Anand Sanwal on building CB Insights via a B2B newsletter that gets a lot of love from data and technology enthusiasts
“I love you.”
Three words you would least expect at the end of a business newsletter. And definitely, not in a business-to-business (B2B) newsletter promising data and insights on technology markets, companies, and trends.
But that’s how Anand Sanwal, Co-founder and CEO of research firm CB Insights, signs off the company’s B2B newsletter to its 640,000-odd subscribers – a welcome departure from the staid, formal tone associated with business emails filled with data and insights.
Admittedly, the CB Insights newsletter is a window into the market intelligence firm’s larger approach to delivering research: providing data-driven insights in fun, easy-to-consume formats that cater to people’s shorter attention spans and their growing preference for evidence-backed analysis over anecdote-based ‘punditry.’
“As attention spans have shrunk, short, conversational, and highly visual research is more respectful of the reader’s time and that is the type of research we aim to provide,” Anand tells YourStory.
CB Insights' research spotlights current and emerging trends in technology, and is the result of mining data points from millions of unstructured documents, such as regulatory filings, news articles, company websites, earnings calls, social media, and patent filings, among others.
“I'd characterise our research as being of ‘higher nutritional value’, which means fewer words and more insights vs being full of ‘empty calories,’ i.e. lots of pages and words with minimal insight,” Anand says.
At its core, the CB Insights newsletter is representative of the company’s out-of-the-box thinking and innovations in customer engagement – all of which has helped cement its position as a leading source for data-driven insights on startups, technology, and venture capital.
The company’s clients include several Fortune 500 companies, including tech majors Cisco and Salesforce, and venture capital firms such as FirstMark Capital and Sequoia Capital. Although clients pay differing amounts based on the data and platform capabilities they want, the average annual subscription last year approached $70,000.
Much of its innovations on customer engagement have centred around addressing the people behind CB Insights’ growing client base.
This explains the fun and rather cheeky tone of its newsletter.
It also explains the focus on bite-sized commentary and shareable infographics, interspersed with links to media articles crediting CB Insights research and details of the company’s proprietary online and offline startup and tech events.
CB Insights’ newsletter strategy
For the most part, Anand’s signature “I love you” sign-off and sharp headlines have helped the CB Insights’ newsletter become one of the most popular B2B newsletters among tech, data, and startup enthusiasts.
The trademark sign-off initially began in 2016 as an experiment to see if anyone was reading the mailers.
It started with just “Love, Anand.”
That piqued people’s interest. Many wrote back asking what that was about. Others replied, “ha, ha.” The interest – for lack of a better word – emboldened Anand, who gradually “escalated things,” until eventually signing off the mailers with the now all-too-familiar “I love you.”
With that, the engagement jumped.
The reactions were aplenty – thankfully, largely positive and not without humour. Some wrote back saying, “I love you too,” others said his emails made them smile, and yet others said it inspired them to tell their team or significant other that they loved them.
“In general, the newsletter tends to get a fair number of reactions because it is a bit different in its voice and tone for a B2B newsletter. And we like this. We want readers to love it or hate it. Luckily, given its growth into tech’s largest newsletter, it appears more people love it than hate it,” Anand says.
True to word, the popularity of the CB Insights newsletter, which was started in 2010, is evident in its numbers. Its subscriber base has grown from just over 50,000 in 2014 to 171,000 by 2016, to now more than 640,000.
Credit for these numbers go also to the carefully crafted, irreverent headlines.
“Bye-bye,” “no more startup drama pls,” and “this might anger you,” are a few examples of these headlines – the kinds that leave subscribers curious and wanting to click through.
Indeed, these experiments with the newsletter have helped CB Insights win over and retain subscribers, many of whom consequently go on to sign up as paying clients.
“Many people are first introduced to us via the CB Insights newsletter. We offer a lot of free market landscapes and research via the newsletter, so we hope to enlighten readers about what is going on in technology in an entertaining, informal way,” Anand says.
Subscription-based revenue model
CB Insights holds back the majority of its research and data for its paying clients, who bank on the company to help them discover, understand, and make the right decisions faster and with greater confidence.
The company follows an annual subscription-based revenue model. “Strictly, annual subscriptions,” Anand emphasises.
And this model finds takers. Particularly, among the slew of global companies queuing up to make the right technology decisions – whether it be potential vendors, partners, or M&A/investment targets – to stay ahead of the competition and grow their own operations.
Annual revenues recorded by the B2B firm – which was bootstrapped, or what the CB Insights team likes to refer to as “revenue-funded,” for the first six years since its founding in 2010 – has jumped from the low single-digit millions until 2015-end, to now in the healthy eight-figures.
The company was initially funded by three grants from the National Science Foundation. At the end of 2015, it raised $10 million in Series A funding, led by technology growth equity firm Pilot Growth Equity.
“Being revenue-funded gave us intense clarity on who we serve and that was customers. As a result of that revenue-funding focus, we stayed intensely close to clients and saw that CB Insights had applications beyond helping merger and acquisition teams, venture capitalists, and bankers researching private companies for deals,” Anand says.
Undoubtedly, the company’s singular focus on enterprises with at least $100 million in annual revenue has also supported its growth, as organisations of this size typically spend millions every year on technology.
“We estimate there are 125,000 to 150,000 such organisations that meet these criteria. Today, we've penetrated less than one percent; we have massive room to grow,” Anand says.
CB Insights exclusive focus on customers looking to invest big and invest early in disruptive technology is expected to further propel the company’s growth, with its annual recurring revenue likely to reach $100 million in the next 18-24 months, Anand adds.
The genesis of CB Insights
Back in 2008, Anand and CB Insights Co-founder Jonathan Sherry saw how the role of technology was evolving rapidly, becoming ever-more critical for businesses operationally as well as strategically.
Anand explains that the duo saw how “…technology is exploding in three dramatic ways”:
1) technology's impact, importance, and influence in the enterprise is exploding, with technology no longer being about supporting the business, but actually becoming the business;
2) the number of people making technology decisions is exploding, with every team now evaluating and making technology decisions regularly due to the explosion of SaaS and the cloud; and
3) the number of technology companies you need to know is exploding, with real innovation coming from tens of thousands of private technology companies.
“We realised that these trends in technology were the future and saw that there is an immense and untapped opportunity to help clients discover, understand, and make better technology decisions. And we saw that nobody else was doing this,” Anand says.
And thus, CB Insights – or more accurately, ChubbyBrain, as was the company’s name at the time – was born.
With a name like ChubbyBrain, Anand and Jonathan were “trying to be hip and startup’y.”
But they quickly changed it to CB Insights after an investment bank the duo had spent a lot of time wooing said rather matter-of-factly, “We love the product and the data and what you guys are doing. But we can’t buy a product called ChubbyBrain.”
As a result, ChubbyBrain metamorphosed into the more serious CB Insights. “We kept the CB as an homage to our younger, dumber days,” Anand says.
Challenges and CB Insights team
Just like its name, the company’s challenges too have changed over time, says the Indian-origin entrepreneur.
“In the beginning, it was about how will we pay the team? I was paying the initial team out of [my] savings, which was very nerve-wracking,” Anand recalls. Before launching CB Insights, he was managing US card major American Express’s $50 million Chairman’s Innovation Fund and the CFO’s Strategic Planning Group.
Once Anand and Jonathan had effectively steered the team through the initial challenges in their entrepreneurial journey, more hurdles came. This time, in the form of scaling and culture.
“I tell the team that the only thing that will kill CB Insights will be ‘self-inflicted wounds’. This will be things like complacency, arrogance, not thinking of customers first, a loss of work ethic, politics, hiring mercenaries, a lack of prioritisation, etc. We have an absolutely gargantuan market opportunity ahead of us. We just need to avoid falling into many of these traps,” Anand says.
For this reason, the company pays special focus on hiring people, who can foster the right culture as the company scales. It looks for people who exhibit the 5Hs – hard-work, humility, high-standards, helpfulness, and hunger.
“We are trying to keep the excitement and entropy of an early-stage company while also getting the benefits of scale that size enables,” Anand says.
The CB Insights team of 310 members (up from 66 in the first six years) is one of the two major inspirations in Anand’s life.
The first is his parents, Shiv and Laxmi, who left rural Rajasthan in India in the late 1960s to set up a life in the US, a place where they neither knew anyone or the culture.
“My parents sacrificed a lot and worked day jobs while also trying various entrepreneurial ventures — everything from an ice cream store to a chemical manufacturing business,” Anand says.
“In reality, the risks my parents took were much larger than any risk I took. If CB Insights crashed and burned in the beginning, I'd have just gone back to working at some big company. They didn't have that same back-up plan. I've learned a tonne from them and benefitted immensely from their work and sacrifices,” he underscores.
His second inspiration, Anand says, is the CB Insights team.
Observing members of the team grow with the company, using this growth as an opportunity to learn new skills and take on more responsibility, is something he really enjoys seeing.
“We are a new company every 12 to 18 months given our growth. That can be jarring for some folks, but I’ve also seen people rapidly learn and take on more responsibilities and ultimately, achieve things that they probably would have felt ill-equipped to handle a year earlier. It’s like learning in dog-years, and it’s always great to see.”
Technology powering CB Insights
On the specific problem CB Insights set out to solve, Anand recollects how “poor” information about startups and private technology companies was at the time. It was what prompted the two co-founders to resolve to build a software that can extract unstructured data more completely, quickly, and accurately.
Today, CB Insights does exactly that.
“At the core, we extract structured data on technology companies and markets from millions of unstructured documents,” Anand says.
To do this, the company has built a machine learning software, dubbed the Cruncher. It can take a document, classify it into any number of what the team calls ‘life events’ – such as financing, partnership, vendor, HR and M&A, among others – and extract structured data from it.
“Because our methodology is not reliant on throwing human analysts at the problem, it scales and finds more data than anyone out there,” Anand adds.
The CB Insights platform also boasts a vertical search engine, which is built on top of the data and allows users to do broad searches of the data and create data visualisations, including market maps, in seconds.
These searches can range from “show me endpoint security companies" to "show me supply chain robotics companies based in the US that have raised at least $10 million within the last 18 months and which have commercial momentum".
CB Insights complements these offerings with research by its market intelligence analysts, as well as collaboration and workflow tools that allow enterprises to manage all their technology decisions on the company’s platform.
Investing in data
Now, the New York-based research firm – best known for predicting which startups will turn unicorns – is looking to extend its lead in private technology company data by doubling down further on data, Anand Sanwal tells YourStory.
For CB Insights, this will mean eyeing inorganic growth opportunities – something the company has already started to do.
In July, CB Insights acquired Dow Jones VentureSource’s data assets, which include private company valuations, data on deal service providers such as investment banks and law firms, and management teams.
The acquisition expands its private technology company data offerings, which currently date back to at least 1999, to now include data from 1983.
“We are doubling down on data so we can extend our lead in private technology company data. We are investing heavily here and continuing to look at M&A,” Anand says.
CB Insights has already looked at several M&A opportunities in India, but they haven’t yielded any results, mostly because valuations were disassociated from fundamentals.
“That said, we think there are some great data, information services, and software companies in India and are always looking out for companies anywhere,” Anand says.
“With India in particular, we are a great partner for data companies that serve global markets as we can plug them into our go-to-market engine. We have a playbook, amazing team, and tonnes of enterprise relationships that can accelerate the growth of these companies.”
“If anyone has suggestions or ideas here, I'd encourage them to reach out to me,” Anand signs off with a subtle call to action – much like his trademark “I love you” newsletter sign-offs that never fail to elicit a reaction from his subscribers.
Edited by Saheli Sen Gupta
India’s most prolific entrepreneurship conference TechSparks is back! With it comes an opportunity for early-stage startups to scale and succeed. Apply for Tech30 and get a chance to get funding of up to Rs 50 lakh and pitch to top investors live online.