Every evening at around 6 p.m., over 300,000 people get a love letter in their inbox. After some charts, random news bits and some snark, it ends with an overfamiliar (and some might say downright creepy) sign off: “I Love You.”
That’s the trademark of Anand Sanwal, the 43-year-old CEO and co-founder of a B2B data company, CB Insights, and self-proclaimed introvert.
“The newsletter affords me the ability to be a little bit outlandish,” he said. “In person, I prefer to be anonymous. In the little geek circle we play in, it’s become tougher to be that way.”
Sanwal learned in the company’s early days not to overlook the person behind someone’s professional identity. The key for Sanwal was bringing personality into the work he did.
“When we thought of our clients as big organizations we sort of lost the people who work at those companies that are our clients,” Sanwal recalled. “People who aren’t thinking about their jobs all day long, who are interested in pop culture and other things.”
The newsletter used to be just graphs and data and no commentary. One evening, over dinner, Sanwal’s co-founder, Jonathan Sherry, made a suggestion: “Why don’t you write the way we chat in our internal chat rooms and let’s see how that goes.’”
Sanwal did, and the newsletter exploded. With the right tone, humor and a hint of irreverence, Sanwal and his team have made data fun and developed character that connects with its readership. The newsletters highlight terrible charts on the Internet, pick through troves of CB Insights data and data visualization and even include hate letters from readers.
Now, CBI gets some 40 percent of its data directly from companies pitching themselves for a newsletter mention.
“Just a few weeks ago the government of Israel gave us a bunch of data about augmented reality and virtual reality startups in Israel that’s not really publicly available anywhere else,” Sanwal offered as an example. “They just wanted us to create a market map for them of Israeli VR and AR companies. We have VCs, governments, startups all giving us their data in the hopes getting some exposure in the newsletter.”
The fintech show
CB Insights analyzes data on venture capital, startups, patents, partnerships and news mentions for many industries, making fintech an active space for its work in the last few years. It’s no secret that “Fintech” has been a big show — startups claiming they can replace banks, banks teasing innovation through press releases to avoid FOMO, and finally, the two coming together to do some real work. There’s a lot of secrecy and hype.
For the record, futurepreneur, intrapreneur, mentor capitalist and venture catalyst are made up titles that don’t mean anything. Thanks. pic.twitter.com/dZ5qGAOPXn
— Anand Sanwal (@asanwal) July 2, 2017
Is there data around this or just one of those Silicon Valley dogmas? If data, would love to see https://t.co/SCrn5g7Nqo
— Anand Sanwal (@asanwal) July 16, 2017
That was what made Sanwal want to build a business based on some data. It happens in every space being transformed by technology, which is where CBI plays.
“Just the sheer amount of bullshit that’s out there,” Sanwal said. “When you think about technology it’s basically a bunch of talking heads that say where things are going. The idea of using evidence and probability to attack and go after that pundit base of superficial knowledge and showing people there’s a better way to make decisions, based on data, is compelling.”
You could replace the word ICO with “equity crowdfunding” 2 years ago
That didn’t make much of a dent in startup funding landscape pic.twitter.com/AheshsqYYY
— Anand Sanwal (@asanwal) July 1, 2017
While there’s interesting innovation happening in financial services, banks are chasing certain technologies — blockchain and AI of course — without any real view of how they’re going to apply it to their businesses, Sanwal said. What they don’t talk about enough, it seems, are novel ways and the cost of acquiring customers.
Instead, they talk about back office efficiencies or how to engage an existing customer, he explained. They’re not as focused on acquiring new customers and are happy to let fintech companies be the front end of that experience, relegating themselves to being the dumb rails.
“Our customers tend to be the big incumbents. They’re extracting themselves out of the relationship with their customers,” he said. “They say ‘fintechs are running on our infrastructure so we’re still making money,’ but at the end of the day the customer’s relationship is still with some other app or customer. Thats a really precarious place for these institutions to be.”
Sanwal always dreamt of starting out on his own, but it took longer than he expected.
Before launching CBI, Sanwal spent a year at Kozmo.com, an internet delivery and logistics startup that eventually failed. From there, he went to AmEx, leading the chairman’s $50 million Innovation Fund, where he spent seven years. In 2008, he co-founded CB Insights, where he’s focused on destroying the “Pundit Industrial Complex,” and having a good time doing it.
“If I was doing insurance actuary tables I would not be having such a good time,” he said. “Today, I met with a CPG client — we were talking about which ingredients are going to be the big things in beverages. Last week I spoke to an aerospace and defense client about drones and surveillance and efforts overseas in combat areas.”
Sanwal and Sherry grew their team to 24 employees by 2014 and now has 150. It was bootstrapped for its first five years and grew to 65 people without raising money. Sanwal says it still hasn’t touched the $10 million it eventually raised but is growing at 100 percent year over year. Sanwal hopes to reach 200 next year, and spends just about half his day (about four hours everyday) trying to recruit awesome people and, in a way, maintaining its cultural credo, which is based on “helpful, humble, happy and hungry” people. Growth will be pretty evenly spread across engineering, marketing, product, sales, research and data as well as technology and engineering, he said.
“We have a pretty strong thing, which is that we won’t keep you if you’re a high performing asshole. We will fire people who are very good at their job but cancerous to the culture. The negative is we grow slower than we could.” (That’s true: Sanwal says CBI is behind on hiring for the year.)
Culture also determines who CBI shouldn’t keep at the company, and it’s something Sanwal says he ignored for a long time, thinking it was “propaganda that companies use to brainwash people.” When CBI began growing, cultivating a certain culture became unavoidable, he explained.
“When you’re 10 or 20 people sitting around a table everyone knows what’s going on and everyone feels the struggle. When you get bigger and more successful you realize not everyone knows what’s going on or how to behave. It became apparent we need an operating system for the company. That operating system ultimately is the culture.”