little bit time at SteelBrick. But my co-founders has done an amazing job, creating a scale platform that now has 600,000 reviews and 3 million SaaS software buyers coming every month looking for products like yours. And as a hobby we have just launched another SaaS company called ThreeKit. We met another entrepreneur Ben Houston, amazing entrepreneur. He reminded us of Max Redmond and he’s building an amazing 3D AR technology.
He used to make movies, doing computer special effects, computer graphics. He actually saved Harry Potter’s life, but his technology is so shiny and beautiful that we decided we had to partner with him. And now I’m the executive chairman of this company but 20 of our former SteelBrick team members have joined Ben and they’re going to be bringing this product to the market. And the amazing thing is we took that from a hundred thousand 2 million ARR in just one quarter. And so the goal is every company we get a little bit better. And what have we learned? There’s really four keys we see to building great SaaS businesses. Number one, commit to the summit. Figure out what are you really passionate about, what summit are you trying to climb. Number two, so I learned the hard way. I was more of an engineer, MBA. I didn’t know how to sell anything, which led me to near bankruptcy, but ultimately really learned how to sell with passion.
Once you’re selling and starting to scale and now you need a team. And so I think we’ve really learned how to build a winning team. And as you’ll see a lot of our team now goes with us from company to company, but we keep growing it. And finally take care of yourself. And I think what’s very hard as a founder it’s a very emotional journey. And I do remember especially my first company had a lot of depression and a lot of anxiety. And so now I’ve learned how to take care of myself, so that I can have fun while we’re winning. Well the first lesson learned, commit to the summit. And I do think building a company is an arduous journey. You will go through highs, but you also have many lows. So I think it’s really important to be climbing a mountain. You really want to get to the top of.
And for me as I mentioned BigMachines is a very personal problem. As it turned out my father he was my first customer, my first investor. And so although it took 13 years, many struggles near bankruptcy, we really wanted to solve this problem. And ultimately we did. And G2 Crowd as I mentioned we want to eliminate the magic. What is the magic in the magic quadrant. I don’t know. But with G2 you do know it’s very transparent. It’s your customers voice. You can see who they are. They’re real people on LinkedIn. And so we think we have a much better way to validate your products and rate your products. And the big thing building any business you need a partner. It’s a long journey. And I remember with BigMachines my first partner was Chris Shuts. He and I went to MIT together. He was a much better engineer than I ever was. And so once I had the idea I convinced my father to invest and become a customer. I called Chris and said, “Hey how do we build this product?”
And actually Chris today 17 years later he’s actually still running that business at Oracle, but a lot of our other families so he joined us at the BigMachines in 2000 to run our European business. He’s still with us today, now running ThreeKit. Tim Handorf you can see there, joined me at BigMachines in 2000. He was the CEO of G2 while I was building SteelBrick and now he’s our president. But the amazing thing a lot of us now been together almost 20 years building companies and having this kind of a tight knit team I think is what you really need to succeed. And perseverance and I mentioned this, my first lesson was what you don’t do but what I did do at BigMachines at the very beginning, which was quite exciting, it was a dot-com era. I created a PowerPoint business plan, and I went to see a man named John Scully who you have to be older to remember, but if you watched the movie about Apple, he’s the guy that fires Steve Jobs, so which was maybe a bad move.
But John Scully was actually quite a famous businessman, and he became my first investor in BigMachines. He was investing in internet companies. So I was able to very quickly raise almost $20 millions, scale the business, but frankly we didn’t have a product yet. We didn’t have customers. And so by the end of that first year I started to realize, “Oh, wow we’re starting to have problems. We’re starting to having lay people off.” We had to do that three times. And by 2003 we were almost out of business. We burned through $23 million in venture capital and only had 1 million in revenue to show for it. And so we faced a very hard decision. My co-founder Chris and I do, we just give back the last million to our investors and chalk it up to lesson learned, get another job or do we continue? And I think we did decide to persevere, and it was because we really believed in the plan, and some of our … We had very few early customers.
We didn’t know how to sell our product. I think in 2002 we only signed up two customers and this was after the dot-com bubble burst, 9/11 happened. We were going to a manufacturer saying, “Hey we’re going to sell you pumps on the internet.” And they all said to us, “Well the internet is a fad. You’re dot com. You’re going out of business. Go away.” So it was a very hard time for us. And also my personal life, my wife and we, well luckily I found out we were pregnant but we were having twins. And I remember they were born in 2004 our business was kind of at the bottom but they were also wound up being born nine weeks premature. And I remember one of the hardest days of my life would had felt like I was going to the hospital, actually our biggest customer for BigMachines that just … We thought we were going to get an order.
We’d gone to visit the president in Delavan Wisconsin. We didn’t show up for the meeting. And so I just remember feeling, “Oh, wow my business is going under, my boys are in the NICU, in the hospital and my life can’t get any worse.” But remarkably from there my life only got better. Luckily my boys today they are 14 years old, amazing boys, doing really well and the business turned the corner. And I thank a lot of that to actually Met Gourniak, who I hired at that time. He was at GE, in a program … He’d before build another start up, they sold to Oracle and figure he was getting bored at GE, but he decided to join me. Why? I don’t know. And then together we really learned how to sell the product and ultimately had a great company. And the other thing I learned at that time was we really needed to ride a bigger wave.
And really in hindsight BigMachines we were too early. But the other thing that made it successful, in 2004 I went to one of the first Dreamforce’s met Marc Benioff. And said to Marc, “Hey we love your Salesforce app. It’s in the cloud. We built a CPQ in the cloud, can we partner?” And it took a couple of years to really get going. But ultimately that’s what made BigMachines a success. We became the number one partner for Salesforce in the cloud. And as they grew, we grew. And so I think and really we’re all riding a much bigger wave of SaaS. And I was talking to Jason Lumpkin on way in and I remember he started Saster. The first event was four years ago. This is the fifth Saster. And I remember thinking back then, “Well, everyone already knows about SaaS.” It’s kind of baked, right? It’s not really going to get any bigger. And frankly I was really wrong four years ago. It’s still getting much bigger and now I believe it’s going to get much bigger over the next 10 years.
So we are riding this much bigger wave. But I think within your own category find something that’s really going to grow inevitably with you or without you and riding that bigger wave is really what can make your startup successful. And the wave we’re riding at G2, the wave we’re all riding here at Saster is this fourth industrial revolution which really means everything in business is being automated and companies rather than hiring people they are now automating everything. There’s companies, there’s people who are talking about robotic process automation, companies like UiPath automation anywhere with software. We’re automating every single business process with SaaS. All of your applications, you’re automating more and more processes and more and more industries and making it easier and easier for companies to scale and get more efficient.
But I think this is still just the beginning and I think almost everyone believes this now. More and more business processes are going to be automated. They’re going to be automated by software by robots. And it’s also scary. Businesses are still afraid of getting Amazon. John Chambers from Cisco said that everyone is going to try to transform digitally but 40% of companies will fail and they’ll even go out of business. And so there’s a massive opportunity but also a massive threat for every business out there. And really that’s our goal with G2, is to be that platform where businesses can go and find the right technology, find the best SaaS app, the ones that you’re making to make them succeed rather than fail in this industrial revolution. And the other thing I learned at BigMachines is don’t set your vision too broad too early. And what we did way back in 2000 we said not only are we going to build those cloud app but we’re going to build a marketplace, we’re going to sell all pumps, all machinery.
And that was my first business plan right there. It was my father’s golf course in Pittsburgh but it was a back of a napkin business plan. And I think we said, “Yeah, we’re going to take the whole machinery industry online.” And I don’t know two years. And from there we had to narrow the vision, narrow the team and so I kind of learned the hard way, “Hey focus on one problem.” That’s why SteelBrick was very different. Max was much smarter than I was. He picked one problem. He said, “I’m just going to do CPQ on Salesforce for software companies like Cloudera.” And that was a great initial market. And from that focus we were able to broaden very quickly, very successfully. And the other big thing I learned especially at Salesforce and watching Marc Benioff over the years is you really have to create a winning story because most software is kind of boring, business software. It’s not super sexy. And I think one amazing thing Marc Benioff did, Salesforce automation is not exciting but he created a bigger story. And this is a great book from Marc’s book, Beyond The Cloud.
Great quote, where he said no matter where we’re selling no matter which customer we’re selling to, we never sold the features of CRM. And frankly Salesforce probably never had the best features but he created this amazing story about the company, the one one one model, the customer success. And he’s made it really exciting. And you go to Dreamforce even now, 200,000 people come to San Francisco excited about Salesforce about CRM. And really being able to tell that bigger story, is how you can differentiate yourself. And selling with passion. And I started as an engineer and as an MBA and frankly in business school back then they didn’t even have a class on sales. I think professors thought it was a dirty word. They taught us strategy finance and they taught us how to raise money but they did not teach us how to sell. And so the first three years of my business, I didn’t really know how to sell then. And frankly we almost went bankrupt.
And it wasn’t until we got to that point where we had no more money. And then really Matt and I together we learned, “Hey, let’s just go one deal at a time. Let’s figure out what the customer wants. Let’s articulate a compelling story and vision and let’s sell them that deal and then let’s deliver.” And it’s obvious in a way, but for me also as a founder entrepreneur I realized everything I do today is sales. I sell to my customers, my employees, my investors. And so I think that’s the most important scale. No matter what business do you want to build. And what we’ve been teaching our team is how do they all sell with that same passion? How do they make the story personal to them? Because I think if you can whatever business you’re building if it’s personal to you, you can explain to your customer why it matters to you, how it can help them, you can win.
And no boring demos. And one thing we also do at our sales kickoffs oftentimes we ask vendors to come in and pitch, just to get salespeople to see how boring most demos are. And I think the key to a good demo it’s actually the story you tell around it. And I do remember with SteelBrick I had the chance to go visit Marc Benioff at his house. And I had a huge pitch prepared. I don’t know like 15 slides on why we were the best CPQ partner for Salesforce, but I only got two slides into it and then Marc looked at me, and he’s like, “Hey can you show me the demo?” Like right now. I’m like, “I have 10 more great slides to show you.” He’s like, “No I just want to see the demo.” And then I showed him. Actually I just did a demo of, “Hey marc this is you Buying Time expense software using SteelBrick, using CPQ, using billing. And took them quote to cash on Salesforce. but it was all about Marc Buying Time Expense software for his company.
I think it was a good story but I do remember then after demoing to him for 21 minutes, he turned to John and he said, “I think we should buy the company.” And which was a big surprise. We were very happy to be as great partner. But I do think analysis is something we try to teach all our salespeople. You’ve got to make it personal. You got to tell a story. You got to make it relevant. And I think in any SaaS business this is something you have to get really good at. And selling as a team. And I think most of your teams, you need sales engineers, you need founders. But especially if you’re trying to sell bigger deals don’t go in alone. Build many relationships on many levels. And I think this is something certainly Matt and I … And other thing is that once you’ve been selling together 15 years you really don’t have to prepare. Everyone knows what they’re going to do. Everyone knows they’re part of the team and you can really win.
And what we’re doing now with G2 to make it easier to amplify customer voice. And I remember we first learned this at BigMachines, where the best way to sell was to have our customers speak to our prospects. But back then the only way we could do it is we’d have our user conference, we have events, but that could only happen once a year. But we always found that once our prospects heard from our customers … and first we were scared. CPQ projects are hard, some of our customers weren’t happy. But our prospects love the fact even when there were challenges, when they had problems they heard that we would take care of them. And our whole goal with G2 is to make that much easier because you will also tend to tax your references. And I mentioned Lars earlier, but I think after a while for SteelBrick he was doing like 10 reference calls a month and he’d say, “Look I have a job to build. We’re taking our company public.” So we said, “Oh, great Lars, just write a review on G2.”
And so rather than having to set up reference calls we started sending our SteelBrick prospects and now it’s Salesforce CPQ. You can see there, there’s hundreds of reviews. And we found that’s what really gave prospects of confidence to buy without having to do reference calls. And the other thing we do is we show them their LinkedIn connections, so you can find somebody you already know. And so we find this is now a great way. Once you have a great SaaS app you delight your customers. It’s one of the best ways to accelerate that. Another great company Qualtrics and you might’ve heard from Ryan, he just sold his company to SAP for $8 billion. But Qualtrics also went all in on G2, you can see they’ve over 1000 customer reviews and they’re really using that to validate their customer success and let other people discover the product. And so it is a great way and we designed it for entrepreneurs like yourself. It’s free you don’t have to talk to us, you don’t have to pitch us. Just have your customers speak for you and this will really accelerate your growth.
And finally once you do all that hard work to get a deal, I think we also learned is don’t give it away. And I think the keys in a SaaS business, I mean we’ve got really good at and now it’s going to be a three year deal, it’s going to be annual upfront payments. And then I think when we also did SteelBrick, we said, “Hey, we’re not …” We had a competitor that we didn’t think it was very trustworthy and we just said, “Our first deals were all at list price.” And because we really believe in the value, we believe we had a better application. And I think we also learned that, that’s really critical to building your business. And building a winning team. This is really what makes us successful today and allows us to build more and more companies. And one great example of this, one of the stories I did hear from John Sculley was about Steve Jobs and why he was such an amazing recruiter. And you might’ve heard he actually recruited John Sculley with one of the most famous recruiting lines ever. He said, “Hey do you …”
He was actually the CEO of Pepsi and one of the most successful young executives to America, but he wanted him to come help him run Apple. And he said, “Hey, do you want to sell the colored sugar water the rest of your life? or do you want to change the world? Dent the universe?” And I think he said Steve was such a good recruiter because he just believed so much in what Apple was doing that he just couldn’t understand why anyone wouldn’t want to be a part of his mission. And I think really bringing that belief in your business is the key to bringing in great people to your team. And don’t use recruiters. What’s much better is bringing the best people with you. And even if you haven’t started a company, I remember my CTO for my first company BigMachines was Vic Austin. He’d work with me at our prior startup NICU. And I just told him, “Hey I’m starting a company.” And he was like, “Hey I want to come with you.” He didn’t know what we’re building.
And I think now we’ve done this across four companies, but by building a really unique culture where people can see, hey people succeed, they grow with you, then they’ll stay with you. And this really becomes by far your biggest asset. And building your playbooks. And this is something now across companies. So once Matt and I learned how to sell, we started writing it down and we now have about a hundred page sales playbook, we take to every company and we keep tuning it. But to teach new salespeople how to do those great demos, how to sell with passion, how to sell as a team. And there’s also a great playbook out there from Salesforce. If you just google, I believe Salesforce sales playbook, but he has kind of the 11 laws of how Salesforce became so successful. But really you have to write your own playbook and to be able to scale. But once you have your playbook, I think the beauty of it just like my meeting with Marc Benioff, you have to audible.
And you might have the perfect pitch prepared but the customer wants to hear something else, wants to see the demo now, be ready to do that. And I think also why Peyton Manning was such a great football player, Tony Dungy his first coach with the Colts, he could audible so well because he was so well prepared. He knew the playback so well. He practiced every route 200 times. So when the game changed he could change on the fly. And this is what we also try to drill into our teams is, “Hey you have to know the standard plays, so you can audible.” And building great partnerships. I think not only big partners like Salesforce but with some of our best partners, we’re smaller. Ryan Westwood it’s simplest. I remember meeting him he only had 10 employees in 2014, we were just starting SteelBrick and I just visited him last week at Silicon Slopes in Utah. But now all of a sudden he has 400 global employees, all built implementing SteelBrick, now Salesforce CPQ.
So I think also betting on small partners that will bet their career, their company on you is a great way to have amazing partners. And we’ve been starting to also acquire other entrepreneurs to accelerate our business. We just acquired a company called Siftery, amazing entrepreneurs. But I think the key to making that successful is now they believe G2 is their company. They’re bringing their entrepreneurial spirit, their energy, their product, their talents to us. And we found this a great way to grow faster. But while you’re doing all of that and now G2 we’re getting up to almost 300 employees. One of the things that amazes me at Salesforce, Marc Benioff being able to align 40,000 people and Elon Musk talks about this. That’s his whole purpose in life, because any company is a group of people. But if they’re not all running in the same direction, you don’t get the energy, you don’t get the talents.
And so once you have that team, once you start doing acquisitions, you really have to keep everyone aligned. And a great method we do use is the V2MOM to make sure that the whole company, the whole team is running in the same direction. And this culture that we’ve built is really why people want to keep working together. But it does all start … I only learned this when I was leaving my first company BigMachines. We’d sold 51% to an investor. And so I left a little bit before we sold the company to Oracle, but we had a nice goodbye party in Chicago. I remember we were on a rooftop in the summer and that was a great party. We were drinking a lot of beer and people coming up to me saying, “Thank you. It’s so great to work with you.” And I was just asking everyone, “Why did you like working with me?” And what shocked me.
It wasn’t a lot of things. There’s this one thing they’re like you really care. You really care about the customers, the company, you really care about me. But what shocked me that was it. It wasn’t any magical formula. And so I think having people really feel it, your customers, your employees, your partners, your investors that heart is what can really help you build such strong cultures. And taking care of yourself. And as I mentioned BigMachines was a big struggle. Took many years. And for many years I had this cloud of anxiety in my forehead, which was my company. I forget, I couldn’t stop thinking about it even when I was with my kids and in fact it didn’t feel great. But then I met this conscious leadership guru Jim Detmar through some YPO friends, and he started just having me work on my own awareness. And what I really learned was I really have to take care of myself first and in fact, when I was building BigMachines I was about 30 pounds heavier.
I wasn’t great at taking care of myself. I was drinking too much, eating too much, to stop my anxiety, but ultimately I’ve just learned. And luckily now I’m 47, but I think I’m in better shape than when I was 37. And I do start every day. I run every day. That’s how I start my day. I work out. I spend an hour at the beginning of the day running, stretching, breathing. And I do it every day, even if I have to sleep one hour less. It’s my number one priority. And it’s also great when you travel. So this is me in Boulder, on top of Mt. Sanitas, but running can also take you to beautiful places. And being authentic. And this is my daughter Maddie. She’s just amazingly authentic and amazing. I love, I’m happy every time I see her. She’s now 11 years old, but she’s just so amazingly authentic. And I think this is something I bring to my work every day. And it just makes my life much more enjoyable but also it allows my team to trust me that much more.
And the simplest thing I’ve learned is just to breathe, enjoy the silence in the universe, so you can ultimately find your divine path. And that’s what I now try to do every day. Every meeting is find the easier, the more natural path and trust your intuition and see where it takes you. So thank you.