SaaS Interviews with CEOs, Startups, Founders

EP 437: SaaS $10m Raised, $8m+ 2015 Revenue, The Algorithmic Mckinsey with CB Insights CEO Anand Sanwal

Oct 4, 2016

Anand Sanwal, CEO and co-founder of CB Insights, discusses the rise and fall of Cosmo, a company that overspent and failed. They also talk about fundraising in the SaaS space, evaluating companies and setting valuations, and CB Insights' launch year, customers, funding, revenue, and team size.

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ANECDOTE

Cosmo.com Experience

Anand Sanwal, CEO of CB Insights, recounts his experience at Cosmo.com during the dot-com boom and bust.
He learned a valuable lesson about unsustainable business models: "If you buy something for 2 and sell it for 1, you will not make it up in volume."

ANECDOTE

Expansion at Cosmo.com

At Cosmo.com, Anand's role involved spending money rapidly to expand the business into new markets.
He was involved in launching warehouses and expanding to Europe, swept up in the dot-com exuberance.

ANECDOTE

Rationalizing Spending

Anand rationalized the spending at Cosmo.com by believing in economies of scale at higher order volumes.
The New York-centric model, however, didn't translate well to other markets where driving was more common.

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Anand Sanwal, CEO and co-founder of CB Insights, a company that provides predictive intelligence for emerging technology trends, startups, and corporate. Their customers include Cisco, Marketo, and Red Hat, just to name a few. Prior to CB Insights, Anand managed the $50 million Chairman’s Innovation Fund at American Express.

Famous Five:

Favorite Book? – Influence: The Psychology of Persuasion
What CEO do you follow? – Jeff Bezos
Favorite online tool? — Gmail

Do you get 8 hours of sleep?— “I wish”
If you could let your 20 year old self know one thing, what would it be? – “Be patient”

Time Stamped Show Notes:

01:42 – Nathan introduces Anand to the show
02:45 – “If you buy something for 2 and sell it for 1, you will not make it up in volume”
03:12 – He was in-charge of spending money
- 03:25 – Sent to London for Cosmo Europe
- 03:40 – Overspent
04:00 – Rationalizing the expenses
04:45 – Worked in American Express after Cosmo
06:25 – Salary in American Express
- 06:55 – “Decided to take the plunge”
07:30 – CB Insights
- 07:46 – Every industry is under attack by technology
- 08:09 – Monthly customer pay
- 08:34 – “Use our data to create a sense of urgency”
- 09:20 – Tracking the competitors
- 10:00 – Using algorithm on the data
10:30 – Number of paying customers
- 10:45 – Average of pricing
11:25 – Total MRR last August
11:40 – Hoping for 8-figure revenue this year
12:12 – Team size
- 12:25 – Some are based in New York
13:05 – Exact MRR last month
13:30 – “Everybody pays upfront”
14:14 – Individual customer acquisition
- 14:40 – Gross revenue churn
15:20 – Lifetime value
- 15:29 – 20% churn just to be conservative
- 15:49 - $200,000 lifetime value
16:16 – Funds raised
16:46 – Most customers are VCs
18:18 – Jon Sherry is the other founder
19:18 – No current acquisition talks
19:32 – Connect with Anand through his website and Twitter
21:05 - The Famous Five

3 Key Points:

Do not be afraid to take the plunge—there are risks but just do it.
Things happen for a reason and believe in your life plan.
There’s no absolute certainties in life—only right places and right times.

Resources Mentioned:

Toptal – Nathan found his development team using Toptal for his new business Send Later. He was able to keep 100% equity and didn’t have to hire a co-founder due to quality of Toptal developers.
Host Gator – The site Nathan uses to buy his domain names and hosting for cheapest price possible.
Freshbooks – The site Nathan uses to manage his invoices and accounts.
Leadpages – The drag and drop tool Nathan uses to quickly create his webinar landing pages which convert at 35%+
Audible – Nathan uses Audible when he’s driving from Austin to San Antonio (1.5 hour drive) to listen to audio books.
CBInsights.com – Anand’s website
@cbinsights – Anand’s business’ Twitter handle
@asanwal – Anand’s Twitter handle
Show Notes provided by Mallard Creatives