My bear case on Glean
Glean raised a $200M Series D at $2.2B valuation in February [1]. I think investors overpaid for it. Here’s my dissenting brief:
First, my justification for this round: every employee needs to search. Glean has all the enterprise data. They slap a RAG on it, create an AI copilot, and voila you’ve got an amazing product that employees will rely on to do their work.
So, why do I think investors overpaid for Glean?
1️. When You Solve Everyone's Problem, You Delight No One
Every employee needs to search.
But, what a salesperson searches for and how they consume that information is very different from an engineer.
This means that an enterprise-wide search copilot will be a compromise that will not delight any one user persona.
Without delight, utilization is anemic.
A good contrast to Glean is Moveworks. It’s an enterprise search player, but at its core, it helps IT support teams scale by not having to answer the same questions over and over again. No surprise that IT teams LOVE Moveworks.
2️. But, Why Can’t they Focus On Solving The Needs Of One Persona, E.G. Sales?
$2.2B valuation -> Glean thinks it will be worth $20B
$20B market cap -> Glean can’t have a small TAM
Glean needs a big TAM -> every enterprise employee is their user
Every enterprise employee is their user -> They can only build a general purpose product
3️. But, What’s Wrong With General Purpose Products?
GenAI. That’s what’s wrong. It has disrupted both the supply & demand side.
On the supply side, GenAI enables fast-moving startups to solve specific pain for specific personas. For instance, at HeySam, we hyper-focus on the needs of sales teams that sell with SEs. That’s a small market, but our customers LOVE us.
On the demand side, buyers realize that they can finally get solutions for their specific needs. This breeds dissatisfaction with general purpose vitamins like Glean.
📝 Conclusion
Glean is great, but I don’t think it is $20B great. GenAI has opened up an opportunity for specialized products putting a ceiling on growth of general purpose products.
📖 REFERENCES
