When we imagine market intelligence companies and how they operate, what often comes to mind is a voice. A dry, staid, boring voice dressed in a suit, using spreadsheets like some kind of crystal ball and calling out predictions while speaking in immense amounts of jargon and unnecessarily complicated what-ifs. What one doesn’t imagine is a quirky and irreverent wit, celebrating Elon Musk’s antipathy towards it and tracking how often company earnings calls tend to devolve into profanity. In the midst of picking fights with startup rockstars like Musk and analysing earning calls since 2008 for cuss words, CB Insights – a market intelligence company unlike any other – managed to break news of Walmart’s push into Agritech, even while getting quoted by the New York Times, Financial Times, CNBC, Reuters, and Bloomberg. The phrase ‘according to CB Insights’, is garnering more respect and authority in the market every day.
In a universe where the well-respected periodical The Economist is busy declaring that data is the new oil, companies which refine data to make it useful and usable gain new meaning and importance. While public companies are required to put out some information, private companies are under no regulatory compulsion to share their numbers. To analyze and predict the movements relevant to the super-secretive startup ecosystem, finding reliable sources of information to analyze can be quite challenging. Further, reliance on traditional credit bureaus to determine the financial health of the company can be misleading, as these are focused on negative signals to evaluate whether a company can pay its bills or not. There was a gap, especially in terms of the demands of the startup domain and among venture capitalists, for insights that helped determine which companies are doing well, and are good destinations for credit, investment, or acquisition.
It was this gap that Anand Sanwal and Jonathan Sherry wanted to fill when they started Chubby Brain. They had been working for American Express, and Anand found the data about private companies to be inadequate and unsatisfying, both in terms of the UI/UX as well as the latency. The two recognised that a new ecosystem was on the rise – one in which evaluating the health of private companies would be of immense strategic importance to entities looking to invest into private companies and ventures. However, when a large investment bank said they really liked Chubby Brain’s product but would never buy something called Chubby Brain, CB Insights was born.
Striking the balance between their edgy entrepreneurial spirit and the stuffy expectations of the serious individuals and organizations needing their business was a big challenge for CB Insights. The other was to find new and interesting ways to provide the data and analysis their customers required. Instead of looking at one source and trying to peg their entire analysis on a ‘smoking gun’ data point, CB Insights developed a set of immensely powerful big data tools to automate the process of collecting publicly available information about private companies. These automated tools crawl through about 100,000 sources daily, and complex algorithms analyze investor, company, and industry data to create a mosaic that is instructive in understanding the health of a company.
CB Insights structures the disparate data available for private companies in the market, using a powerful software platform that has an innovative analytics layer. The breakthrough dashboard offered by the company allows users to view the strength ratings of companies and VC firms, analyze market sectors, and chart out the social and financial relationships between different stakeholders in the industry. Once the platform and processes were ready, CB Insights embarked on a spree of measures to increase their traction and gain more exposure. Free industry reports, market maps, and conferences helped get the word out. But the real game-changer was the straight-talking, joke-cracking, and constantly-evolving CB Insights newsletter.
I love you, says Anand Sanwal.
Now that CB Insights had a reliable system in place, it needed an effective way to reach out to potential customers while showcasing their platform. They used the oldest channel in the digital marketing playbook – an e-mail newsletter – and turned it into a viral phenomenon that pushed the company into prominence. The newsletter featured fun titles that dropped names or bizarre thoughts (“wtf Peter Thiel?”, “fact: Twitter is a dud”, “mu ha ha ha: that Bezos laugh”, and “Elon Musk hates us”) while also sharing useful data points that they knew would cause people to react. By covering major developments in the VC and startup space, talking about their own upcoming events and upcoming product features, and listing all the major media mentions, CB Insights made the newsletter a constant reflection of the company and its presence in the market. In an era where innovative digital marketing holds considerable sway, Anand Sanwal kept it simple, engaging, entertaining, and promotional. In what was a personal touch, each newsletter ended with Anand saying that he loved the reader.
Today, nearly 440,000 people are subscribed to the CB Insights newsletter, though it’s impossible to tell if the success can be attributed to the puns, professional information, or the love. In any case, the newsletter brought the company the prominence it sought. CB Insights became a must-use platform for players in the private company ecosystem, including Venture Capital firms, Corporate VCs, media outlets, law firms, and investment bankers. By offering user-friendly functionality on a convenient platform that dishes out information and insights with ease, CB Insights made getting private company information as user-friendly as possible. Further, the platform enabled business executives to draw up market maps, conduct patent searches, check earning calls transcripts, and view an area or field of interest by sector, company, or investor profiles.
CB Insights was able to turn junk data into gold, and this is repeatedly highlighted by its incredible ability to cull out some pattern from otherwise useless data. By analysing earnings transcripts of over 10 years, the company was able to show that investors and company executives alike were far more focused on the iPhone than any other Apple product; a pattern reflected in that the company makes almost 70% of its revenue from iPhone sales. The value of such insight into the prominent movers and shakers of the technology industry and startup ecosystem was clear enough for the company to raise USD 10 million in September, 2015 from the low-flying, bi-coastal growth stage investment firm Pilot Growth Equity.
Their increased name recall and brand value, as well as the relevance of their data and insights, was best illustrated in the over 2200 mentions CB Insights received in the media in 2016 alone. CB Insights is transforming how the industry makes decisions, and is using data to tell you what’s coming up next in the rapidly-changing marketplace. The company sees itself as a replacement for consultants and staff, by providing the information companies need to make decisions in an easily digestible, and consumable form. Today, it boasts of clients like Sequioa, Citigroup, Spotify, Barrick, Cisco, Comcast Ventures, Mesa Ventures, Microsoft, GE, red hat, Dassault, NEA, Gartner, Norwest, and TDF Ventures.
Today, CB Insights is well on its way to becoming the Bloomberg for private company data; it remains to be seen if their irreverence for form but obsession with data collection and quality will drive them towards market leadership in the growing industry analytics space.
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