Founded in 2012 by two brothers who wanted to create an innovative way to help small businesses grow, G2 Crowd was created as a place where real people could share their experience with different SaaS (or cloud computing) solutions.
You’ve come to the right place if you’re wondering how G2 generates income. We’ll analyze G2’s business strategy in depth here and list all of its income sources.
G2 operates on an ad-supported free service. Its revenue comes from paid subscription fees, which allows them to offer premium features for its paying members.
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About G2
G2 is a P2P (peer-to-peer) software reviews site for the B2B software industry. It was founded by CEO and Cofounder Godard Able who describes G2 as “the Yelp of B2B.” Obviously, G2 makes most of its money from some other sources besides its viewers and reviewers.
G2 was founded in 2012, but its vision remains grounded in the belief that product reviews should reflect actual experience rather than marketing hype.
Business Model of G2
G2 is a freemium company, which means it offers its services for free. However, if you want to increase your profile, you can pay for additional features.
G2’s main competitors include:
- Capterra
- SourceForge
- Experts Exchange
- TrustRadius
Company Product/Service
G2’s products/services depend on whether you are talking about their own product/services or someone else’
- Site viewers
- Review writers
- Software buyers
- Software sellers
For website visitors, reviewers, and software buyers, the product/service offered by the site is the site itself. However, the review site is the company’s name and reputation.
Without the website, there would be no subscribers, no sellable data, or any add-on products. Even though visitors aren’t necessarily customers, they’re the actual notoriety of G1 and therefore play an important role in its business strategy.
For merchants, the website is a golden opportunity to increase customer engagement by offering free services. Merchants can use these services to improve their profile so they can compete better against others. They can also offer paid services if they want to enhance their profile further.
G2 also provides its buyers with anonymous access to their own customer profiles so they can better understand their buying patterns. However, this is not the kind of personally identifiable information that can be misappropriated for fraudulent purposes.
G2 also provides its clients with the option to license the company’s entire library of videos and images as well as create custom video libraries. These licenses allow companies to use these videos and images as they wish, including rebranding them as their own. And finally, G2 helps companies transform their videos and images into social assets.
Marketing
G2’s best marketing is its own website. The various software companies who have accounts on G2’s website have an interest in G2’s success. The number of visitors the website gets, the more exposure the software companies get. Therefore, the software companies, buyers, and reviewers can do G2’s marketing for them.
Expenses
G2 has the usual costs associated with any platform, but they don’t have to keep product inventory because their products are digital.
They don’t need to be physically present at their office because they don’t have to interact directly with clients.
G2 needs technically skilled staff to keep its websites running smoothly.
Plan for Profit
G2 plans to make a profit by generating revenues from its various sources
- G2 Profiles
- G2 Buyer Intent
- G2 Reports
Even though G2’s value and fundraising are growing exponentially, making profits is not G2’s top concern at the moment. G2 is not earning any income because it is still in the early stages of development according to CEO Godard Abell.
Abel compares G2 to Yelp, which is a similar service to Google Maps. He suggests comparing G2 to social networks like Facebook.
At first, Facebook wasn’t earning any revenue from its services. It had been founded by Mark Zuckerberg who wanted to keep Facebook free. He knew if he started charging fees, Facebook would no longer be cool.
He knew that long-lasting success was more important than short-lived profits. He had enough confidence in his company and in himself to make short-run decisions for longer-run benefits. Of course, Facebook is now profitable and its shareholders who invested in Zuckerberg have been handsomely rewarded.
It may be argued that Abel has a similar purpose. However, his current situation is not one where he sacrifices anything for it.
The fact is that G2 has a lot of powerful backers like HubSpot, Salesforce Ventures, and Marc Benioff. These companies are not going to allow G2 to fail because they don’t want to see their products go out of business.
How Does G2 Make Money?
As part of the free service, some profiles may be free. G2 CEO, Godard Abel, even acknowledges that the $27.8 billion dollar business, Slack, gets great exposure, despite not having paid for any premium services, because of its good reviews.
Regardless, many small business owners who don’t have the resources that Slack has would like to have more features than G2’s free account.
For such types of businesses, a paid subscription may be an alternative way to generate revenues.
Create a Google+ Profile
- Promote software
- Promote service
- Identify buyers
- Start appearing in G Suite reports that are used by hundreds of thousands of companies within the B2B Software industry.
- Before buying a new piece of tech, collect customer reviews from people who’ve already bought it.
- Display compelling customer reviews
- Display compelling customer quotes
- Display compelling customer videos
- Video reviews help engage consumers by showing them exactly why they should
- To improve their products, companies often get input from others who use them.
- Get necessary input to improve services
- To get the most out of your business, you need to listen to your customers’ needs and desires.
It should also be mentioned that G2 is continually developing SaaS-style subscriptions, so G2 profiles aren’t the only subscription that is an income source for G2. G1 track, for instance, is a platform that helps businesses optimize their software and platforms for maximum business output.
- Vendor data
- Invoices
- Renewals
- Compliance
Like G2 Profilers, G2 Track works on a freemium basis and has both free and paid options.
The G2 Buyers Intent service gives vendors access to viewer behavior so they can target their messages with precision.
You can use G2 Buyer Intent to learn:
- Which companies are looking at your product?
- Which companies are studying your industry
- What companies are doing research into your competitors’ websites?
- Which company would be best for contacting?
With this kind of business intelligence, you can develop an ABM (or any) marketing campaign that speaks directly to the unique wants and desires of your target audiences.
You can use G2 Buyer Intent to see when your current customers are actively looking at competitors’ products. If they aren’t, then you won’t be able to know that they’re making a purchase decision until it’s too late.
As mentioned before, G2 doesn’t charge for reviewing or rating any product. However, it does provide marketing services to some companies. According to G2, approximately 2% of their 56,000+ rated items have a “premier” status.
A high-quality video allows the seller to add their own videos and content to their listing pages, giving them full control over the look and feel of their listings. Additionally, they have complete visibility into which buyers are visiting their profiles, allowing them to better target their marketing efforts.
Since G2 offers a platform where vendors can license their own branded assets, vendors can use these branded assets to influence prospects by implementing them as they please. Vendors using this platform can also let G2 turn their branded assets into social assets for social networks like LinkedIn and Facebook.
This licensing includes:
- Quarterly reports
- Social assets
- Video reviews
- Other content that has been shown to influence prospects
G2 Funding and Valuation
Funding is not a major issue for G2. Although Rounds B and C were not available at the time of writing, it is clear that the funding for Round 4 was almost eight times greater than the $1 million raised by Auren Hoffman in 2013.
Other notable investors include Salesforce Ventures, Permira, HubSpot, and others.
According to investors, the value of G2 hasn’t decreased at all during the past four years.
Is G2 Profitable?
At this point, G2 isn’t making any profit. However, its leaders are spending a lot of their own money on growth.
G2 Crowd has not yet earned any profits but is still expanding rapidly. They are currently focused on increasing their user base instead of making money.
As stated before, because G2 is built on a freemium business model with a long-term, sustainable approach, following in the footsteps (and funding) of unicorn and “Godzilla” companies like Yelp and Facebook, both G2 and Abel are not under any immediate pressure to be profitable.
Conclusion: How Does G2 Make Money?
Here’s an overview of how we make money at G2 Crowd.
Overall, the concept behind G2 Crowd is pretty straightforward: it allows people to provide honest feedback about the software they’ve just purchased. By doing so, they can learn whether it’s worthwhile to invest in the product.
It has a very good reputation, and it allows business owners to discover the best technology solutions for their businesses.
That’s all for now…thank you for reading! We wrote this mainly to help people who are curious about our business model.
If there is any topic you think we didn’t cover in this guide, please send us an e-mail so we can answer your questions. We’d appreciate it if you shared this post with your friends too!
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