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June 11, 2024 • 1hr 17min
$100M Founder Reveals The Secret To Making Data Profitable
My First Million
In this episode, Anand Sanwal, the founder of CB Insights, joins Sam Parr and Shaan Puri to share his playbook for building a highly profitable data business. Anand discusses CB Insights' origins, starting with selling PDF reports on credit card industry trends to hedge funds, and emphasizes the importance of identifying the right customer, providing a clear edge, and ensuring feasible data collection.
$100M Founder Reveals The Secret To Making Data Profitable
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Key Takeaways
- Anand Sanwal, the founder of CB Insights, shares the playbook for building a highly profitable data business, emphasizing the importance of identifying the right customer, providing a clear edge, and ensuring feasible data collection.
- CB Insights started by selling PDF reports on credit card industry trends to hedge funds, leveraging Anand's network and Dominic's industry expertise to provide valuable insights.
- Anand stresses the need to focus on the customer's needs and the edge the data can provide, rather than just having data itself, which has little inherent value.
- Anand discusses several potential data business ideas, including a high-end "Glassdoor" for executive leadership, a C-suite headhunting service, and a home options business for future home sales.
- Anand is now focused on building a "School of Entrepreneuring" - a 6th-12th grade boarding school that aims to prepare students for entrepreneurship, in contrast to the traditional education system.
- Other business ideas explored include slime museums, autonomous convenience stores in apartment complexes, and addiction treatment centers for online addictions like gambling and gaming.
- Anand emphasizes the importance of learning from successful sports coaches on topics like motivation, team dynamics, and simplicity in training.
Introduction
In this episode, Anand Sanwal, the founder of CB Insights, joins Sam Parr and Shaan Puri to share his playbook for building a highly profitable data business. Anand discusses CB Insights' origins, starting with selling PDF reports on credit card industry trends to hedge funds, and emphasizes the importance of identifying the right customer, providing a clear edge, and ensuring feasible data collection.
Anand also shares several potential data business ideas, including a high-end "Glassdoor" for executive leadership, a C-suite headhunting service, and a home options business for future home sales. Additionally, he discusses his focus on building a "School of Entrepreneuring" - a 6th-12th grade boarding school that aims to prepare students for entrepreneurship, in contrast to the traditional education system.
Topics Discussed
CB Insights' Origin Story (1:30)
- Anand left American Express in 2008 to start a consulting business, but the financial crisis hit, and his main customers went "ghost".
- Anand and his team started calling former colleagues in the credit card industry to do a "sentiment survey" on delinquencies and loss rates, which they would provide for free.
- They met a prime broker who saw the potential in selling this data to hedge funds, and Anand spammed every Wharton-educated hedge fund manager he could find.
- They initially sold the PDF reports for $2,500 per quarter, but the prime broker convinced them to price it at $12,000, $50,000, and $100,000 tiers, with the higher tiers including additional services.
- This "build once, sell multiple times" model allowed them to put away enough money to fund the creation of CB Insights.
Advice for Aspiring Data Entrepreneurs (12:03)
- Anand warns against the common misconception that data itself has inherent value - the key is identifying the edge it can provide for the customer.
- He emphasizes the importance of considering the customer, the edge the data can provide, and the feasibility of collecting the data as the three key criteria for a successful data business.
- Anand cautions against relying on a "hack" for data collection, as it can make the business vulnerable if that access is lost.
Potential Data Business Ideas (19:24)
- High-end "Glassdoor" for executive leadership: Conducting in-depth interviews with current and former executives to provide insights on a CEO's leadership and followership.
- C-suite headhunting service: Leveraging data on executive vesting cycles and willingness to switch jobs to provide a recruiting edge.
- Home options business: Paying homeowners upfront for the right to sell their home in the future, then bundling and reselling those options to brokers.
The "School of Entrepreneuring" (32:17)
- Anand is focused on building a 6th-12th grade boarding school that prepares students for entrepreneurship, in contrast to the traditional education system.
- The school will have a competency-based, project-based curriculum focused on critical thinking, public speaking, and hands-on experience running businesses.
- Anand believes the current education system is focused on compliance and conformity, and he wants to create a school that fosters exploration, curiosity, and entrepreneurial mindsets.
Other Business Ideas (42:47)
- Slime museums: Experiential, interactive museums focused on slime and other sensory experiences for children, with high-margin upsells and potential for expansion.
- Autonomous convenience stores in apartment complexes: Unstaffed, Amazon Go-style convenience stores placed in multi-family housing communities.
- Online addiction treatment centers: Providing services and support for addictions to online gambling, gaming, and other digital compulsions.
Lessons from Sports Coaches (58:51)
- Anand has been studying successful sports coaches to understand their approaches to motivation, team dynamics, and simplicity in training.
- He believes there are valuable lessons from the sports world that can be applied to education and business, such as focusing on what the individual cares about and creating a sense of accountability and responsibility.
Conclusion
In this episode, Anand Sanwal shares his extensive experience and insights on building a successful data business. He emphasizes the importance of identifying the right customer, providing a clear edge, and ensuring feasible data collection, rather than simply having access to data. Anand also discusses several potential data business ideas, including a high-end "Glassdoor" for executive leadership and a home options business.
Additionally, Anand reveals his focus on building a "School of Entrepreneuring" - a 6th-12th grade boarding school that aims to prepare students for entrepreneurship, in contrast to the traditional education system. He believes the current education system is focused on compliance and conformity, and he wants to create a school that fosters exploration, curiosity, and entrepreneurial mindsets.
Throughout the conversation, Anand also shares his fascination with lessons from successful sports coaches, particularly their approaches to motivation, team dynamics, and simplicity in training. He believes these insights can be valuable in the realms of education and business.
Overall, this episode provides a comprehensive look at Anand's data business expertise, his innovative ideas for the future, and his broader vision for transforming education to better prepare students for entrepreneurial success.