20VC: CB Insights' Anand Sanwal on The Most Dangerous Myth Some Investors Have Promoted, Why Most B2B Content Is Crap and How To Make It Successful & Why Predigree Is Overrated and The Right Way To Scale Teams

Anand Sanwal is the Founder & CEO @ CB Insights, the tech market intelligence platform that ingests massive datasets, to answer complex questions and predict future trends. CB is the 9th best place to work in the US according to GlassDoor and one of the fastest growing SaaS companies in the US. To date, CB Insights has raised over $11m in VC funding, a topic Anand discusses at length in our episode today! Prior to founding CB, Anand held numerous roles at American Express including running a $50m Innovation Fund and managing the company's discretionary investment spend ($4-5Bn p.a.). Before American Express, Anand was one of the early team @ Kozmo.com, one of the most well-funded and infamous startups in NYC history. In Today’s Episode You Will Learn: 1.) How Anand came to found CB Insights from running American Express' $50m Innovation fund and the a-ha moment there? 2.) Why does Anand believe that revenue funding is the best kind of funding? What 3 elements does Anand believe it fundamentally allows? What does Anand mean when he says "most have 3 masters, you can only serve two of them at once"? Does Anand believe that founders today are treating their investors as customers? 3.) How does Anand distinguish between business that can be funded from revenue vs those that cannot? How does Anand think about the relationship between growth and margin? Why does it make sense for VCs today to push for the suggestion that startups need to raise big to grow? How can founders think about and respond to this? 4.) Why does Anand believe that most B2B content today is crap? What are the core pillars that make great B2B content today? How does Anand think about potentially going too far when it comes to the risque nature of the content? What advice would Anand give to B2B founders wanting to ramp up their game in content? Where do many go wrong? 5.) What does Anand mean when he says that "pedigree is often overrated"? How has that led Anand's thinking when building out the team at CB? Where does Anand see most founders make mistakes when it comes to both team and company scaling? What interview question does Anand find most revealing of an individuals' character? Items Mentioned In Today’s Show: Anand’s Fave Book: Influence: The Psychology of Persuasion As always you can follow Harry, The Twenty Minute VC and Anand on Twitter here! Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  We are back for another very special episode of Founders Friday with me, Harry Stebbings, at H Stebbings 1996 on Instagram with two Bs, where you can both submit questions and guests for future episodes, and it would be awesome to hear your thoughts and feedback there. But to the show today, and if you're anything like me, you guard your time religiously when it comes to both the content you consume and especially the newsletters you read. Well, today's guest is always one of my favorite newsletter reads, a friend and phenomenal person, and I'm so thrilled to welcome back for a very special round two, Anand Sanwal, founder and CEO at CB Insights, the tech market intelligence platform that ingests massive data sets to answer complex questions and predict future trends. And CB Insights is the ninth best place to work in the US, according to Glassdoor, and one of the fastest growing

• 0:43Harry Stebbings?

  SaaS companies in the US. To date, CB Insights has raised over $11 million in VC funding, a topic that Anand and I discuss at length in our episode today. And prior to founding CB, Anand held numerous roles at American Express, including running a $50 million innovation fund and managing the company's discretionary investment spend, about $4 to $5 billion per annum. But before American Express, Anand was also one of the early team at Cosmo.com, one of the most well-funded and infamous startups in New York City history. But before we dive into the show today, as a VC, making new investments and working with founders is your top priority. So instead of worrying about scaling your back office, you need a fund administration partner. Much like how Carter changed how private companies manage their cap tables and 409A valuations, Carter are now doing the same for fund admin. With

• 1:28Harry Stebbings?

  Carter's new, modern fund admin software and services, you get a real-time dashboard of your general ledger. You can securely share info with your LPs and issue capital calls, all from the same platform. You accept securities and request cap table access. So essentially, Carter simplifies how startups and investors manage equity, fund admin, and valuations, and you must check it out now at carter.com/20vc to get 10% off. That's carter.com/20vc. And speaking of special products there with Carter, I want to spend a minute to talk about Brex, the first corporate card for startups. Brex founders Henry Gay and Pedro built a payments business in Brazil, but found themselves rejected for a corporate card when they were in Y Combinator. They decided

• 2:10Harry Stebbings?

  To build Brex with instant online signup, no founder liability required and limits 10 to 20 times higher than standard cards. Pretty incredible, I know. And you can sign up for Brex today and get card fees waived by entering the code Harry during signup. Honestly, it really is a truly special service. And last but by no means least, you must check out StartEngine. StartEngine is the leading and largest equity crowdfunding site in the US. On StartEngine, you can invest as little as $100 in private companies. And these companies range from early-stage startups raising their seed round to larger companies raising their A, B, C, and beyond. And fun fact, now over 367 companies have raised capital on StartEngine from more than a staggering 41,000 investors.

• 2:51Harry Stebbings?

  And you can check them out today at startengine.com/20vc to invest before the IPO. But I want to dive into the show now. So without further ado, I'm thrilled to welcome back Anne Sanwell, founder and CEO at CB Insights.

• 3:10Speaker 01

  You have now arrived at your destination.

• 3:13Harry Stebbings?

  Anne, it's such a pleasure to have you on the show for a very special round two. So I'm so grateful to you for joining me again today.

• 3:20Speaker 02

  Thanks, Harry. It's good to be with you. It's been phenomenal to see the growth that you've had with 20VC.

• 3:25Harry Stebbings?

  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?

• 3:41Speaker 02

  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 dot com explosion. We raised hundreds of millions of dollars. Our business model, if you were to boil it down, was essentially buying things for $2 and selling them for $1 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.

• 4:18Harry Stebbings?

  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 2008 really affect your operating mentality today, do you think with CB Insights?

• 4:35Speaker 02

  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 S1. 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, I wouldn't say overnight, but pretty darn close to overnight, it all 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 at 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.

• 5:18Harry Stebbings?

  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 in mind, 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?

• 5:34Speaker 02

  Yeah, you know, I still stick to that. There are three main reasons before that I think revenue funding is the best source of funding, right? One, it's 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 better to get that feedback from the market very quickly. So 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

• 6:17Speaker 02

  clarity, I'd 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, I think of them as VC-backed company refugees. They've come from traditional VC-backed companies and they're amazed that they get to exclusively focus on building their organization and hitting their goals, right?

• 7:02Speaker 02

  There's no random investor requests around the board meeting that take them away from their objective of, of building world-class teams, doing world-class work. You know, I think us not being reliant, we kind of internally refer to it as on a sort of a VC sugar daddy to sustain ourselves, helps us do better work. And I'd say the final point and the sort of the clarity piece is, you know, we found that if we focus on clients, it actually helps us serve our team better. It creates new opportunities for them. It creates momentum in the org, right? Like selling is its own high and retention of customers creates a high. It lets them see the impact of their work in the hands of clients. And then a lot of our team are equity owners of CBI. And so now they also know that their ownership stake in CB Insights is becoming more valuable

• 7:47Speaker 02

  and that it's not getting constantly diluted with round after round of financing. And the final thing is on product market fit. I think this is talking to clients is, is what has gotten us there. You know, when we started the company, we thought CB Insights would focus on VCs, bankers and M and A teams. And, you know, we just talked to every customer who came in and some of them weren't of that ilk. They weren't bankers, VCs or M and A teams. And so what we learned by talking to them was that these clients who were mostly large enterprises were trying to figure out how to grow. And as a result of all those conversations, we figured out that, you know, we should be building sort of an operating system for corporate growth and using data to help these large enterprises transform and help themselves grow. And I think if we were not revenue funded, we'd have not seen that opportunity.

• 8:31Speaker 02

  I'm pretty sure that we'd have raised a bunch of money, we'd have burned time and effort on what's ultimately a total addressable market for that first segment of dealmakers. Probably one one thousandth the size of the one that we're tackling now, so.

• 8:43Harry Stebbings?

  And 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?

• 8:55Speaker 02

  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.

• 9:40Speaker 02

  If you're trying to build wealth as a founder, if you're trying to build wealth through your team, I'm just not sure that's the best way to go.

• 9:45Harry Stebbings?

  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.

• 9:54Speaker 02

  You know, I mean, I think of businesses, I think we posted on this, like, we're 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 CB 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.

• 10:30Harry Stebbings?

  No, I completely understand that definition. I do want to touch on kind of the decision making process behind revenue funded versus VC funded. Benedict Evans tweeted the other day, VC provides rocket fuel, but if you're building a lawnmower, hydrogen peroxide in the tank will not have good results. So what are the signs in your mind of whether one is a lawnmower or? A rocket.

• 10:51Speaker 02

  Candidly, I'm not sure what the tweet means, but I'll say that, and I'm loathe to give advice to entrepreneurs because I think there's no one path, right? I think that's probably one of my biggest concerns right now is that there does seem to be a narrative around we'll raise money and that's what makes you successful. So I think, you know, some businesses are capital intensive and require capital from the outset. Some businesses like ours, especially those, let's say in enterprise SaaS, can be significantly de-risked without outside capital you can revenue fund. You know, there's nothing wrong with raising outside capital and, you know, we ultimately did. But I think funding is ultimately just oxygen, right? It helps you live a bit longer. It doesn't make your business successful. I was just at a couple of startup events and I try not to go to many of these, but I went and they were actually quite good.

• 11:35Speaker 02

  And founders who were there shared their numbers, right? And so one company had raised over a hundred million dollars, was doing forty million in ARR. Another had raised about a hundred, was doing twenty five million. A third said they'd raised ninety and was doing thirty. You know, we've raised ten, haven't touched any of it, and are doing more revenue than all of those. So, you know, the narrative around that capital is required is the necessary link to grow fast and build a big business is one that is just rubbish.

• 12:03Harry Stebbings?

  I do agree with you there, but I do want to touch on the element that you mentioned there being how you've scaled those revenues with the limited funding. And you've said before about the importance of growth or margins. I'd love to hear your perspective on this with CB Insights and how you think about the dichotomy of growth and margins today.

• 12:19Speaker 02

  Yeah, so I mean, I think they are, they're sometimes in conflict. You know, for us, we focus on enabling capital efficient growth. So we never want to get sort of out over our skis in terms of any sort of activity that we're trying. And so it's really important, you know, we want to grow really fast and we've grown kind of at a hundred percent, you know, seventy to a hundred percent year over year for the last several years and continue to do that even as the numbers get bigger. But never at the sacrifice of growing just for the sake of growing, right? So all of our growth is from a unit economics perspective, highly sustainable, it's replicable. We're incredibly data driven in how we manage the company. And so, you know, we're never going to do something that we Don't think ultimately has a payoff.

• 13:02Speaker 02

  It could be risky and we'll do a couple, we'll make a couple of those risky bets that if they go sideways, we could lose all of our money. But in general, like we're incredibly sort of evidence driven in how we manage the company. So even though the margins could be low because we're pursuing growth, we're never going to do something that's sort of a negative margin. Just because we don't think that is a prudent way to build a business.

• 13:24Harry Stebbings?

  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?

• 13:43Speaker 02

  Yeah, I think they can scale into it. I think one of the challenges is in the 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 customers are 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. Customers is 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.

• 14:27Speaker 02

  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 upfront, 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 aside your Facebook and Google, because most of us aren't building Facebook and Google, no matter what our pitch deck might say, right? So I think like being realistic about, okay, well, I'm in this sector and the most penetrated or the biggest player in that sector has X percent of the market, right? If we got to that or even Half of that, would that make the unit economics work?

• 15:12Speaker 02

  I think people sort of spend economic principles sometimes with the hope of, "Well, just give me enough money and I'll figure out growth and eventually the lifetime value and the cost of acquisition will work itself out." That's a precarious place to be and, you know, if you're a founder who wants to be your own boss, right, like it's also a very quick way to build a company that you own a minority percentage of, because it always requires capital to keep growing.

• 15:38Harry Stebbings?

  No, absolutely. I mean, remaining on economics and last question while we're on economics, being the theme of the VC ecosystem 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 on that, maybe being slightly removed from this, so to speak. How do you think about the current VC ecosystem? And Finn, the statement there about the velocity of it being deployed?

• 16:04Speaker 02

  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 of years ago,

• 16:48Speaker 02

  it would have subsided, is like the foie gras of startups, which is sort of, it's bad for tech, it's bad for entrepreneurship in general, because we're just sort of overfeeding startups. And again, I don't think that that makes for great, long-standing companies. And, 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.

• 17:17Harry Stebbings?

  No, I couldn't agree more. And I think, all right, pay. Wrote a brilliant piece on this in TechCrunch once, so absolutely aligned to that. I do wanna kind of maybe slightly move off the funding element and discuss one of, as I said before, my favourite elements of CB Insights, which is the B2B content element. So, towards me about this, because when we chatted before, you said that most B2B content is crap, but need not be. So, let's start on why it's crap. So, why is most B2B content crap, Stian and?

• 17:44Speaker 02

  Yeah, I mean, I think it sort of fundamentally comes down to, for whatever reason, B2B content providers don't write for human beings, right? They sort of have a perception that their clients are these robots, I think, that just wanna read buzzwords and just wanna read about product announcements. And so they make it sort of hopelessly uninteresting. And so I think, you know, that's one of the critical parts of writing good research or good content, is to write it as if you want it to be read, right? And so, I think sometimes just reading back what you've written and saying, "But I actually wanna read this," is very enlightening. Because you'll read a lot of stuff, and I've done this, and I think my team does this all the time, will read stuff and say, "Well, you know, that actually isn't that interesting,

• 18:27Speaker 02

  like I thought it would be, and but the way it's come out isn't." So it's either fully rethink my thesis, or just start over, or just scrap the whole idea together. But yeah, I'd say most of it today in B2B, and we, I love this because the bar is so ridiculously low. You know, most of it's just not written to be read, right? It's written because somebody thinks that content marketing is worth doing, and so they put somebody kind of who's average on it, and average folks churn out average stuff.

• 18:54Harry Stebbings?

  No, I mean, I, I do agree. And speaking of kind of that, not written for humans, yours is most definitely written for humans, and often, so much so that it sometimes is kind of quite out there, so to speak, and and.

• 19:04Speaker 02

  Yeah.

• 19:04Harry Stebbings?

  Treat, is, 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, "Ooh, is this too out there?"

• 19:20Speaker 02

  Yeah, I mean, we do, and the team sometimes will rein me in in particular. But I think, you know, what we don't wanna be is plain vanilla. We want you to either love us or hate. But we want you to have an opinion, right? And I think that's one of the things where in B two B especially, folks want to play it safe, right? And you know, 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 OK with that. Like, we have a certain personality as an organization at C B Insights. And you know, you're going to buy into the product, but you're also going to buy into that.

• 20:05Speaker 02

  And then again, like, the numbers don't lie, right? We crossed five hundred thousand six weeks ago. We're probably at five hundred twenty thousand now. You know, like, it just keeps growing. So the formula is sort of, if there is a formula, is working. But I think, you know, the key is that you're gonna have a viewpoint on us. And it maybe you may say it's not for me and I don't like it and I want to unsubscribe. And we're totally good with that.

• 20:26Harry Stebbings?

  I love that. A desire for an opinion either way. I do want to touch on the second element of that statement being that it doesn't need to be crap. So why does it not need to be bad? Now, there's some rules that you and C B very much live by as to how you think about kind of successfully crafting that content.

• 20:43Speaker 02

  Yeah, I mean, I kind of touched upon it a little bit before, right? I think there's a few things. One is highly visual, right? It's just the way the world is going, right? When you look at our social media, Instagram, et cetera, right? So highly visual is important. Our clients are people at large corporations. They want to make sense of things quickly. So one, I think that's that's one of the key things, right? I think irreverent is important, right? Like, you know, there's people doing really amazing things in our world. And so we try to highlight those. We do want to teach you something. But then there's also lots of banal, ridiculous, foolish things that go on too. And we want to kind of point those out. So I'd say that's kind of a second thing. And I'd say the third then would be. Kind of saying the things that we hear from our clients or when we're at a dinner event

• 21:28Speaker 02

  that people say about what's happening in the industry, but actually nobody wants to put out there. Because everybody's sort of talking about X thing, or we don't really get into people, but you know, X phenomenon, whatever that might be, and then we'll just try to name it, right? And I think it makes some people uncomfortable. And then a lot of people write back and they're saying like, oh shit, I didn't think anybody would actually say that and you guys just did. So I think like, we're sort of religious about telling the truth. You know, the example I can give you with corporates is we have a lot of enterprise clients who come to us and say, hey, should I start a corporate venture fund, right? And I think if we were purely not as focused on the truth, our answer would be every time, yes, you should, and hey, here's a subscription to CB Insights to accompany it.

• 22:09Speaker 02

  And I would say in three fourths of those cases, we tell them, no, we don't actually think it makes sense for you because of here's sort of our framework for thinking about it. But I think that irreverence and truth telling are sort of really important. So it doesn't, not everything that we write looks self-serving, right? Because I think that's a quick way to lose interest and lose your audience very quickly.

• 22:29Harry Stebbings?

  Oh, for sure. It comes across as kind of a neutral friend. I do want to discuss 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?

• 22:50Speaker 02

  Yeah, so, you know, and I can only speak 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 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 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.

• 23:33Speaker 02

  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? 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. And I think if somebody just from the outside looking in, you know, looked at, they'd say, oh, yeah, I have no idea why things are working there, but they seem to be. And, and you know, I think part of the reason for that is us just being very open to who we hire and sometimes by necessity, right? Like the most amazing engineer at Facebook when we were eight people wasn't going to come and join us, right? Like, why would they? And so we were really resourceful and really scrappy.

• 24:18Speaker 02

  And then I think we ended up finding people who were, you know, more outstanding than anybody we could have found at one of those pedigreed firms or from a pedigreed university.

• 24:26Harry Stebbings?

  No, absolutely. And I love that element of 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?

• 24:46Speaker 02

  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 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.

• 25:30Speaker 02

  And so getting them together more frequently and sometimes in for, you know, just activities that aren't just about work. I think it's 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.

• 25:52Speaker 02

  Sort of happened through by osmosis. And I think I haven't done as good a job at communicating to the team internally enough about our game plan, how things are going, our progress, what's going well, what's not going well. So I think that's another scaling challenge is just realizing even myself that we are a different company and how we communicate has to evolve, given we're, you know, in multiple offices and in a much larger team now.

• 26:16Harry Stebbings?

  Incredible to see that scaling to over two hundred, as you said there. I do have one final question before, my favorite being the quick fire, and that's on the interview process itself, always an interesting one. What's the one question that tells you most about a candidate, Anand?

• 26:29Speaker 02

  Yeah, so the question I like to open with is just tell me how you prepared for this conversation. A lot of doing well, you know, and again, at C V Insights is about being prepared, doing the work glamorous or not glamorous to make sure that you put yourself in the best position to be successful. And, you know, it's actually shocking how few people take time to prepare, as even in interviews, right? What you would think is a probably a pretty important thing, you know, and so it immediately tells me, you know, if somebody cares and it gives me a sense for like if they're going to do the work and their analytical capabilities and it's really helpful to see how somebody thinks through and responds to that question.

• 27:07Harry Stebbings?

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

• 27:11Speaker 02

  Yeah, so there's no, I, 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?

• 27:57Speaker 02

  Like, I think all of a sudden. Like it goes from it's not an interview, it becomes a conversation, 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 adding value. And that's incredibly good sign at the interview stage. If somebody's adding value that early.

• 28:18Harry Stebbings?

  Yeah, got it. Super encouraging to hear that kind of verticalisation at the interview stage. I would, though, and I'd love to move into the quickfire round. So I say a short statement and as you know, you give me your immediate thoughts. No, about sixty seconds or less. Are you ready?

• 28:32Speaker 02

  I am ready.

• 28:32Harry Stebbings?

  So it's been a while since I asked you this. Your favourite book and why?

• 28:36Speaker 02

  I think it actually remains the same. It's Influence, the Psychology of Persuasion. So it's a book that's helped me think about how to persuade people. Do marketing better, newsletter, et cetera. It's had like an amazing impact on how I've grown as a professional.

• 28:53Harry Stebbings?

  What would you most like to change about tech and Silicon Valley today?

• 28:57Speaker 02

  Um, the fascination with raising money and the idea that raising money is what makes you successful.

• 29:04Harry Stebbings?

  What would you have done differently had you have gone down the VC route, do you think? Do you ever think about it?

• 29:09Speaker 02

  I think it would be dead.

• 29:10Harry Stebbings?

  Really?

• 29:11Speaker 02

  Yeah, I think we would have tried to force ourselves into a market that was much smaller. And yeah, I think us not having the benefit of that cushion forces us to have lots of client conversations. And it still does. I mean, I've probably talked to forty customers in the last six weeks. I think we have, yeah, it just created clarity that I don't think we would have had to get if we raised money.

• 29:32Harry Stebbings?

  What motto or quote, Anand, do you most frequently revert back to?

• 29:36Speaker 02

  The harder I work, the luckier I get.

• 29:38Harry Stebbings?

  Yeah, I mean, I definitely experienced that one. What do you know now that you wish you'd known at the start of your CB Insights journey?

• 29:44Speaker 02

  I think the fact that the company, and I don't know the number, what number, but there's sort of these moments in the company where it's almost becomes a different company, right? In a good way, but it's just we've evolved and grown to a point where the things that worked at stage one are no longer going to work at stage two. And we try to get ahead of those things, but sometimes you don't know what you don't know. And, you know, if somebody had said, hey, this is when it's going to start to break down, like get ahead of it. That would have been very, very, very helpful. You know, it might be that there is no playbook there, but if there was, that would have been really valuable to know.

• 30:16Harry Stebbings?

  Penultimate question here, how do you deal with the shit hit the fan moments?

• 30:20Speaker 02

  Yeah, so as of late, you know, in the early days, we had lots of those, right? Because we couldn't, we were worried about, could we make payroll? We don't have those moments as much anymore, right? I think we have built a pretty resilient system. I will say, like, working hard and prioritizing and thinking about what you should focus on has been really good for us of late. You know, back in the day when it was, oh my God, I'm not sure we're going to make payroll. It was, okay, let's call as many people up as we can and see if we can scurry up some revenue. But I think thankfully, we don't have those moments anymore. They were fun back in the day, but I'm glad to not have them today.

• 30:56Harry Stebbings?

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

• 31:06Speaker 02

  Yeah, I mean, I think when we think of our clients, right? They're these large enterprises who are 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 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 a lot more successful, a lot more evidence-driven

• 31:51Speaker 02

  in how they drive their organizations forward.

• 31:53Harry Stebbings?

  And Anne, you know what a fan I am of you. You know what a fan I am of the incredible content that CB produces. So thank you so much for joining me today. And this really was so great to have you back on the show.

• 32:02Speaker 02

  Great, thanks, Harry. Likewise, I'm a big fan. I marvel at how much you've grown this franchise. It is, it's really, really impressive. I think a lot of the hard work, luckier you get, kind of mantra is very applicable to what I've seen you do. So kudos and congratulations on all the success.

• 32:21Harry Stebbings?

  I have to say, hearing that from Anand really does mean the world to me and I want to say huge thank you to him, he's been so supportive of me and I really do so appreciate that. And if you haven't signed up for the CB Insights newsletter yet, then that really is a must. You can find that at cbinsights.com. Likewise, you can find out more from Anand on Twitter @Asanwal. That again, really is a must and we'd love to welcome you behind the scenes here at the 20 Minute VC. You can do that on Instagram @HStebbings1996 with two Bs as you know. But before we leave you today. As a VC, making new investments and working with founders is your top priority. So instead of worrying about scaling your back office, you need a fund administration partner. Much like how Carter changed how private companies manage their cap tables and 409 evaluations, Carter are now doing the same for fund admin.

• 33:04Harry Stebbings?

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• 33:45Harry Stebbings?

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• 34:27Harry Stebbings?

  And you can check them out today at startengine.com/20vc to invest before the IPO. I cannot thank you enough for tuning in and I'm very excited to bring you another set of special episodes next week.