The Exchanges

Q Can you start off by telling us a little bit about yourself and the origins of CB Insights?

A Sure thing. Uh, so I am the co-founder and CEO of CB Insights. Uh, you can think of the company as a Bloomberg for private companies. So what we do is we track Financings, exits, venture capital, angel investment, etc., all related to private companies and the trends and sort of underlying intel that the, that data offers. Um, I worked prior to, uh, CB Insights at American Express, so I ran, I was in their corporate venture group, their corporate M&A group, and then ultimately ran a fifty million dollar innovation fund that the company was, that the company had. Um, and so I was there for seven years, learned a lot at Amex, but always wanted to do my own thing, um, and saw an opportunity in the marketplace. I just was sort of underwhelmed by the data that was out there, so myself and a few folks from Amex left, and, and we began CB Insights.

AI assessment note: “myself and a few folks from Amex left, and, and we began CB Insights”

Q How do you do that? Do you do any activities to really foster that company culture?

A Yeah, I mean, we, you know, I think we started with sort of our principles, right, around our culture, um, and so we wanted to say, okay, well, what do we, what do we believe in, and that was sort of the first thing, and then what we try to do is ensure that there's activities and tactics and strategies that are consistent with that, so it's everything from little things, like we, you know, experimentation is a big part of what we want to do, so we take a few days off every A few months, and we kind of have, like, what we call pitch and demo day, where anybody from the business, from anybody in the organization can propose ideas, and we spend three days trying to build those. You know, everybody gets a hundred dollar gift card when they join, so that way they can, um, if they want to just, you know, try something out, you know, whatever it might be, buy a piece of software, buy a book, whatever it might be, like, they can do that. You know, we try to, I think it's, I think the challenge is that, and I saw this at Working at a big company is that culture often can just seem like words on paper. Um, and so how do you actually put strategies and tactics in place that sort of reinforce that? So we're, I think we're still figuring out some of that, but I think we've got a good, you know, a good set of sort of practices we do. We just started something where we do as we've gotten big…

AI assessment note: “we have, like, what we call pitch and demo day”

Q Well, the models clearly work very well for CB Insights, and so then if you could single out one key determinant of your success with CB Insights so far, what would you say it's been?

A Yeah, one thing. Wow, that's a good question. Um, I mean, I think the biggest thing has been, we've been very lucky to some degree with the people that we've gotten on board, right? So everybody from our first engineer, Bobby, right, who was an intern, who, like, yeah, I would say that I didn't even know how to hire a good engineer at that point, um, nor did John, who's my co-founder, and we just happened to stumble into Bobby, right? And he was an intern, he was awesome, you know, ended up becoming our first Full-time hire. You know, our early team just was really phenomenal, and I think, to some degree, I'd like to, I'd like to believe it was, uh, our talent assessing and, and evaluating people, but to some degree, I think we got fortunate that we found some really talented people. After Bobby, we hired a guy named Alex and Amit, and we just got a, we got a little lucky that our foundation of the company was, was just really rock-solid. Um, and then I think, you know, culturally, this is sort of a second reason, I think culturally, like, we are extremely resourceful as a gang, um, and so I think that's been, that's been very helpful to us to sort of grow, um, as we have.

AI assessment note: “the biggest thing has been, we've been very lucky to some degree with the people”

Q How do you do that? Do you do any activities to really foster that company culture?

A Yeah, I mean, we, you know, I think we started with sort of our principles, right, around our culture, um, and so we wanted to say, okay, well, what do we, what do we believe in, and that was sort of the first thing, and then what we try to do is ensure that there's activities and tactics and strategies that are consistent with that, so it's everything from little things, like we, you know, experimentation is a big part of what we want to do, so we take a few days off every A few months, and we kind of have, like, what we call pitch and demo day, where anybody from the business, from anybody in the organization can propose ideas, and we spend three days trying to build those. You know, everybody gets a hundred dollar gift card when they join, so that way they can, um, if they want to just, you know, try something out, you know, whatever it might be, buy a piece of software, buy a book, whatever it might be, like, they can do that. You know, we try to, I think it's, I think the challenge is that, and I saw this at Working at a big company is that culture often can just seem like words on paper. Um, and so how do you actually put strategies and tactics in place that sort of reinforce that? So we're, I think we're still figuring out some of that, but I think we've got a good, you know, a good set of sort of practices we do. We just started something where we do as we've gotten big…

AI assessment note: “we kind of have, like, what we call pitch and demo day”

Q Sure. No, absolutely. I speak to a lot of startup founders, and they say, you know, unit economics will work themselves out over time, and they don't have a centrality of thought and mindset on unit economics from the early days. Do you think one needs to have unit econ central from day one, or do you think it is something that startups can scale into, so to speak?

A Yeah, I think they can scale into it. I think one of the challenges in a subscription business is, you know, you've got your first set of customers, right? And just as an example, Maybe their renewal rates are really high, right? And that's maybe because the founders are doing, you know, have a direct line into them, and so the customer's super happy, and, you know, everything's going really well, and then you take that one or two years of data, and you say, well, that's our lifetime value of customers. It's going to be amazing because nobody ever churns, and actually, we only upsell them, and then you build your entire model around that, and then you run into the risk of, well, as you scale, that that is actually not going to be the case. You know, those are Very peculiar customers in the sense that they were sort of early adopters, or, you know, you just had a personal connection with, or any number of factors, and so then you build your model in a way that isn't actually a reality. So I think, like, you know, being data-driven, having a hypothesis is important. The key is, though, I think, not to use bad data to make all those projections, right? And then just knowing up front, you know, if it's going to require an immense amount of scale for the economics to work out, It's probably worth looking at history to see, hey, has any other company achieved something like that? Put…

AI assessment note: “Yeah, I think they can scale into it.”

Q You said no exit earlier being the desired angle that you're rushing towards. What are the next five years hold for you and CB Insights then? What does that vision and pathway look like?

A Yeah, I mean, I think when we think of our clients, right, they're these large enterprises we're trying to figure out how to grow. So I think us building sort of this operating system to help them grow is where we want to be. From a technology perspective, it's really building kind of a machine learning driven management consultant. Basically, you tell us what What your challenges are, and we will curate the data for you. We will run the calculations on it, and we will create the presentation that you can use to your board of directors to convince them to do some transformational action. So I think that's what we're building, right? It's a very hard, substantial problem, but we think if we can do that, huge opportunity for us to build a really big business and also, you know, make our clients Have their organizations forward.

AI assessment note: “building kind of a machine learning driven management consultant”

Q For sure, no, absolutely. I do want to start this day, Anand, on the theme of funding. It is the 20 Minute VC after all, but with that, when we chatted before, you said to me that revenue funding is the best Kind of funding. So talk to me, Anand. What leads your thinking here, and why do you believe this?

A Yeah, you know, I still stick to that. There are three main reasons before that I think revenue funding is the Cheapest form of capital, and I'll kind of dial into these. Two, it provides clarity on where you as an organization and your team should focus, and then third, I think it helps achieve product market fit the quickest, right? So on the point about cheap capital, I think this one's the easy one. Revenue from clients is not dilutive, right? And then at the same time, it sort of has this double benefit of actually validating what you're building and telling you what you're building is real or not real, right? It's You know, you're not chasing a ghost and that you're building something of value. So I think that's the point on cheap capital. On clarity, I would say everybody at CB Insights knows every day when we come into work who we serve. It's our clients, first and foremost, and then each other. And I know that's sort of a talking point that everybody says, but, you know, in our case, that clarity is very real, and it's very important, right? So at a fast-growing company, you know, there's never a lack of things that we want to do, and so minimizing distraction is important. And so, We've been able to just focus on clients. It minimizes distractions for our team and for our senior leaders. You know, for our senior leadership, many of them have come, I think of them as V…

AI assessment note: “Revenue from clients is not dilutive”

Q I love that element of a nicely, a slight kind of collective of misfits, and I think me and Fred very much say the same with Stride. I do want to ask though, given your internal scaling internally, operationally before, and then scaling the team as the leader with CB, where do you often see founders make mistakes maybe when it comes to scaling the team? Are there commonalities there?

A Yeah, so again, I'll just kind of speak to our mistakes, right? I try to learn from other founders who've been there, but I would say that I've made plenty of mistakes, and John and I have made plenty of mistakes on our own when it comes to scaling. I think on the people side, right, one is not realizing quickly enough that we might need a different type of leader or talent as we scale, right? The sort of adage of different wars need different generals, right? Sometimes I think that's Is true. I think one of the other things that we've not done enough, and I think we finally are sort of doing it, hopefully going to do a better job of it, is actually getting, as we've gotten bigger, getting our senior leadership team together more. They are busy hitting their goals, growing out their organizations. They don't often get an opportunity to talk to each other, maybe as much as they should, and so getting them together more frequently, and sometimes in, for, you know, just activities that aren't just about work, I think is going to be really important, and I'd say the other kind of leadership challenge we've had, and This is, I think, mostly my fault. I still, in my mind, think of us like a 25 person startup. Now we're 210 people, and so when we were 25, everybody knew what was going on. It just sort of happened through by osmosis, and I think I haven't done as good a job at communic…

AI assessment note: “one is not realizing quickly enough that we might need a different type of leader”

Q is kind of quite out there, so to speak, Anand. Is there ever a question in your mind, and I think this often, I receive them at midnight every night in the UK, and I always read it on my balcony, and sometimes I sit there and go, like, wow, that really is out there. Is there ever a question in your mind of, oh, is this too out there?

A Yeah, I mean, we do, and the team sometimes will rein me in, in particular, but I think, you know, what we don't want to be is plain vanilla. We want you to either love us or hate us, but we want you to have an opinion, right? And I think that's one of the things where in B to B, especially folks want to play it safe, right? And We want you to be entertained. We want you to learn something. We want, often we'll say the things that people in our industry are saying, but nobody actually says out loud. And so I think that's part of it, right? But it does, you know, we end it with, I love you. It does rub people, some people the wrong way, but I would say those people are the minority and they're probably not people who are going to become our clients, right? Like we're okay with that. Like we have a certain personality as an organization at CV insights and you're going to buy into the product, but you're also going to buy into that. And then again, like the numbers don't lie, right? We crossed 500,006 weeks ago. We're probably at 520,000 now. You know, like it just keeps growing. So the formula is sort of, if there is a formula, it's working. But I think, you know, the key is that you're going to have a view I don't like it, and I want to unsubscribe, and we're totally good with that.

AI assessment note: “Yeah, I mean, we do, and the team sometimes will rein me in”

Q Can I ask you what seems like a very stupid question, but being my show, I can just about get away with it. How do you define real business? I'm intrigued.

A You know, I mean, I think of businesses as I'm not in the business of trying to find an exit, right? Like I tell the team, I'm not sure I'm ever going to have a better idea than CV Insights, so why the hell would I want to exit it? And what we found is the better a business we build, the more options open up, right? And so that doesn't mean that if you have equity in the company that it'll always be locked up or anything like that, but a real business to us is one that's not reliant on a flip, is not reliant on selling out to Somebody who values it in some esoteric way, it's a business that's fundamentally valuable.

AI assessment note: “a real business to us is one that's not reliant on a flip”

Q is kind of quite out there, so to speak, Anand. Is there ever a question in your mind, and I think this often, I receive them at midnight every night in the UK, and I always read it on my balcony, and sometimes I sit there and go, like, wow, that really is out there. Is there ever a question in your mind of, oh, is this too out there?

A Yeah, I mean, we do, and the team sometimes will rein me in, in particular, but I think, you know, what we don't want to be is plain vanilla. We want you to either love us or hate us, but we want you to have an opinion, right? And I think that's one of the things where in B to B, especially folks want to play it safe, right? And We want you to be entertained. We want you to learn something. We want, often we'll say the things that people in our industry are saying, but nobody actually says out loud. And so I think that's part of it, right? But it does, you know, we end it with, I love you. It does rub people, some people the wrong way, but I would say those people are the minority and they're probably not people who are going to become our clients, right? Like we're okay with that. Like we have a certain personality as an organization at CV insights and you're going to buy into the product, but you're also going to buy into that. And then again, like the numbers don't lie, right? We crossed 500,006 weeks ago. We're probably at 520,000 now. You know, like it just keeps growing. So the formula is sort of, if there is a formula, it's working. But I think, you know, the key is that you're going to have a view I don't like it, and I want to unsubscribe, and we're totally good with that.

AI assessment note: “Yeah, I mean, we do, and the team sometimes will rein me in”

Q So one element that struck me was you said there about clarity over serving your customers. I guess on the other end of VC funded businesses, do you think maybe too many founders today serve VCs as their customers, so to speak?

A Yeah. I mean, I think that's the reality. You can have three masters, right? You can have your clients, you can have your team, and you can have investors. And in our view, you can balance two of them. And I think clients and team actually are very symbiotic. People like building products for clients. If we take care of our clients, they pay our bills. I think it's that sort of triangle, that sort of three-way thing becomes really complicated, and then you get pressures that maybe aren't always good for some of the other factions. So I think there is a little bit of playing to the investor market right now as an entrepreneur, and that's because a lot of these businesses aren't real businesses, right? Like, they are reliant on raising additional capital, and so You kind of have to play that game, but I don't know if you're trying to build something for the long term, if you're trying to build wealth as a founder, if you're trying to build wealth for your team, I'm just not sure that's the best way to go.

AI assessment note: “Yeah. I mean, I think that's the reality.”

Q And then, would you say that all subscription-based companies don't necessarily need VC funding?

A Yeah, so I, I don't, you know, absolutes are a tough thing, right? So I would say there's no absolute rule. I, you know, I think generally entrepreneurs rush into raising funding. Um, you know, they view it as, uh, success, right? And so you think, I look more at funding as, you know, if we're, if we're cooking something, you know, funding is potentially an ingredient, uh, but it's not necessary. So, Um, but I think subscription SaaS businesses, you know, especially the kind that we have, which is, you know, let's say, 30 to 35 K average ticket, you know, if you can get out there and get funding from customers, well, we, you know, we like to consider ourselves revenue funded, um, that's the best type of capital, you know, it's, it's, it's cheap, and it validates the product, and you get great feedback from customers who, um, want you to improve, so I think if you can avoid it, For as long as possible. It's a good thing. You'll also have more leverage at the time when you do fundraise, um, because you're coming to them from a position of, of strength. You know, you're not asking for sort of a handout to survive. Um, so I think, you know, there's a lot of benefits to it, but there's, you know, there's certain businesses, certain, um, things that require a lot of capital early. So I wouldn't say it doesn't work for anybody, but I, you know, in SAS businesses, you probably, um, Um,…

AI assessment note: “funding is potentially an ingredient, uh, but it's not necessary.”

Q So why did you choose to not take VC funding? Because I'm sure it was a possibility. It always is for you, but, but why did you choose not to?

A Yeah, I mean, I think I wanted to, we wanted to build a business, um, you know, one in a way that was sort of inherently sustainable, and we're playing, I'd say, the very long game, um, and so we wanted to make sure that we had a good product, we had, um, economics that worked, um, and we don't, we don't have any religion against fundraising, you know, we, we very well may raise, and we get interest fairly frequently nowadays, um, But I think we wanted to do it at a point where we felt good that the company was a real company and that we weren't, um, relying on an investor, um, just to survive. So I think when we do take money, if we take it, it'll be when it's really more gas in the tank to help us grow quicker. Um, so that's kind of, you know, the genesis of it. I, you know, I left Amex to be my own boss. Uh, and so in the beginning, especially, I wanted to make sure that, You know, myself and, and the folks that started the company with me were really calling the shots. Um, I think the other thing that's happened sort of as a result, as of just learning how we've done things is, uh, not having investors has given us extreme clarity of purpose. And so by that, I mean, our goals are really just two things, take care of the team and take care of customers. And if we do those things, I think the rest works out. Uh, And so, it's just made life very simple, you know, the team work…

AI assessment note: “we wanted to build a business, um, you know, one in a way that was sort of inherently sustainable”

Q And then, would you say that all subscription-based companies don't necessarily need VC funding?

A Yeah, so I, I don't, you know, absolutes are a tough thing, right? So I would say there's no absolute rule. I, you know, I think generally entrepreneurs rush into raising funding. Um, you know, they view it as, uh, success, right? And so you think, I look more at funding as, you know, if we're, if we're cooking something, you know, funding is potentially an ingredient, uh, but it's not necessary. So, Um, but I think subscription SaaS businesses, you know, especially the kind that we have, which is, you know, let's say, 30 to 35 K average ticket, you know, if you can get out there and get funding from customers, well, we, you know, we like to consider ourselves revenue funded, um, that's the best type of capital, you know, it's, it's, it's cheap, and it validates the product, and you get great feedback from customers who, um, want you to improve, so I think if you can avoid it, For as long as possible. It's a good thing. You'll also have more leverage at the time when you do fundraise, um, because you're coming to them from a position of, of strength. You know, you're not asking for sort of a handout to survive. Um, so I think, you know, there's a lot of benefits to it, but there's, you know, there's certain businesses, certain, um, things that require a lot of capital early. So I wouldn't say it doesn't work for anybody, but I, you know, in SAS businesses, you probably, um, Um,…

AI assessment note: “funding is potentially an ingredient, uh, but it's not necessary.”

Q And how's your hiring strategy changed then over time?

A Yeah, so I mean, I think, you know, we've, it evolves, right? So I think, um, I think there was a great blog post. I think it was by one of the GitHub guys. He basically said, you know, organizations start to break down at 25. And so I think we sort of started to see that, right? So we were a very flat organization. Everybody knew what everybody was doing. We were all sitting right next to each other. Um, and then as you get bigger, um, you know, I think what we started to look for is Sometimes a little bit more senior folks who kind of have been there, done that, who can come in and help us avoid some of the pitfalls that we've, we've, you know, in the landmines we've run into over time. Um, you know, but I'd say the really, you know, so I think we hire maybe slightly different type of person from time to time now. Um, I think we've become a lot more rigorous in terms of our evaluation. So we used to not do reference checks, or we used to do them, but they were really very superficial, right? It was like, hey, I like Harry. You know, I don't, the reference checks are sort of just like a formality, right? And now I think when we go into references, we probably, and when we get to references, we already like you at that point, but when we get to references, I'd say one out of three candidates fall out of getting an offer based on what we learned from references. So I think we ha…

AI assessment note: “we've become a lot more rigorous in terms of our evaluation”

Q Well, that's very, very kind of you, but I would love to get started today with a little bit on you for those that maybe didn't get a chance to listen to round one. How did you make your first foray into startups and come to found, as we just discussed before the show, my entire reading universe, which is CB Insights?

A Um, my first foray into startups was joining what is now a pretty infamous company in New York City startup history, which was Cosmo.com. This was during the first .com explosion. We raised hundreds of millions of dollars. Our business model, if you were to boil it down, was essentially buying things for two dollars and selling them for one dollar and, you know, hoping somehow that that would work out in volumes. And, you know, I think interestingly enough, it's sort of a business model. We're seeing some current startups trying to copy today as well. It didn't end well, as you might expect. Made a lot of great friends at Cosmo, learned a lot of great skills. I think I also learned how not to build a business.

AI assessment note: “my first foray into startups was joining what is now a pretty infamous company”

Q I can't not ask. On that question, what's the best answer you've had?

A Yeah, so there's no, there's no best answer. I'd say, like, it is situational, right? I would say, at the most general level, there's sort of two components to a good answer, right? First is, they've done the homework on the company, right? So they can sort of articulate who our customers are, how they think we make money, and sort of the basics of the business. And then I'd say the people who really take it to the next level are the ones who do functional or role specific preparation, right? So as an example, if somebody comes in for a product role and they've actually signed up for a free trial and they can say, Hey, I like this. And here's some things that have you thought about this, right? I think that's, that shows like a level of insight. That's really good. So that second part is more functional, right? If somebody's coming in for marketing, you know, they've looked at our marketing assets, they'll have some ideas about what they like. Hey, what about this? Like, I think All of a sudden, like, it goes from it's Right. And then I can respond and say, hey, we thought about that. Here's what didn't work. Oh, I never thought of that. That's a great idea. I write that down. Right. Like that's a really helpful conversation because somebody's, they're adding value and that's an incredibly good sign at the interview stage if somebody's adding value that early.

AI assessment note: “there's sort of two components to a good answer, right?”

Q I can't not ask. On that question, what's the best answer you've had?

A Yeah, so there's no, there's no best answer. I'd say, like, it is situational, right? I would say, at the most general level, there's sort of two components to a good answer, right? First is, they've done the homework on the company, right? So they can sort of articulate who our customers are, how they think we make money, and sort of the basics of the business. And then I'd say the people who really take it to the next level are the ones who do functional or role specific preparation, right? So as an example, if somebody comes in for a product role and they've actually signed up for a free trial and they can say, Hey, I like this. And here's some things that have you thought about this, right? I think that's, that shows like a level of insight. That's really good. So that second part is more functional, right? If somebody's coming in for marketing, you know, they've looked at our marketing assets, they'll have some ideas about what they like. Hey, what about this? Like, I think All of a sudden, like, it goes from it's Right. And then I can respond and say, hey, we thought about that. Here's what didn't work. Oh, I never thought of that. That's a great idea. I write that down. Right. Like that's a really helpful conversation because somebody's, they're adding value and that's an incredibly good sign at the interview stage if somebody's adding value that early.

AI assessment note: “there's no best answer... there's sort of two components to a good answer”

Q kind of a neutral friend. I do want to discuss, though, the people behind the content, so to speak, because we chatted before, and you said that pedigree is overrated. Now, as a university dropout, that's clearly something that made me very happy to hear. But what did you mean when you said pedigree is overrated? Maybe how's that led your thinking and approach to team building with CB today?

A For us, right? But I think for us, like, pedigree has sometimes led us astray. We are, because of how we've grown and how we've sort of been brought up, we like people who are hungry and ambitious and, you know, who have a bit of the chip on their shoulder. And CB Insights, you know, as nicely as the newsletter is growing, is still very much a challenger brand. And so what we find is sometimes people with pedigree don't have that chip on their shoulder, right? And they don't have The ability to work in an environment that's a challenger, right? And they need, and it's where things maybe aren't as structured, right? So it's, it's again, not to say that we don't want to hire people who come from great backgrounds or do, but I think being open to all sorts of people has been really good for us. You know, I think if, you know, John and myself, if somebody looked at us, if an investor looked at us back in the day, they'd have said, yeah, these are, you know, had some startup experience, went to a big company. I wouldn't fund these guys, right? Like I think, you know, to some degree, That's fueled us to some degree, but I think it's also the entire CB Insights to some degree, and I mean this in the nicest way, like, we're like this big eclectic group of misfits that I think if somebody just from the outside looking in, you know, looked at, they'd say, oh, yeah, I have no idea why thi…

AI assessment note: “we like people who are hungry and ambitious and, you know, who have a bit”

Q Would you say that rig is necessary for all startups?

A Um, I think it is, I mean, I think it comes in phases, right? I think in the beginning, when nobody knows who you are, and nobody knows if you're going to be doing anything useful, you know, it's a little bit of beggars can't be choosers, right? Um, especially, you know, if you, if you've already sold a startup and, you know, have a pedigree, it's a different story, but I didn't have any of that, so, you know, nor did John, so I think in the beginning, it's a little bit of, uh, you know, you, um, hope that you land good people, and, um, You hopefully, if you don't, you figure it out quickly. We just got very fortunate in that, like, our first few teammates were just really all, like, across the board amazing, so, but, you know, if they weren't, we'd have had to, hopefully, we'd have taken corrective action quickly. I think over time, as we're scaling up, we now know, we now know what opportunities we offer to somebody new, and we now, I think we just know our value in the marketplace a little bit, and so we want To be a little bit more rigorous about the types of people we bring in, you know, I think things like culture, which I probably underestimated early in the early days of the company becomes really important. So we've interviewed people who are, you know, amazing developers or amazing at content or maybe great salespeople, but, you know, we just felt like they would be, …

AI assessment note: “I think it is, I mean, I think it comes in phases”

Q And you just mentioned about assessing investments and VCs assessing investments. You've seen, I'm sure, an incredible amount of data and metrics. So if you were building a consumer tech company, what are the metrics you most look for, or most look at?

A Wow. So this is, I mean, I'm definitely out of my depth here a little bit, right? I'm, I'm a B to B guy. You know, I think the thing that, um, folks do look for, you know, in talking to investors, so I'm going to sort of channel my inner VC a little bit. Um, you know, I think it's virality, right? So is it growing? Are people telling each other about it? Um, you know, I think that's important in terms of, is it just getting adoption? Is it getting out there to be a successful consumer product company? You need, you know, Millions or tens of millions and hopefully hundreds of millions of users ultimately. So, um, virality is really important. I think the other big metric that at least I hear from my friends who are in venture is, um, engagement, right? So whether it's daily active users or monthly active users, right? So there's a lot of companies that come out of the gate with, you know, buzz and people get really interested, but then they lose interest, right? And I think that's one of the challenges with, Uh, consumer tech companies is that people have a lot of options, right? And there's always a new app, and there's always some new gizmo out there. So, you know, you might be able to get that initial buzz, but then how long does, how long, or how does it sustain itself, uh, becomes super important. So, you know, those metrics around engagement, uh, you know, active users ove…

AI assessment note: “I think it's virality... the other big metric that at least I hear... is, engagement”

Q kind of a neutral friend. I do want to discuss, though, the people behind the content, so to speak, because we chatted before, and you said that pedigree is overrated. Now, as a university dropout, that's clearly something that made me very happy to hear. But what did you mean when you said pedigree is overrated? Maybe how's that led your thinking and approach to team building with CB today?

A For us, right? But I think for us, like, pedigree has sometimes led us astray. We are, because of how we've grown and how we've sort of been brought up, we like people who are hungry and ambitious and, you know, who have a bit of the chip on their shoulder. And CB Insights, you know, as nicely as the newsletter is growing, is still very much a challenger brand. And so what we find is sometimes people with pedigree don't have that chip on their shoulder, right? And they don't have The ability to work in an environment that's a challenger, right? And they need, and it's where things maybe aren't as structured, right? So it's, it's again, not to say that we don't want to hire people who come from great backgrounds or do, but I think being open to all sorts of people has been really good for us. You know, I think if, you know, John and myself, if somebody looked at us, if an investor looked at us back in the day, they'd have said, yeah, these are, you know, had some startup experience, went to a big company. I wouldn't fund these guys, right? Like I think, you know, to some degree, That's fueled us to some degree, but I think it's also the entire CB Insights to some degree, and I mean this in the nicest way, like, we're like this big eclectic group of misfits that I think if somebody just from the outside looking in, you know, looked at, they'd say, oh, yeah, I have no idea why thi…

AI assessment note: “pedigree has sometimes led us astray. We are... we like people who are hungry”

Q Would you say that rig is necessary for all startups?

A Um, I think it is, I mean, I think it comes in phases, right? I think in the beginning, when nobody knows who you are, and nobody knows if you're going to be doing anything useful, you know, it's a little bit of beggars can't be choosers, right? Um, especially, you know, if you, if you've already sold a startup and, you know, have a pedigree, it's a different story, but I didn't have any of that, so, you know, nor did John, so I think in the beginning, it's a little bit of, uh, you know, you, um, hope that you land good people, and, um, You hopefully, if you don't, you figure it out quickly. We just got very fortunate in that, like, our first few teammates were just really all, like, across the board amazing, so, but, you know, if they weren't, we'd have had to, hopefully, we'd have taken corrective action quickly. I think over time, as we're scaling up, we now know, we now know what opportunities we offer to somebody new, and we now, I think we just know our value in the marketplace a little bit, and so we want To be a little bit more rigorous about the types of people we bring in, you know, I think things like culture, which I probably underestimated early in the early days of the company becomes really important. So we've interviewed people who are, you know, amazing developers or amazing at content or maybe great salespeople, but, you know, we just felt like they would be, …

AI assessment note: “I think it is, I mean, I think it comes in phases”

Q And how's your hiring strategy changed then over time?

A Yeah, so I mean, I think, you know, we've, it evolves, right? So I think, um, I think there was a great blog post. I think it was by one of the GitHub guys. He basically said, you know, organizations start to break down at 25. And so I think we sort of started to see that, right? So we were a very flat organization. Everybody knew what everybody was doing. We were all sitting right next to each other. Um, and then as you get bigger, um, you know, I think what we started to look for is Sometimes a little bit more senior folks who kind of have been there, done that, who can come in and help us avoid some of the pitfalls that we've, we've, you know, in the landmines we've run into over time. Um, you know, but I'd say the really, you know, so I think we hire maybe slightly different type of person from time to time now. Um, I think we've become a lot more rigorous in terms of our evaluation. So we used to not do reference checks, or we used to do them, but they were really very superficial, right? It was like, hey, I like Harry. You know, I don't, the reference checks are sort of just like a formality, right? And now I think when we go into references, we probably, and when we get to references, we already like you at that point, but when we get to references, I'd say one out of three candidates fall out of getting an offer based on what we learned from references. So I think we ha…

AI assessment note: “we've become a lot more rigorous in terms of our evaluation”

Q And you just mentioned about assessing investments and VCs assessing investments. You've seen, I'm sure, an incredible amount of data and metrics. So if you were building a consumer tech company, what are the metrics you most look for, or most look at?

A Wow. So this is, I mean, I'm definitely out of my depth here a little bit, right? I'm, I'm a B to B guy. You know, I think the thing that, um, folks do look for, you know, in talking to investors, so I'm going to sort of channel my inner VC a little bit. Um, you know, I think it's virality, right? So is it growing? Are people telling each other about it? Um, you know, I think that's important in terms of, is it just getting adoption? Is it getting out there to be a successful consumer product company? You need, you know, Millions or tens of millions and hopefully hundreds of millions of users ultimately. So, um, virality is really important. I think the other big metric that at least I hear from my friends who are in venture is, um, engagement, right? So whether it's daily active users or monthly active users, right? So there's a lot of companies that come out of the gate with, you know, buzz and people get really interested, but then they lose interest, right? And I think that's one of the challenges with, Uh, consumer tech companies is that people have a lot of options, right? And there's always a new app, and there's always some new gizmo out there. So, you know, you might be able to get that initial buzz, but then how long does, how long, or how does it sustain itself, uh, becomes super important. So, you know, those metrics around engagement, uh, you know, active users ove…

AI assessment note: “engagement, right? So whether it's daily active users or monthly active users”

Q Well, that's very, very kind of you, but I would love to get started today with a little bit on you for those that maybe didn't get a chance to listen to round one. How did you make your first foray into startups and come to found, as we just discussed before the show, my entire reading universe, which is CB Insights?

A Um, my first foray into startups was joining what is now a pretty infamous company in New York City startup history, which was Cosmo.com. This was during the first .com explosion. We raised hundreds of millions of dollars. Our business model, if you were to boil it down, was essentially buying things for two dollars and selling them for one dollar and, you know, hoping somehow that that would work out in volumes. And, you know, I think interestingly enough, it's sort of a business model. We're seeing some current startups trying to copy today as well. It didn't end well, as you might expect. Made a lot of great friends at Cosmo, learned a lot of great skills. I think I also learned how not to build a business.

AI assessment note: “my first foray into startups was joining what is now a pretty infamous company”

Q Can I ask you what seems like a very stupid question, but being my show, I can just about get away with it. How do you define real business? I'm intrigued.

A You know, I mean, I think of businesses as I'm not in the business of trying to find an exit, right? Like I tell the team, I'm not sure I'm ever going to have a better idea than CV Insights, so why the hell would I want to exit it? And what we found is the better a business we build, the more options open up, right? And so that doesn't mean that if you have equity in the company that it'll always be locked up or anything like that, but a real business to us is one that's not reliant on a flip, is not reliant on selling out to Somebody who values it in some esoteric way, it's a business that's fundamentally valuable.

AI assessment note: “a real business to us is one that's not reliant on a flip”

Q today, Finn Barnes quite rightly said on the show, I think, that it's not the quantum of capital that maybe concerns him about the VC ecosystem today, but the velocity to which it's deployed. I'd love to hear your thoughts, Anand, maybe being slightly removed from this, so to speak. How do you think about the current VC ecosystem, and Finn's statement there about the velocity of it being deployed?

A Yeah, so I think right now one of the most cancerous things that some And I wouldn't say it's all, but some prominent investors in sort of emerging tech companies have done is to push a narrative that more funding increases your likelihood of success. That idea is not supported by data. It's just folklore. And so what's happening, I think, is companies go out and raise more money than they need or should raise, which hurts, ultimately hurts the teams and the founders. And, you know, I think it's immensely rational for why these investors push this narrative, right? They're They're dealers of capital, and so it makes sense that companies get addicted to it, so it's in their business interest to do so, but I would say right now, what we're seeing really, and I'm surprised it's continued, because I candidly thought when I looked at data a couple years ago, it would have subsided, is like the foie growing of startups, which is sort of, it's bad for tech, it's bad for entrepreneurship in general, because we're just sort of Thanks for great long-standing companies, and the data doesn't suggest that overfeeding startups with capital is a route to success, right? We can find an example here and there, but if you look at over time, there's no evidence to suggest that just stuffing companies with capital is what makes them more successful.

AI assessment note: “the data doesn't suggest that overfeeding startups with capital is a route to success”

Q And that's just too tempting for me not to pick up on. I'm also always intrigued by the boom and bust element. It's something that, very honestly, I've never lived professionally through. How did seeing the boom and bust of those early days, and then also in 2008, really affect your operating mentality today, do you think, with CB Insights?

A Yeah, I mean, it's very illuminating, right? So I was a millionaire on paper. Cosmo was expected to go public. We'd filed for our S-One. I was trying to get friends and family to buy equity in Cosmo and thank my lucky stars that we actually didn't get any allotments, because none of those people would be friends of mine anymore, and then just sort of Oh, went away, and then had to look for kind of a real job, and you know, I mean, I think I still, outside of, you know, the years of CBI, it was the year and a half or so that I learned the most in, so really great experience, but I think, yeah, seeing it, how quickly it can go from good to bad was a good lesson to have early in my career.

AI assessment note: “how quickly it can go from good to bad was a good lesson”