8. Pioneers. with Matt Gorniak, CEO of Threekit

Matt is a serial entreprenuer. Before running ThreeKit, he built CPQ products for Oracle and Salesforce Commerce Cloud. He's always trying to solve the yet-unsolved problems we all knew existed but no-one was brave enough to tackle. ThreeKit is chaning the way you can configure products. How can it help make eCommerce more efficient and eco-friendly? Why and how did Matt start the G2.com enterprise software review portal? We also hear the biggest learning from Matts' career and ... find out where Pasikurowice are located.

Piotr Karwatka: Hi,Matt. Thanks for accepting my invitation.

[00:00:47] Matt Gorniak: Hey Piotr. Thanks for having me. And it's nice to hear my last name pronounced Gorniak that doesn't happen very often. So thank you.

[00:00:55] Piotr Karwatka: Yeah, maybe you will tell us why it's that easy for me to pronounce it?

[00:01:01] Matt Gorniak: Yeah,, I'm happy to. Actually I grew up not too far from where your headquarters is. It's a town that rolls off the tip of your tongue. It's called Pasikurowice, and…

[00:01:13] Piotr Karwatka: It's 20 kilometres from me, right.

[00:01:16] Matt Gorniak: Yea, it is! And, it is a small town and we, left Poland,which back then was, obviously, under the, communist rule and behind the iron curtain in '81 and we moved to Germany. And so that was a very, I would say, a big event in our lives.

So I grew up in Germany after that. And, if you remember, most people remember back then couldn't really come back and visit as you please, because there was the iron curtain. So anyway, we grew up there and I had a great childhood there. And I got into computers actually through my friend, a good friend of mine, Sven. Actually his father worked for a bank. He had a Commodore 64. I don't know if you remember those computers, but, that was…

[00:02:08] Piotr Karwatka: It was also the first computer of Ulrike Mueller, my guest before the founder of Demandware, she told us that she also started with Commodore 64.

[00:02:18] Matt Gorniak: Right. That was a very popular computer in Germany and, and I'm sure all over Europe, but that's interesting. I should, should talk to her [Ulrike] about that! But, yeah, his father, they to use it for business applications and obviously. We were like eight, nine years old. So we were like, what else can you do with it? It's fun! And so we found games. So my first experience with computers was downloading games or trading them from friends (the tapes) youknow, learning how to do back then there was no graphic user interface, so you had to learn basic commands. So that was a lot of fun. And then that whole world really accelerated with computers that came one after another. Back then,then the Amiga came, which was really a breakthrough. Like the graphics were astonishing.

[00:03:12] Piotr Karwatka: Then you moved to the US, right?

[00:03:17] Matt Gorniak: I was 17 and we moved to the US. And the computer actually interestingly enough sort of has a story of my life because when I moved to the US at that point, I had an Amiga computer and, you know, we were getting into bulletin boards in Germany, you know, modems dialing up and didn't know anybody here. I was 17. I mean, obviously I met friends in high school, but I got around into computers, started making friends on bulletin boards, which back then was no one knew about that stuff. You know, that was. That was something that, probably wasn't very cool to talk about in class.

[00:03:51] Piotr Karwatka: It was like, the early nineties, I guess.

[00:03:54] Matt Gorniak: Yeah. That's right. Early nineties, like '92, '91. And so friend, a good friend of mine Clayton through that, which we actually scaled the company together that actually became part of Oracle. So my love for computers was there. Now I went to college, I started and, you know, I took business, and I got a job at Caterpillar and then GE, and so, you know, from the perspective of an immigrant, like that was great. These are great companies, great brands, great products. But I always had this yearning, like, hey, I'm missing something, this computer revolution. At that point, it was obviously red hot, right? Like .com and everything. So I had to find a way into tech that was sort of, this need I had.

[00:04:40] Piotr Karwatka: So the first job you, you took were actually out of the,software business, and then you joined BigMachines , right? The company that was eventually acquired by Oracle. So what does this company doing actually?

[00:04:57] Matt Gorniak: Yeah, no. So there's a quick segue story because before BigMachines. Actually, this friend of mine that we became good friends, Clayton Donley,who started the company called OctetString, which was right before BigMachines .And, you know, I was going to business school. He was actually full-time on it.He wrote, one of the first, federated FLDAP directories. I mean, you're talking like 2001, you know, and to make that story short, it was a pure startup and he built the tech, you know, he had a team behind him, I helped him sell. And that really got me thinking you know, now in business school, this startup thing is really cool. and I really want to, like, you know, it got subsequently acquired by Oracle, so I though, Hey, this is really a lot of fun, growing tech. And back then was like the wild West, right pricing. What's the pricing? You, you learn how to establish value. You know, it's very interesting stuff. I mean,your six people actually put something in three, four, and you deal with international customers. And you [00:06:00] just ship them a one megabyte file and they wire you money, you know? It was very interesting.

[00:06:05] Piotr Karwatka: That's a good story. You said this was 2001, right?

Matt Gorniak: I guess, 2001, 2002. And then in business school, I also met the CEO from GE medical systems. So at that point though, I really wasn't sure that I had my calling yet, you know, and I'm like, you know what, I want to join their management training program, which was Six Sigma Black Belt. Because at that time,GE was a super-hot company in terms of management experience. And I'll make,you know, I really need to learn, you know, I worked at a couple of companies.We did this small startup actually ultimately was successful, but what's the pattern here? How do I learn? So I went to GE and here's a segue to BigMachines at GE the point, the company, I was sort of adjacent to those projects. I was not in IT there or driving projects, but process improvement. And some of those projects where I had to deal with sales efficiency, so configuration how to put a quote together. And that kinda got me into that field. So when I bumped into the founder, Goddard, of BigMachines  and Chris Shutts, the other founder, they we redoing that, you know, on demand, which I thought was really cool. So that's kinda how that story started.

[00:07:24] Piotr Karwatka: Wow. That's, that's really interesting. In the, in the background there was, you know, the internet bubble. How has it impacted your career? Can you say, it changed anything in your plans or whatever?

[00:07:35] Matt Gorniak: I would say so, but not directly, like indirectly. I felt like you know, I was sort of that strange age where like I was too young tofully... or put it this way. I didn't start in tech right away out of college.So I kinda missed it, you know. It kind of went too fast. It kinda went by. And so I had this, this energy, like wow, I missed this amazing thing. Like how do I not miss it again? You know, that was that energy. And indirectly without knowing it, I mean, it didn't impact me directly. I guess it's indirect-direct because BigMachines  before me, GodardAbel, and Chris Shutts started it as a marketplace in like '99 purely they're part of that tech bubble, starting a marketplace for complex manufacturer products. You know, the story there is like his father, you know, and he went to MIT, Chris Shutts, went to MIT and they said: Hey, you know, selling books online, that's easy.  Let's sell complicated engineering products.

[00:08:39] PiotrKarwatka: So it was a kind of a B2B marketplace?

[00:08:41] Matt Gorniak: Well, that was the idea, you know, with .com. And then very quickly that turned out to be really hard to do. You know? Yeah. So the segue to how .com helped in our career is, is that yes, it was going to be a marketplace, but then you had to convince people back then to put all their product information online.  That was really hard. Yes. You're going to factoring companies, which at that point weren't dearly adopters of tech. That's hard to do. and so very quickly within a year again, before I got there, he pivoted that because the back end to the marketplace was the ability to configure products, to price them and generate a quote. So that, that idea was born from the.com bubble, but then became not a marketplace, but a configuration, you know, CPQ application. So that was that's the segue there.

[00:09:37] Piotr Karwatka: So they, they started as a marketplace, pivoted into a product pretty complex as it sounds so. Can you, can you maybe, say more? What was the biggest problem they are that we're trying to solve with this product?The CPQ product.

[00:09:56] Matt Gorniak: Right. So, I mean, back  then we focused on manufacturing products,right? And by the way, because of the pivot, which again was, you know, Godard and Chris were, you know, saving the company from, how do we make sure this things, you know, becomes successful? But the problem that was, there was very real, which is. You know, think about, back then, your company's selling power generation. You know you have a sales team that sells a generator to hospitals,to office buildings, right? When that architect says, Hey, why don't you give me a quote? We just had a wonderful discussion. You came out to meet me, give me a quote for that generator. That may take you a week. Or a couple of weeks.Because all the answers, even though there were sort of like programmatic had to be done by hand, like, okay, so pure, you know, what, how much power do you need? How many elevators do you have? And so like sizing. And so you had an engineer for that.  But 80% of the questions could be automated, right? Like, you know, if you have this, you need that much power, so you don't need to do it by hand. And all the way through like the paper process of like, if you pick this attached as documents. So it was a very laborious process that could be automated. And so that, that was basically manufacturing specific and then became, and then it became basically a, you know, a problem that all the industries tried to tackle, which we did them later was SteelBrick for software companies for, you know, at the end it became a thing called configure price, quote, CPQ.

[00:11:42] PiotrKarwatka: Right. So actually that business value that this product was  providing to the market was speeding up the whole sales process by adding some automation on top of it and moving away it's laborious manual work needed to make the order for those complex products, right?

[00:12:07] That's right.

[00:12:07] Matt Gorniak: That was the other problem. Right. You have this manual process and then you quote, and then at some point someone says, yeah, let's do that. Then you have to sort of like re-engineered again. So you can place it into your ERP system, the actual parts. Yeah. So that was the whole translation issue. And then maybe last thing I'll just say on the.com helping this because,because it was a marketplace to begin with. We were the first one, one of the first ones I see that I don't know who else did it web based, but I, from what I know, the first ones that had a web based application to do that, which was really big because if you wanted to, you know, these things were called like when there were these projects, these things, these projects were internally branded as like a sales tool, according tool in yeah.

When you have a company with a thousand reps, You know, back then, it was very common to send CDs, which may sound crazy to people listening to this, but you would send a CD, so a rep could load it in on their laptop. And you had all sorts of problems with version control and you'd change the product rule. Let's say the pricing change- to pick a simple one.

[00:13:27] Piotr Karwatka: Sounds like hell!

[00:13:31] Matt Gorniak: Being web-based big, you know, sort of pivot became a big competitive advantage because for obvious reasons you make a change. There it is.

[00:13:41] Piotr Karwatka: Yeah, makes total sense. And it was a great success. I guess, this product and BigMachines? It grew a lot! Then you eventually sold it out to Oracle, right?

[00:13:53] Matt Gorniak: Right, and eventually it was sold. Although, technically I left before that we, we actually had, you know, we brought in a management and also a fund to help us keep scaling. And then. We moved on to the next adventure, but yeah, eventually it is still part of Oracle's CX suite.  And doing well.

[00:14:12] Piotr Karwatka: So, what was your biggest lesson from BigMachines? What have you learned, working in this product?

[00:14:19] Matt Gorniak: You know, there's a poem my daughter's learning right now.And, you know, she's almost seven. "Try, try again”. And so basically, you know, obviously, you know, we just kinda kept grinding. You know, it was very progressive. We learned, kept grinding, worked really hard and just kind of kept at it, I would say. So I don't think grinding alone gets you there, but you know, you constantly innovate. You try to, and I would say that was all incremental, right? Customers. You'll problems. Yep. You have a vision. You just keep at it. It definitely was not an overnight success. It was a, you know, for me, almost eight years for Godard- a 12 year overnight success, you know, it just takes a while.

[00:15:05] PiotrKarwatka: That makes perfect sense! And, what I saw, very often is that the two things like first this, overnight successes, they rarely exists in the enterprise software. And the second, notion I made talking with, with all the other guests in CTO to CTO podcast was that this, from day zero to success.It's usually 10 years, eight to 10 years. And it's, it's never  shorter

[00:15:30]MattGorniak: even in consumer goods, it's the odds are really against an overnight success. People talk about it. It's a, it's a cool thing. It's like a lottery winning, right? It's fun to talk about. But the odds are not with you right? To invent the next Facebook is, you know, that's a lottery ticket.

[00:15:50] Piotr Karwatka: So, what was your next challenge you took after a BigMachines?

[00:15:56] Matt Gorniak: Yeah, so, so basically we stepped back and took a little time off to reflect and, and one of the things we wanted to do is something a little bit different and, Godard myself,  Tim Handorf who had, who worked with us, a BigMachines, Mark Myers as well, BigMachines and Mike, Mike Wheeler. We kinda got together and said, Hey, let's build something beautiful. That solves a problem, but still kind of in the B2B world.Yeah. And at that time we, we, we struggled with, how to select software. So we kind of thought about BigMachines , you know, when it was sold to Oracle hadlike 400 some employees. So it was getting to the point where we were buying tech ourselves.  Substantially. And then the question is like, Hey, you know, here's this new email marketing tool,we're going to think about this or that one. And then, well, how do you really judge? And we realized pretty quickly, like [00:17:00] the analyst reports covered enterprise only at that time. Still kind of do, really big apps, and that's not for us. So we're like, wait a minute. The connection was made for us. Like how come we use TripAdvisor and Yelp to pick out restaurants and hotels and how come there's no such thing for, for software to get insight from other users. And thus, we, we started G2.

Piotr Karwatka: G2 crowd, the, review portal for the enterprise product.

Matt Gorniak: Actually, originally it was called G2 Crowd and we just rebranded it two years ago, last year to G2, but that's right. It's now the world's largest marketplace for, for software reviews. So it's been, it's been quite, quite good.

[00:17:44] Piotr Karwatka: I remember it the, before the rebranding, even. it was quite popular. You started this in 2000?

[00:17:51] Matt Gorniak: Yes. Correct.

[00:17:53] Piotr Karwatka: Makes perfect sense. and, how it, how it goes. Like it's very popular right now. How do you solve this, you know, marketplace problem? And the challenge is, we need to have users to do the reviews. On the otherhand, you need to have, the vendors, to put there their products.

[00:18:13] Matt Gorniak: What was the idea to grow with so successfully it takes a while.And this is kind of you. And I talked about a little bit, like you've got to start small, you know, like we started with one category cause it's infinite,right? The world is infinite. Really. so, you know, we started with one category or two actually CRM and marketing automation, which we knew a little bit, not that our voice mattered ever. It was all about user reviews. But if the system was giving us like really crazy stuff, we could, we could see like,Hey, this isn't working. Right. We knew enough to calibrate it, but really it's all about, and I would see a two-sided marketplace is definitely in my opinion,my experience, the hardest thing I've ever done. Because you do need, it's like an empty store, right? You need to convince the vendors and the buyers that there's value in it, you know, one day. but it, but I think, you know, we could spend hours on this topic, but I think, but I think the one thing I would say, well, we pivoted well pivoted where we really focused on,never really pivoted was more like we focused on: it's authentic user reviews with high quality.

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