Earlier this month, Gong’s CEO and Co-Founder Amit Bendov sat down with SaaStr Founder and CEO Jason Lemkin at SaaStr Europa 2024 to talk about all things AI and the lessons learned while scaling to billions. Back in 2015, Google AI beat the world chess champion easily. AI was starting to diagnose diseases better than doctors. Amit asked himself, “How hard would it be to understand customers better than salespeople?”
That was the idea for Gong, an early vision of an autonomous customer management system that could capture customer conversations, understand them, and turn insights into action. Believe it or not, Gong struggled to raise money because people didn’t believe that AI would be big one day.
In this session, you’ll learn what Gong’s CEO thinks about:
- AI-enhanced sales in two years
- Where we’re too optimistic with AI in the near term
- What the AI budget actually looks like
- B2B last year vs. summer of 2024
- How to handle coopetition
- What to expect next year
”We always felt that AI was going to change the world, but we always had to work with the limitations and possibilities of technology,” Amit shares. As founders, you need to figure out what works today, while looking towards tomorrow.
What Does AI-Enhanced Sales Look Like In Two Years
Everyone’s thinking about it. What does the future of AI-enhanced sales look like from Amit’s perspective? First, no drudgery. Reps spend about 75% of their time on non-selling tasks. If you measure the hours they’re customer-facing, it’s 25% or less.
Sometimes, it’s two hours a week; the rest is spent filling out forms, one-on-one meetings, forecasting calls, etc. Ideally, AI makes all of this go away, but even if we cut it in half, that’s huge.
The second is a blending of roles. No more SDRs, CSMs, AEs. They all may be converging into a single role. Over the last 20 years, SaaS companies have become hyper-specialized with very specific roles. This has advantages. It’s easy to train people on a small sliver but also creates a not-so-great customer experience.
It creates inefficiencies in companies because it’s hard to align the capacity of one group vs. another. But if you arm people with AI that can do a lot of those things, imagine the possibilities!
If you drive a black cab in London, it could take four years to get trained. But if you give someone an iPhone, suddenly they’re a taxi driver overnight. Equip every customer-facing person with the capabilities of how to do prospecting, proper discovery, and managing customer success. It’ll be a better experience for customers and the company.
Will AI Fully Replace A Lot Of These Roles
Amit is 99% convinced it will. People won’t be unemployed, but it’ll change. There weren’t any BDRs 25 years ago, and salespeople will be able to do much more with less effort.
Will a sales executive be able to manage the entire life cycle with AI? Will they be able to follow up on a deal or handle onboarding and deployment issues? A lot of companies are moving in that direction, especially in tech. It creates a better customer experience without the hyper-optimized fragmentation.
You create better relationships when the person who sold to you is the same person who delivers and ensures they’re up and running. It also provides more opportunities to sell more.
Can we get away with fewer sales professionals permanently? Will a sales rep be able to handle a $2M, $4M, or $10M quota with AI? “Yes,” Amit says. If we zoom out, this is the biggest revolution that has happened to humanity in all of history. First, it was the agricultural revolution. Then, it was the industrial revolution. Now, it’s the AI revolution.
There will be jobs that no one could have envisioned.
What Are We Too Optimistic About In Terms of What AI Can Do In The Next 24-36 Months
AI is evolving at a mindblowing speed. Every week, there are significant new developments in tech. Not small iterations, but each more promising than the next. AI isn’t 100% reliable, but 80% accuracy is incredible for those non-mission-critical jobs.
The one thing most people don’t understand is that it’s not very smart. If you’ve read system one versus system two thinking, GenAI is system one. It has incredible accuracy when you feed it one piece of text and have it generate another, but it doesn’t reason and can’t plan.
AI isn’t a panacea to everything… yet.
How close are expectations to what we can deliver today? Previously, CIOs and bigger customers didn’t want to discuss AI because it scared them. It was too science fiction. Now, people are asking what you’re doing with AI to increase productivity.
Some people don’t know exactly what AI can do, but they’re getting pressure from the market and seeing the potential.
Is There AI Budget Today, or Is It Repurposed
At Gong, they sell mostly to the sales function, so money comes from the existing budget. However, CIOs at large enterprises have the budget to try different things and see what they can do. AI budget is real, and so is the repurposed budget.
Is the AI budget impactful or minor? Think of it this way. Gong uses AI, but they don’t think of themselves as an AI company. They’re a revenue AI company aiming to increase revenue and sales productivity. There is budget for that, so you have to:
- Show the problems you’re solving
- What it means to a business
- Why that matters
- What it’s going to cost
You can do that with AI, and now, people believe it can work. People are moving from one solution to another and consolidating solutions, which is where the budget comes from. You can’t sell hype. You can only sell real business value.
If you go to a team and say, “I can do 70% of what your team is doing now automatically and at a fraction of the cost.” That’s a much bigger value potential for AI. So, yes, it makes sense to replace people with six-figure salaries who are punching cards and filling out expense reports.
Classic B2B SaaS Last Year vs. Summer ‘24
Where are we today? Last year was challenging for most companies, but it was a much-needed moment of clarity to focus on the things that matter and for companies to wake up. It’s not like it used to be, where it was very easy to sell.
Gong monitors how many upgrades and expansions they’re seeing, and it’s showing a positive trend. Not like 2021 post-pandemic growth, but definitely growth. Last year was all about rationalizing budgets and cuts, and now it’s back to growth. What’s driving it?
Companies overspent and overbought in 2021 and maybe overcut and underspent in 2022. Now, they’re rationalizing. Very few are doubling, with the median growth from public companies at around 20%. Very few companies are over 20% year-over-year.
But they are growing and getting funding. Canva is accelerating at 40% at $2.3b on one end, but Salesforce said next year will see single-digit growth. Where is the disconnect here?
Those companies are on a bigger scale, and many things are happening in the world. Some public companies have to be more cautious. If there is no innovation and you’ve maxed out your existing TAM, you’ll start slowing down.
So, you always want to think about your next move. If you grew by acquisitions that drove immediate growth, whatever you buy has to grow 20%, too.
Two Conflicting Things Are Happening: Consolidation and Innovation
Amit talks about Gong’s journey from a stand-alone product where everyone listens to reps to where they are today. “Our vision all along has been to build a platform,” he shares. They started by understanding where they could go today and where they could grow.
Gong was designed for prediction, engagement, and enablement in early 2017, and it took a few years to get there. Now, two conflicting things are happening: consolidation and innovation, and it’s important to keep an eye on both.
When Gong started, investors thought there were too many sales tools. There were about 100 at the time compared to about 10,000 for marketing. The macro pressure now is to see seller productivity and have one or fewer apps, with cost savings as a secondary consideration.
From that original 2017 design plan, Gong has three more big apps and ideas that they haven’t started coding yet. The motion is to consolidate and keep innovating and creating new categories.
Learnings from Going Multi-Product
To nail it, you have to fine-tune and iterate. Gong starts with one product and makes it really good so that success follows another. They learned at scale that it’s a lot more challenging to get sellers to sell something they don’t know than to sell something they’re great at selling.
So, Lesson #1 is: You should think about how to get the product out and how the company will learn to do products 5, 6, and 7. It’s a playbook you’re developing, and it’s not easy.
Gong is best-of-breed. Does that mean every product after the core product must also be best-of-breed? At Gong, yes. That’s what they sell: a quality product. “If we don’t deliver, we’re toast,” Amit says. Some low-cost operators can be successful without quality as the number one priority.
Lesson #2: You have to communicate what your product does. You can’t compete with someone doing it for ten years, so share what it does the same, what it does better, and what it does less.
Set the expectation. “We’re not better in everything, but we have a few compelling advantages to specific customers.” You don’t want to sell to everyone because some might not be a good fit right out of the gate. Instead, make sure whatever you deliver is outstanding.
Lesson #3: Regarding coopetition, you should be happy if hundreds of competitors are in your space because that means the category is long. You don’t want to dominate a small hill that doesn’t expand. And you should also be grateful for competitors because they make you better. You have to be to be able to compete with them.
At Gong, Amit talks to all of his competitor’s CEOs, takes them out to lunch, and even integrates with many of their products. Natural tension lives there, but ideally, you do what’s best for the customer in the end.
What the Next Year Looks Like
Times are much harder than during the Boom, especially for SaaS companies. Today, there are more approvals in a cycle. The CFO is interested in why you spend money. You may see orders of 37 seats instead of a round 50 because people buy exactly what they need.
It’s not a bad thing. It keeps it real. Everyone has to work harder to ensure you’re succeeding with weekly KPIs and tracking every deal. Not everyone loves intense accountability, but it works.
What does the next year look like? Gong is seeing and feeling customers buying and growing based on the number of seats they’re adding. As founders, you have to have a lot of optimism, and it’s hard to predict precisely how long it will take for the market to bounce back.
What’s On The Gong Roadmap Over the Short Term
”We’re within striking distance of our founding vision of an autonomous system for customer management,” Amit shares. It’s incredibly challenging technical work they’re taking on not to need to update your CRM at all, and the system understands it. GenAI is good; if it’s 90% right, that’s exciting!
If you bump into a substantial customer and don’t know who they are, you can tell the system, “Hey, what’s happening with this account?” It’ll create a brief for you and tell you everything you need to know in seconds. That’s huge.
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Amelia Ibarra, Khareem Sudlow
