EP 437: SaaS $10m Raised, $8m+ 2015 Revenue, The Algorithmic Mckinsey with CB Insights CEO Anand Sanwal
Oct 4, 2016
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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.
CB Insights provides predictive intelligence for emerging technology trends and helps create a sense of urgency among senior management.
CB Insights has experienced significant growth with over 500 paying customers and a strong LTV to CAC ratio.
Deep dives
CB Insights: Providing predictive intelligence into emerging technology trends
CB Insights is a platform that offers predictive intelligence into emerging technology trends, startups, and corporate strategy. With customers like Cisco, Sequoia Capital, and Gartner, CB Insights provides valuable insights into industries being disrupted by technology. Their data helps companies create a sense of urgency among senior management by showing potential emerging startups and technologies. They aim to replace traditional decision-making processes driven by Google searches, gut instinct, and MBAs with data-driven algorithms.
CB Insights: Impressive growth and financials
CB Insights has experienced significant growth, with over 500 paying customers and a healthy seven to eight figure annual revenue. Their gross customer churn is at 10% annually, with net revenue churn being negative in many months. With a fully-weighted cost of customer acquisition at around $15,000, and an average customer lifetime value of $200,000, CB Insights has a strong LTV to CAC ratio. The company raised $10 million in its first and only funding round, and has a team of over 100 individuals.
The journey of CB Insights and lessons learned
CB Insights was founded in 2010, and the founders took into account companies like HubSpot, Viva, and Marketo as comparable companies in terms of valuation. The company has optimized for control and aims to remain founder-led. They charge customers annually and have a pricing range of $40,000 to $100,000, with an average of $40,000. CB Insights focuses on data-driven decision-making, aiming to surface valuable insights from vast amounts of data. They have also emphasized being patient and seizing the right opportunities along their journey.
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
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