Godard Abel: CPQ, as you said, is configure price quote. And it does go back to my father’s pumps. And I remember going home to visit my father in Thanksgiving 1999. And that’s when we’re talking about the internet and pumps. And my father was very skeptical his pumps could ever be sold online because they are very configured, and based on chemistry. So, based on PH and with the fluid you were handling, the pressure, the flow rate … you have the configure rate for the pump with different linings, housings, materials, motors. And he kind of explained to me “Look, you need a really good (he thought) German sales engineer to put together the right pump for the customers application.”
And then I really had the idea … you know, I was in Silicon Valley … and Cisco was selling complex routers, networking gear already in 1999 online with configurators. And the way configurators work, they kinda ask you, “Hey, what do you need?” Right? Or in the case of a PC, like Dell, how much memory do you want? How much hard drive, what operating system you want? And then the configurator has rules that based on your customer requirements, it puts together the right components and, you know, configures exactly the device you want.
And in real time it’s showing you pricing, lead time. And so, it makes it possible to order very complex products online. And then that was really the idea I then had. I’m like, “Well, Dad, why don’t we build an online (today you’d called cloud or SaaS configurator for pumps) and then you can sell your pumps online.” And so we started building that in 2000 and he became my first customer. And that was my long journey down the CPQ path or it started then anyway.
Stephen Cummins: Welcome to 14 minutes of SaaS! The show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS scale-ups!
Episode 98 is with Godard Abel, CEO and cofounder of G2. It’s part one of three episodes. I’ve met Godard in person several times and had many conference calls with him, too. At this stage, I feel I can call him a friend. His story is a wonderful one, not just because he helped found four major startups and has been CEO of three of them, Big Machines, SteelBrick, G2 Crowd, the other one being ThreeKit … but because he set out to solve a problem for his Dad’s pump business. He succeeded but he really had to struggle through many years – a couple of them dark, most of them tough, with that first business. And he’s just taken the learnings and the productive friendships with his co-founders and they’ve literally taken flight with the next three businesses.
This is 14 minutes of SaaS, coming to you from SaaStock Dublin in front of a very welcome live audience. And we’ve got Godard Abel, cofounder and CEO of G2, executive chairman of ThreeKit and he’s also help build a couple of other famous companies which we will get into in this talk.
Great to see you again, Godard.
Godard Abel: Great to see you, Stephen. Great to be in your home town of Dublin. Actually my first time and I have been blown away. Dublin’s a beautiful city, and the amount of SaaS here. Incredible!
Stephen Cummins: Unbelievable. Are they looking after you?
Godard Abel: Very much. They’re very friendly because I came last week … I was in London and the one thing we know is that taxi drivers don’t talk to you. Everyone in Dublin, Ireland is very friendly.
Stephen Cummins: Yeah. I lived in London for 4 years – it’s very different vibe all together.
Godard Abel: Yeah, the people are very friendly, very welcoming. And I’m just amazed by the amount of tech because now you go through the city of Dublin, it’s like more concentrated than the valley. It’s like Google, LinkedIn, Facebook, Salesforce is building a new tower. Everybody’s in town. It’s quite amazing.
Stephen Cummins: They are. Where I live, there’s about 8,000 googlers about a 300 meter walk away and about 150 meters away, there’s about a 1,000 or 1,500 Facebookers, and Salesforce is building on the other side of the water. It’s nuts.
Godard Abel: It’s like living in Palo Alto. It’s funny because I’m surrounded my neighbours all work for Google and Facebook too. Yeah. Funny. Same in Dublin as Palo Alto. Yeah.
Stephen Cummins: Do you miss Chicago? Living out there in Palo Alto.
Godard Abel: I’m still in Chicago a lot for business. I do have a corporate apartment there. So I spend probably as much work time in Chicago as San Francisco. So I still get to be there quite a bit. But obviously, I also get to be in California in the Winter, which is nice. But I obviously … I love the people in Chicago and they’re much like the people of Dublin I find, you know, very friendly, very warm and in the Saint Patrick’s Day, they dye the river green in Chicago, I don’t know if you knew that.
Stephen Cummins: I knew it. And also it’s to me the friendliest city in the United States. I felt that instantly in Chicago, when I was there. And I’m not just saying it because you’re saying Dublin, I think I’ve told you before. I do like it a lot.
Godard Abel: Yeah, because probably New York, more like London, right? A bit. Or even Bay Area … people are a little bit more stand-offish you know. But in Chicago just like in Dublin … yeah, very warm, welcoming people … yeah, a little more relaxed.
Stephen Cummins: Absolutely. I think they like their own city.
Godard Abel: Indeed. They love it. And they’re very proud of it.
Stephen Cummins: Which is a fantastic thing. Now, I would love you to talk a little bit about something I don’t think you often talk about … your early years, because you were born in Europe. Take us through your first, I don’t know, 20 years, 22 years in two or three minutes.
Godard Abel: Yeah. I will do that. Now, I was born in {place}, which you might know if you’re a European football fan.
Stephen Cummins: I do. {Speaking German to each other}
Godard Abel: The year I was born in Mönchengladbach [Germany] in 1970 … interesting fact, because they won the Bundesliga that year. And in the 1970s, they were actually one of the most successful teams in European Football.
Stephen Cummins: I remember them well.
Godard Abel: And actually, I think last week they are actually leading the Bundesliga again. Kind of a surprise because obviously they’re a small market team. But after I only spent a year in Mönchengladbach … but as you can tell, I’m still a fan of the soccer team.
Stephen Cummins: Good.
Godard Abel: But then I moved to Essen, which is I would say the Pittsburgh of Germany … but right next to Dusseldorf .., old coal and steel town. And I moved there with my father who took over a pump manufacturing business from my grandfather. And so I kinda grew up in a very kinda industrial [area], but also growing up around a father building a business. It was a small business. And obviously a lot of struggles, challenges. I grew up around talking business with my father. And probably that’s ultimately what I remember inspiring me to become an entrepreneur.
Stephen Cummins: And is your Dad, would you say, the biggest influence in your life?
Godard Abel: I would say also I just my Mom, you know, so I’d say equal, but different. My mom was actually also in the family business. She was my father’s CFO for many years. And so I definitely grew up around business, entrepreneurship, and … but then when I was nine, also because of businesses, we moved to Pittsburgh, Pennsylvania. And I made the joke yesterday, it’s the Essen of the US … also an old coal and steel town. And that’s where my father decided to open the US subsidiary for his pump business. And so we moved the whole family there. And then I was there all the way through high school and, you know, Pittsburgh also like Essen, is kind of a humble, more working town. But I enjoyed growing up there – a lot of good friends. And I went off to college at MIT.
Stephen Cummins: Fan of the Steelers?
Godard Abel: Fan of the Steelers? Very much!
Stephen Cummins: Yeah you know, you’re the second guy from Pittsburgh in a row, I’ve interviewed. Eric Boduch as well just there before you, yeah.
Godard Abel: Nice. Awesome! And Pittsburgh also has a lot of civic pride because it’s a smaller town and the Steelers are sort of the unifying factor. We all love the Steelers in Pittsburgh.
Stephen Cummins: Fantastic. MIT … that’s impressive! So tell us about your experience there.
Godard Abel: Yeah. At MIT … and I really went there because I think I thought at that time … I think my father was hoping I would go into the pump business. It was a great opportunity. But then … so I went to study mechanical engineering because I remember one thing I was thinking at the time … I’m like “If I ever go into the pump business, I don’t want it to be nepotism, I want to be super well prepared.” And so I studied mechanical engineering there .. and spent you know, five years in Boston and really enjoyed it.
Stephen Cummins: Did, you know, I worked for Chesterton Industries?
Godard Abel: I did not.
Stephen Cummins: Do you know who they are?
Godard Abel: I’ve heard of them. Yes, they also have a pump business, right?
Stephen Cummins: They’re the oldest pump business in the world and they’re from Boston. Small world. I was an industrial chemist a long time ago. I’m pretty old, Godard.
Godard Abel: Nice. So, you know, all about fluid mechanics and pumps?
Stephen Cummins: I wouldn’t say I know all about it because I was working with, well, I was working with the… liquid… the liquids parts of the business. Not so much the pumps. Coatings and the coatings for the insides of the pumps and stuff like that. I was working with the chemical side.
Godard Abel: Wow. Yeah. So we both started in the pump world and now we’re in SaaS.
Stephen Cummins: You went on to … I suppose almost create or evolve the market for CPQ configure price quote. So for the listeners, could you explain what CPQ is? And tell us a little bit about your experience with Big Machines?
Godard Abel: Sure. CPQ, as you said, is configure price quote. And it does go back to my father’s pumps. And I remember going home to visit my father Thanksgiving 1999. And that’s when we’re talking about the internet and pumps. And my father was very skeptical his pumps could ever be sold online because they are very configured based on chemistry. So, based on PH and with the fluid you were handling, the pressure, the flow rate, you have to configure the pump with different linings, housings, materials, motors. And he kind of explained to me “Look, you need a really good (he thought) German sales engineer to put together the right pump for the customers application.”
And then I really had the idea … you know, I was in Silicon Valley … and Cisco was selling complex routers, networking gear already in 1999 online with configurators. And the way configurators work, they kinda ask you, “Hey, what do you need?” Right? Or in the case of a PC, like Dell, how much memory do you want? How much hard drive, what operating system you want? And then the configurator has rules that based on your customer requirements, it puts together the right components and, you know, configures exactly the device you want.
And in real time it’s showing you pricing, lead time. And so, it makes it possible to order very complex products online. And then that was really the idea I then had. I’m like, “Well, Dad, why don’t we build an online (today you’d called cloud or SaaS configurator for pumps) and then you can sell your pumps online.” And so we started building that in 2000 and he became my first customer. And that was my long journey down the CPQ path or it started then anyway.
Stephen Cummins: Fantastic. And you know, when do you think Big Machines reached this peak? Because I would have been involved in a few joined projects with the early days of Salesforce with Big Machines. Tell us maybe a little bit about its journey to its peak – and maybe tell us a little bit about maybe a learning experience or any dark experience you may have had after that, because we’ve talked about this before.
Godard Abel: Yeah. We first went through a tough period, you know, kind of we had to go through a deep valley to get to the peak. And because, you know, in hindsight and I think maybe I was right about the internet and pumps. But frankly, I was probably several years early. Yeah. And, you know, in the beginning, there was this great dotcom boom. You probably remember it, right? There was all this hype as they would raise money the first year. Raised 3 million dollars from investors, raised money for my father, just based on vision. And everyone at that time was betting on the internet until they weren’t – because then the dotcom bubble blew up. 911 happened. And then 2002, you might remember, there was a very deep tech recession. And frankly we’re calling as manufacturers … and we’re like ‘Hey, don’t you want to sell your pumps online?’ They’re like, well, ‘No!” They actually take the meeting. They’re polite nice people in a meeting. They’re like, well, “You’re dotcom. So when are you going bankrupt? And by the way, I think the internet was a fad. So good luck.”
So we were closing very few deals. So as a result, we were almost bankrupt in 2003 which, you know … we burnt through, I think 19 of our 20 million. And as entrepreneurs, it’s very anxiety inducing, especially as I was about to lose my father’s money, and all my other investors. I had hired a lot of friends into the company and frankly then wound up having to lay most of them off. Yeah. Because based on our initial capital, the hype, I hired 70 people. And then the bottom came in 2003. I’d scale it all the way down to 20. And I had to let go of a lot of people into a tough job market. And nothing ever felt worse to me as an entrepreneur than having to do that.
It wasn’t their fault. It was really my fault. I’d hired them too soon. The market wasn’t there. And obviously, I didn’t… I didn’t know either … but still it felt … it really hurt. It really sucked.
Stephen Cummins: How did you, how did you pull yourself out of that? How did the company turn the corner?
Godard Abel: I think really in 2003, (with) my co-founder, Chris and I … and that’s what took me to Chicago. I started a company in Silicon Valley, but we decided to move to Chicago partly because we had to go the organic road. We had to save money. And as my co-founder wanted to buy a house. He couldn’t do that in California, but he could in Chicago … and we were able to get, you know, I think stickier employees – also at a lower cost. And then we went in the organic growth mode. And the way we saved the company was one deal at a time. So I kind of realised I more, back then, strategy. I had been a consultant MBA, but I was too theoretical about business and I realized, ‘Wow, the only way we’re going to grow organically … we have to close the next deal on the table.’ And then I just shifted my priority to like, ‘Hey, what’s the next steps to close the next deal?’ And I’m just gonna focus on that kind of like tunnel vision and kept doing that … and then started closing more deals.
I remember like I think 2004, we then did 10 deals which was a lot.
Stephen Cummins: Because they were big deals.
Godard Abel: Yes. And then we also started partnering with Salesforce around the same time. And that was really the other thing that really helped us. I know you worked at Salesforce ….
Stephen Cummins: Yes.
Godard Abel: … and Mark Benioff, an entrepreneur I still very much admire to this day … probably have learned more from him vicariously then maybe another entrepreneur, but he created the whole SaaS and cloud thing. He popularised it because he got businesses to start seeing the power of it, to start buying it and (see) that online cloud software is actually better for the customer. And so then we became a leading partner for CPQ for Salesforce. And then 2007 is when we really started to turn a corner. I remember I was doing a deal with Eric Eyken-Sluyters from Salesforce, still one of their best sales leaders, but it was Ricoh, a big copier company … And that deal, Salesforce really needed us because they’re competing with Siebel. And Siebel had its own CPQ app and, you know, Ricoh said to Salesforce. “Hey, we’re only buying it if there’s CPQ!” Because they sell very complex, multi-function printers. And they’re like “Without a CPQ, Salesforce doesn’t have much value to me.” But with it [it works] … and then we became the partner, and together we won to deal. And then we started winning lots of deals with Salesforce. And so then the company really entered a rapid growth phase. And, you know, then by 2013, Oracle, we also partnered with Oracle. But with our CPQ CRM on demand product. And then, you know, they decided to acquire the company. And so then it kinda led to a happy ending. But it was after getting through many years of struggle.
Stephen Cummins: A 400 million dollar ending.
In the next and second episode of three episodes with Godard Abel, we talk in depth about the four businesses he built, but especially SteelBrick, now Salesforce CPQ, which he scaled in less than two years to the same size as Big Machines after 13 years. This is the power of SaaS and the power of building on a scalable platform within a massive ecosystem. In this case, Salesforce’s ecosystem. And his biggest company so far G2, formerly G2 Crowd. Gartner produces marketing quadrants backed by a liberal sprinkling of magic to help companies choose what software they should buy. G2 Quadrants are not 100 percent perfect. No model is. But they are seriously valuable, because they’re backed by data.
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Thank you for the artwork to Michael Quill, AppSelekt CTO & CoFounder.
Thank you to Anders Getz, AppSelekt Marketing Specialist, for the transcript.
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