Jager McConnell - CEO of Crunchbase | Innovation and Adaptability at Crunchbase

Welcome to success story, the most useful podcast in the world. I'm your host, Scott Clary. The success story podcast is part of the HubSpot podcast network, which has other amazing podcasts like Entrepreneurs on Fire hosted by John Lee Dumas. Entrepreneurs on Fire, Stokes Inspiration and Share strategies to fire up your entrepreneurial journey and create the life you've always dreamed of. Check out some of the recent episodes, eight tools of improv comedy that you can use in work and life, how to turn your Instagram into a money making machine, how to build a seven-figure side hustle without quitting your full-time day job and overcoming the beast of depression as an entrepreneurial leader. If these topics are interesting for you, you definitely have to check out Entrepreneurs on Fire wherever you download your podcast. Today, my guest is Jagger McConnell, CEO of CrunchBase. CrunchBase is a prospecting platform powered by best-in-class proprietary data. Jagger joined CrunchBase in 2015 following the company's venture backspin out from AOL Verizon. Prior to joining CrunchBase, Jagger spent 11 years in various roles across sales, marketing and product development at Salesforce, ending his time at the company overseeing the core Salesforce automation product line as VP of product in the sales cloud. We spoke about Jagger's career and lessons learned from early stage startups who work that. CrunchBase's business model, including its marketplace data and machine learning capabilities, fundraising, growing at all costs, data, and a severe lack of investment in underrepresented classes. Yeah, there's a lot of good answers that I have for that. I wasn't sure when I was a kid if I wanted to do film or if I wanted to do tech. I was a nerd. I loved video games. I loved being in front of a computer more than probably interacting with humans. So I loved that aspect of it, but I didn't quite know what my path would be. I just knew I loved tech and was involved with tech. And then I was very into film. I wanted to make film. I wanted to write films. I had this whole passion around art. And so I tried to ride that train as long as I possibly could where I was no non-committal all the way to college. So I went to Carnegie Mellon University. And the reason I picked it was they had a strong arts program and a strong engineering program. So I was still punting on the decision. But it was actually nothing to do with school that pushed me down the right path. When it came time for summer and I had to go have a summer job, there wasn't anything for film. But there was plenty for tech. So I did a little gig at Bayer Corporation. The people that make aspirin, they've got a whole crazy chemical division and somehow got an internship there. That got me doing computer stuff. Came up with a business idea and off to the races in tech and haven't looked back. And even to this day, I think about retirement. And I'm like, well, when I retire, that's when I make the films. Now I go back and do the art. Hopefully I can sell fun my film career in the future. Do you think you ever, do you think you ever would, do you think that? Well, actually, I'll ask you if you think you ever would, but do you think that creativity helped your career, like that love for creativity and art? One million percent. The only skills I have in life are looking at problems and coming up with creative solutions to those problems. That's the only thing I can do. So that has translated into a pretty exciting tech career because a lot of it's so programmatic a lot of times. So where people don't look at the pieces and say, oh, there's another way of doing this. There's an interesting aspect to this that I hadn't thought of. And that's my sweet spot where people say, these are the pieces that we have. What can we do with them? That's my strength. And I think that comes right back to, I've got this film idea. And how do I go and build a plot? And something that was interesting for the whole thing, they're definitely intertwined. And I guess that's it. Now you're starting to problem solve and start ups. After after Bayer, you started to get involved in some startups and walk me through some of that experience. Obviously, I don't know any of the names of those startups, so it wasn't like that positive, but yeah, I mean, they were very small. And probably like the most notable, there was a company called beta sphere, not around anymore. And it was beta testing software and services. So if you were like Cisco and you wanted to go and test a new router, we would find for you the beta testers to try it out and then give you feedback. So it was like this very early like lean startup maybe approach to building products and like getting feedback early into your product development cycle. So it's not a terrible idea. And I started off there as like a project manager. It was pretty small. And I was excited because that brought me to Silicon Valley. So I was like, this is back in 2000. So I probably none of your listeners were alive yet. But back in 2000, there was a tech community there. And it was an exciting time to be a part of it. And it was right at the end of a big bubble. And it's actually a lot of people compare the current bubble crashing thing that's happening right now to 2000 when there was a big crash as well. We're like net scape had trouble pets.com when our business like all these things started happening. And for for me at the time, I was so scared of losing the job where I just worked to my ass off. There was no way I was going to get laid off with the crashing that was happening. So I just worked insane hours nonstop and always was looking for how can I add more value into this company and how can I tie myself to revenue as far as as fast as I could. So when I joined it was about, I don't know, 15 people. It went up to about 200, 250 people over about six months. So that was an amazing experience. We went into a gigantic new office and was like, wow, this is, I picked the right horse. And then like six months later, layoff started happening. And over the next four years, I still stay at this company, it was seven rounds of layoffs. I saw the company go from 250 people all the way back down to 15 people. And it was very big. And it was flattering because I didn't get laid off. So that was nice. So I did a good job of adding value and convincing people as valuable. But what also was helpful for my career was I saw an opportunity to pick up every single responsibly that I got dropped as people left. So I took over the sales engineering team because I, I know the product, I can do this. I started having more and more impact on product on engineering. So by the end, I was a pretty critical player in that company. And that helped accelerate my career even further because I wasn't afraid to just take on whatever responsibility could no matter what the topic was. I didn't fit my job description. I didn't care. I just wanted to not get fired. And that's, and that's, that was a pretty important part of my career. That's, that, that is an eye opening experience. So everything you just discussed is, is what I actually try and highlight to people that want to go work in startups. Like what you just described to most people would be absolute hell. So I think that there is, I mean, like, let's, let's be real. It's not, you just said we went through seven rounds of layoffs. Now I was picking up basically a responsibility as I went. And that is actually what accelerated your knowledge, your learning, your ability to operate, it's such a high capacity and sales force and in crunch base. And like literally everything that you've done, do you think that there's a major, a major wake up call when people start to work in startups that they have to be aware of what the reality and what is that reality when you're working in a startup? Yeah, I mean, for, for sure, it's don't worry what your job description is. You're there to succeed as a team, right? And just get shit done. And there's no, like, it drives me crazy because I hear it more and more in, uh, sort of today's generation, where it's like, well, this is, this is, this is my job, job description here. Oh, you want me to do more than my job description? Well, you'll need to pay me a little bit more, um, for the added responsibility. Like back in those days, that was not the case. It was, I want to keep my job. I'll do, I want us to succeed. I'm going to do whatever I can to make that happen. Um, and I think that's rewarded. And, and ultimately, like the learning that you have is worth, doesn't, maybe we want to end the incremental salary increase. I could maybe negotiate it. Um, and that's ultimately what got me the job at Salesforce, which unlocked, um, all the doors. I got me to where I am today. What was the bigger, what was the bigger, um, uh, I guess growth in your life? Was it at Salesforce or was it at CrunchBase? Where you went from X revenue and X size to, to X revenue X size? Compared to CrunchBase, that's, yeah, that's a toughy. Um, I've learned a lot. I, from life impact, I've got it, probably give it to Salesforce. Um, and, and the reason is is, you know, I walked in the door there as a sales engineer. Like I, it was kind of the, the, on the low run of the sales spectrum, um, sort of like skilled and respected. Um, but there wasn't a lot of growth path. You can make a sales engineer manager, maybe a director, maybe a VP someday, but that path wasn't super exciting to me. Um, but the fact that I was able to move around the organization and find myself as head of product of the core Salesforce, um, CRM, core Salesforce product after those years, like that, that was transformative to my career. Um, and that let me get the job at CrunchBase. So everything I've learned from CrunchBase has been transformative for me as a person. I've certainly learned way more than I knew before I started. Um, but the impact of actually, um, like what I learned at Salesforce got me to where I am, uh, without question. And I, I was actually curious like at what point you, like, because I have to just sort of timestamp the date and the time when you joined Salesforce. I'm trying to figure out where they were at, because they weren't public at the time that they were, they, they had just gone public. It was 2004. Um, I joined it was like 80-ish million in revenue, which is so crazy to think how small that was and that they were going public at this size. I was really, it was really early. Uh, I actually didn't even think about that. That is small for people. Yeah. That's really small. It was really small. And it was just, I mean, we're 400-ish people. Like it was, it was a small company back then. Um, but the phone, I mean, but, but you knew it was a rocket ship from day one, even though like SaaS and software in the cloud was not certain, you know, like there's a lot of, um, like, even when I first started, like my first week at boot camp, uh, so learning all the injured intricate details, details of Salesforce, um, it went down and it was down for like days. I was like, oh, I have made a horrible mistake. I should have gone work at Oracle or something. This is not a good idea. Um, so, so like it was that, and it was that risky back then. Um, and, and it was a, it was a very uncertain model. Um, but the, the growth trajectory, like, like, as a sales engineer, I had demos from six a.m. to six p.m. every single day. The phone was ringing up the hook. There was just a backlog of demand of this thing and people curious about what it was and if it would work for them. Uh, and that was, that was a fun time to be there. And that's why if I go in public with obviously the right thing in hindsight, but, uh, it was, it was, I've never, I've never been a part of a company growing that insanely fast. So then, okay, so then the follow question is you, you, you encountered what it was like with the, the Salesforce, the Salesforce growth trajectory, you encountered what that feeling was like, the experiences like it was transformative in your life and your career. Um, what are you doing at crunch base now to build an organization like that so that not just obviously for the, the stakeholders, but investors, but also the, the people that work for you, it's going to be the one that they speak about when they go off and become CEO of the, the next incredible company. They're going to say this was a point of my career when everything changed for me, the growth, the learning, the education, everything. Yeah, I mean, crunch base is an interesting thing. It's been around for a long, long, long time. Um, and the people think of it as a certain thing. Um, and we'll, I'm sure it's like me more about that later, but they, they think of it as this, this, this sort of place I go to look up companies. You know, that's, that's how, how, most people think about, um, this gets back to one of my strengths when the opportunity to spin it out presented itself for me. It was really obvious what this thing could be and it's not intuitive. The, the, for me, what I'm leaving Salesforce, the CRM system built on top of an empty database, right? Incredible software. No value on day one. There's no value. You've got to put all this data into it to, to get a value out of it. And the value is all around time savings and efficiency at the end of the day. Um, I saw an opportunity there. I was like, well, what if it wasn't built on top of empty database? What if it was actually built on top of something that had very, very valuable data that you didn't as an organization know, wouldn't that make it 10 times more valuable? Um, so the, when I heard about crunch base spinning out, I was like, well, you know, what if we built a prospecting? What do you mean by that? What do you mean by that? Spinning out like when? Oh, yeah. So it was part of, so, so before my days, like, it was a project at TechCrunch. And it was a, this project where they would just track which companies are writing stories about and then people could, even internally, they would figure out which writers were writing stories about which companies, so there was a lot of duplication. So as a central database, eventually they made a public and then people could submit their own companies into crunch base so that they might get rid of about by TechCrunch. It was really like a lead source for TechCrunch. And initially, no revenue, not a lot of users, not a lot of companies, like only like 10,000 or so companies. Um, over time, um, that slowly started to get bigger and bigger and bigger. Um, no revenue. Um, America online, remember them when it built or bought TechCrunch and they valued crunch base at zero dollars and said, okay, we'll take it and we'll, we'll, something we'll turn into it. Um, they invested to try to make it into like an ad, like they knew ads, right? So let's make more people see it. More eyeballs will sell ads and maybe we'll make money that way. Um, so it grew to, you know, 20, 25 people. Um, and, uh, that's when there was at least a lot data growth and there was a lot of like, like trying to push on the data quality. Um, but they still didn't really have a real revenue model. The advertising was only making at the end like a million dollars a year. And, you know, if you had 20 people, that's not going to cut. You know, so you're, you're burning at these in my money. So Verizon came in by America online. Um, and they're like, we're, what are we doing with this crunch base thing? Like what, like, it doesn't add value for us. We don't know what to do with it. We should spin it out. So eventually, AOL slash Verizon wanted to spin it out as an independent company, hoping that it might first be a reduction of expenses on their, on their, on their P&L, but also, uh, maybe becomes something bigger, um, being separate from, from the, this, this beast. So, uh, that's when I joined, so I joined, um, about a month or so before the spin out. Um, and so on the day of the spin out, it was at tech crunches, dropped. We announced that now countries was independent. And we're not going to go and do something entirely different, um, which is, and that's all you. That's all me. That's, no, no, no, or, well, a million dollars of revenue you have, you have a burn rate. It's never been proven out before. It's never been successful before. And like, yeah, jagger, like, go get it. Go get it. Uh, so, and, and so for me, I like, I knew I wasn't going to be building a website to sell ads. So, so one of my first missions was how do we turn off that ad revenue as fast as we possibly could have moved to a subscription model, where we're selling software on top of this thing. Um, and that's, so that's why I meant by spin out. And it's to build this, this kind of, my hope is this revolutionary, um, CRM system. That's this prospect for it. So a CRM system that brings revenue to you rather than you importing in what you're tracking and working with it. So that's what we're, what we've been building. That's what we're, where we continue to build. And that's getting back to your original question. It's that vision that gets people excited internally at crunch base, where if, you know, if I was just like, yeah, you know, we're going to build the biggest database of companies in the world. And it's this, but bigger, you know, like it's, it's just not, it's just not that exciting. But if you say, look, we're going to induce it, no one else can do because no one else has what we have. And we're going to play that strength, build software that hopefully has a ton of value and leverage this channel that we have of 80 now, million people using crunch base to go and sell them this tool that should make their lives better and easier and make the world a better place. But that vision gets people fired up to work at crunch base. So then, okay, so then how did you, okay, so let's talk about the strategy used to actually build that model out. So day one, what, so you're like, okay, so we have access all this data. Yeah. People want access to this data. We're going to sell them a subscription to access this data. That makes sense. You're building, are you building a marketplace or do you have so much data already that you actually don't have to worry about the, the data side of it? You have to get, because I know there's a whole bunch of components, right? Like you as a user looking for data, I subscribe, there's a monthly recurring, but also I'm assuming at the beginning, you probably didn't have every company properly filling all the information about them, so the data wasn't 100% complete. And I know like, now it's probably advanced, it's probably some sort of black box machine learning AI algorithm that figures it all out, but that wasn't day one. So how did you first start building it out? Yeah, so it's a great question. So when we, when we first spun out, the data was not that great. It was almost entirely user-generated data, which now today it's less than 10%. So so there was, we've over time made a big shift, but we didn't have time to fix the data. We only had about a year of runway when we spun out, and so a year of runway to change our business model, change the team, go and build the software that I think people might buy, sell the software to show traction and raise a series B before rav money. So it was, it was a pretty stressful year. And it was, it was hard because you know, there was, there was only so much we could do with the skills that we had and the bandwidth that we had. So the first step was let's build the thing that just to see if that anyone who has had this free tool would be willing to pay money for something else. So we built essentially a prospecting search tool. Basically, you let you do it very complex advanced searches of the data, which didn't exist before as more of a lookup tool. I hear it before as I know a company I'm going to look it up. Now it's, I have a certain type of company in mind, which companies match that description, and then if there's new companies that match that description, let me know like now there's monetary. So it's, it's give me a news alert, give me a funding alert, give me a new addition, new company that didn't match this criteria before, let me know immediately. And that's what we launched almost exactly a year after we spun out was Country's Pro. Now we're, and then we're charging for nine bucks a month. And it was like, okay, well, is this going to work? Because now we put it out there, again, now it's head crisis erupt. And if no one bought it, we were out business and like two months, like like maximum. So likely people did buy it and we were able to raise a series B from Mayfield shortly after. And okay, so as you're, so how did you get your first, say, 50 customers on that first 100 first 100 customers, it was just through like you leverage media, I'm assuming, because you had tech crunch, tech crunch disrupt. So obviously you do have a little bit of reach there, but was there anything innovative, any marketing strategies, anything that you did that was a little bit different to actually acquire users? Well, this is this is the sort of secret strength of crunch basis. We already had 20 million people coming to our website, right? So they are already coming. All we really have to do is market to the people that are already coming to site. And this will always be our strength. Again, I mentioned earlier, 80 million people using crunch space. Can we go and sell them something? Is, is, is, so we don't have to, our marketing budget relative to other companies are sizes quite small. Because we're just trying to leverage our strength, which is people coming to the site. And now it's like, well, who are the people we should sell to? Who shouldn't we sell to? Are we trying to sell them the big thing, the little thing, the media size thing, all that sort of funnel while trying to impact the user experience as little as possible so that the people that are getting value for free continue to get value for free. We don't want them to go away. We just want to with a rate of evolve into a little bit further in their career or a little bit further in their prospecting, they pay us money. And then all we do is put up a toaster on our website saying, hey, check out crunch space pro. Here's a video and show you what it does. And again, with, by the time we, so we turned a back stage at TechCrunch Disrupt, I'm about to go on stage to announce this new product. We had already sold licenses. But in the time that we turned it on, five minutes before I walk on stage, just because people were so eager to buy it from us. So it was, it was rewarding, because when I went on stage, I was already duplicated because at least someone had bought it and it wasn't my mom, you know. No, that's amazing. And well, I mean, there's a lesson in that ended up itself. I mean, if you, like every company, I believe, should be a media company. Like, technically, you leverage the 20 million people that were already coming to your site. You didn't have to, you didn't have to find a new audience, a target or a new, you know, a new user-based target, which is very important. So, I mean, that's, that is a lesson for startups. Obviously, they don't have 20 million people hitting their site every day. They had to figure some way to monetize. But ultimately, if you become a media company, if you build masses, you can find a way to sell into that audience too, which is something that you, you did day one. But the other thing that you probably wanted to optimize is the data. So I'm curious when you first launched that product, was the data valuable enough for people to pay for it? Did you find out which data people would actually fork off some cash for and what was not acceptable? Yeah, it was, it was, it was a scary learning for me. Because when it's a lookup tool, you look up a company, if you've heard of it, the data is probably pretty good because it's probably a pretty well-known company. But when you have a discovery tool, and now people are profiting for companies, just based on a set of criteria, it shows all of the bad data. So for instance, you could say, show me all the companies made before 1900. And it's like, okay. And then you see like, we have companies from like negative 32 BC. So what is that? I don't even know what a negative nut year is. And obviously it's not right. So we had a huge cleanup project where we, like, just had to do all the stuff that we thought people might do to sort of figure out what data might be exposed as horrible. And that, and for me, that flipped a switch on, we have to invest more on our data, once we get funding to go and change how we get data. So can't be user-generated because you get squirrely things from people doing weird stuff, like giving themselves a $100 billion funding round. It's like, okay, we need to go and put some controls on this, which is now what we've done. So you asked a question earlier about marketplaces. That was actually the next thing we did. After Pro, well, we re-platformed the entire data set and the entire website, the entire application, because we had inherited this thing that was pretty terrible. So we had to rebuild the whole thing from scratch, now that we have proven this prototype that worked and we were able to sell. The next thing we did after that then was marketplace, which allows us to go and integrate all a source of data sources into what CrunchBase is. So I can talk for hours about how we get our data and how data works. But the net net is we expanded the data from not just user data, but we also formed thousands of partnerships to go and get data in from governments, et cetera, VCs, data providers, all that is flowing now into CrunchBase to make a unified profile. Okay, yeah, I was going to say there's a couple of ways that we could take this because I want to, yeah, she has some great startup lessons, but then I'm trying to, like, bridge startup lessons plus the conversation about data because I saw one of your previous, so I mean, like it all sort of combines. I mean, you've built this incredible platform. We're talking about data. I'm curious about, and maybe I'll just let you speak about all these different topics. So like data security, what people feel comfortable aggregating, especially if it's not user-generated, GDPR, Castle, all the different data compliance items that you have to be careful of and cognizant of. What else? Also, the fact that you use all these different partners. So I would say let's talk about all the different data things that I'm sure you've dealt with. And then also all the different strategies you use to not just collect data, but I know you also use partners to build out the organization because you've used all these different, you have like, I don't even know if this is a case still, but at one point you didn't have your own QA team. You had a partner for QA. So not only do you have all these partners for data collection, you like, you built a business with partners so that you don't have to deal with a lot of those internal classes. Another interesting strategy. But first, let's talk about data that we can go into like sort of business growth strategy. So talk about data. All things data. That sounds good. So let's start with just how we get data. So today, we still have a great million user plus community of people who just put in data into CrunchBase. Why? Because they want to be well represented on a platform. If your company is wrong on CrunchBase, investors are going to miss you, not going to pay attention to you. Job seekers are going to think that you're dead in the water or you're not growing or not because they thought you'd be all those things require you to update your CrunchBase profile because our brand matters in the ecosystem. Just like you keep your LinkedIn profile up to date, it doesn't matter which other profiles are out there about you. LinkedIn, you keep up to date because that's the one that matters for you as a person. CrunchBase is the parallel for a company profile. So that's one aspect. Then we've got, as I mentioned, about 4,000 partnerships with governments, accelerators, VCs all over the world who give us that data. Why? Because these companies, these governments, these VCs want to be well represented on a platform again. They want to look like tech hubs. They want to look like they're matter that they matter and that are active. So they give us data directly. We have about 60 data providers that go and stream data into CrunchBase. That's massive amounts of data. You think about G2 crowd. They've got all those data on products. Those are tight to company. So we're able to go and absorb that into CrunchBase. So you have this one stop shop that has all these different data facets coming together. And there's no way we as a company could go and get like as our core competency to go and like generate all that data. There's entire companies that do that. Let's just absorb that data into CrunchBase. And again, we're going to do it for us because of our brand and they want to be well represented. Some of our partners you've never even heard of. Like a lot of people haven't heard of Bombora. They give us intent data. That data comes to flows in the CrunchBase so you can merge it with other data sets. So that is another aspect of what we are. So no one in the world has ever combined all these data sets into one unified profile before. And now you're able to do prospecting against all these different flavors of data all at the same time. And that's very, very powerful. So that's three. The fourth way is our machine learning or our AI systems. So that is a combination of crawling legal sources of data for us to go and get data from. But and that's a sort of table stakes. But some of the secret sauce is we also generate a lot of our own data based on what we see from all these other data sets. So any group from our own usage, right? So if everyone's flowing to a company profile page to go and check it out, that's probably an important page right now for whatever reason. That helps to drive our trend scores and our growth scores and our sort of recommendation engines. All these things are looking at which data has impacted funding rounds. Are there more news stories? Are there people tweeting about this company a lot right now? All those things drive into does this company matter or not? And that helps figure out which companies we should prioritize. So that's the fourth way. And then the fifth way is we have a team of about 20-ish people who work for Crunchbase and they manage a team of about 250 people overseas that go and do manual cleanup of data. Those automation, the AI systems flag things that I can't figure out. Is this spam? Is this bad? Is this good? It kicks it over to the humans to go and add a human brain on top of it to go and clarify. So we spent like 20 million dollars a year just making the data as good as it can possibly be and of course expand it. All that's a combination of five things. What's beautiful about that is no competitor out there can do what we do. I don't care who it is. There's no one who has all five of those things and can get themselves to a place where they can compete. A lot of people are like, oh, I'll just crawl and I'll be Crunchbase. Yeah, good luck. I did a horrible thing. I asked like a compounded question. So there was like 10 other things that I asked but I don't want to let you go on because I actually want to just pause you here and just go down on one thing you mentioned. And then we can keep going. So the one thing that I realized is that you became, you've mentioned this a few times, the source that people want to represent themselves on. Now that's incredible because if you even look at what you said, you get data from G2 and I don't know all the different sources you get data from but G2 could even be considered a competitor but technically not because they're feeding data into you. So how in the world did you become the person that everybody wants to be represented on? Because that is magic. Whoever you managed to do that, that's incredible. That market position that you're in. I think it really comes down to like G2, it's definitely a partner not a competitor in our minds as an example. You know what I mean though? Because they also represent companies, right? Totally. But you would never go to G2 to like figure out if they've got funding. Or if they what their website traffic is. Like you never, you would never think to go there. You say, oh, well, I'll go to a similar web or Alexa for website traffic data. But no one had combined it altogether into one place. And that was based on our roots. That was very easy for us to do because when the use case for at the very beginning of CrunchFace was what the hell does this company do? I have no idea. I'm going to go look at that by CrunchFace. I'm going on a date with someone. They work at fiddlesticks.com. Like what the hell is fiddlesticks.com to do? You Google it and CrunchFace comes up and then you go and look at it. That base level that what I like to call the master record of a company was already what CrunchFace was. We didn't have all the companies. But for the companies that we did have, we were the master record of companies. And then with that framing, then we can go and take all these different facets of data like G2 products and plug it in. And G2 gets excited because we're going to give we give it brand recognition as G2's data. Here it is. Click here if you want more data from G2 cross. So they see as a lead source. Happy to do that because they're providing value to us. No, I love that. But you didn't answer my question. How did you become? I guess because it was a master record. Like you were the master record. And I guess my point is I won't name competitors. But how come you were able to assume that position versus all the other competitors that are out there? And I don't even know who you actually consider a competitor. And I don't know who you partner with. So I don't want to miss. Yeah, you're good. The few things. One is we've been around for a really long time. So our SEO and backlinks and all the stuff you look for for that drives how people do a Google search and you show up as the first thing. Ours are off the map. Like every competitor, no one has like the 52 million backlinks. We have the crunch base. You know, and that's just from being around for a long time and being that master source of data where it's a standard we have talking about companies. Like here's the link if you want to go figure it out. That all those backlinks drove a lot of our SEO strength and that took, you know, 14 years to go and do. That's fair. And that's hard for any competitor to even come close on. You know, and the big ones, you know, again, I'm probably less afraid to talk about competitors, you know, like a zoom info. Like let's just want to take a second and thank the sponsor of today's episode HubSpot. So I was thinking about the shortest day of the year earlier. Well, technically, we have the same amount of time as every other day. The lack of daylight makes it feel so much shorter, which is kind of the same feeling as working with disconnected tools. Our workday is the same length as always. But before we know what we spent three hours manually fixing something that is quote, unquote automated. Thankfully, HubSpot's all in one connected CRM platform serves as a single source of truth for managing customer relationships across marketing, sales, service and operations, meaning all of your team's data is truly connected with multiple hubs, over a thousand integrations and an easy to use interface. HubSpot helps you spend less time managing your software and more time connecting with your customer. Plus with a quick and easy onboarding process, your teams can get started quicker than even the shortest day of the year. Learn how HubSpot can help your business grow better at HubSpot.com. That's the first one I thought of, yeah. Yeah, that's natural. That's natural. Who gives a shit? What ZoomInfo has on my company? In fact, I want them to have the data wrong in ZoomInfo so that no one finds me. I want them to have the wrong data and I don't even know how I could update the data if I did care enough to update the data in ZoomInfo. It's a very close system and that means that the data is not very good. I love going in and it's one of my favorite things to do is go and show people ZoomInfo and let's look up a company together and let's look at the data. The reason it's off is because they can't, they don't have those five things. They don't have the partnerships. They don't have the users updating the data. All those things lead to shitty data, ultimately. How good your tool is, your data is your credentials? Okay, so that's a great point. It's almost like because you've opened it up to the users, you do have the five pieces but opening it up to the users and having that user input and almost it's not a social community but it's like pressing up against like a social environment for B2B and company data. People are representing themselves in a way that I'm updating myself. I want to put stuff out into the world. I want to show up in a certain light on CrunchBase. It is a little bit of a social community not to the same extent but you are including the user as part of that experience. It's a two-side marketplace, right? We've got entrepreneurs and investors trying to find each other. We've got prospects and salespeople. We've got BD people in partnership, like pending partnerships. All those people are coming to CrunchBase to find one another and we have ideas even how to streamline that and help people connect further. So you're right that there's an opportunity there to go even deeper and just no one does on any other platform and that's secret sauce. That's why LinkedIn won, right? That's why LinkedIn won around resumes. We see an opportunity for that. We're indeed over. Is it pretty over everything? And then the other piece that I was curious about just because you deal with it at scale is the headaches with all the data compliance. So what does that mean for you as an organization? How do you make sure that you stay protected against all the stuff that could hurt you with GDP? Yeah, that's a great question. I think and I'm a big advocate of privacy and I think privacy laws didn't get much tougher in the future, not this isn't the end. And that's a good thing for us because we're company first. So what CrunchBase is all about is company information. That's our primary record. Yes, we do have contact information. Yes, there are individuals data in there. But for us, that secondary data, whereas when you look at our competitors, it's often the contact data is their first record. That's the most important record for them is do I have the person in their contact information? So in my perfect scenario, I want privacy law to make it so that no company can ever trade in contact information because it will shut that record better that we have. And what will be left is only company information. Which company is the ones I should prospect into? That's not protected and that will never be protected by privacy law because it's not a person. So that means that's our strength. We are an account-based first of account-based selling, account-based prospecting platform that as a bonus happens to have some contact information as well for you. And I think that's a huge difference for us. And it protects us from GDPR. It protects us from all these other places. We of course comply with all these privacy laws. And I even talk to people that work like write GDPR and give them advice on how to get even more restrictive because I think it's only in our all best interest to shut that shit down. So that people stop trading with our private data. But yeah, I've got a whole team thinking about it. The law is constantly changing. It's hard as a startup to keep up with that stuff, honestly. And we're pretty well-resourced. But it's a dynamic field that will only get more strict. So when you're building a product, be sure that you're thinking well in advance of not just what the law is today. But just don't get flat-footed because I think all these contact providers are dead. Like they just don't know yet. I mean, I don't disagree with you because when you look up information on that platform and you even run campaigns against, you run campaigns with any of the data, I mean, I don't feel like, especially in Canada, I'm Canadian. So I mean, Castle, like there's no way that any of that complies with Castle. And you know, you do your best job to make sure that there's unsubscribe. And he was actually fairly forgiving for cold outreach. But in Europe and Canada, it's virtually impossible. They have a lot of Canadian contacts. They have a lot of European contacts. They have a lot of Californian contacts. So you wonder, right? How it's going to evolve in the future if your entire business model is based off that. But anyway, that's not your problem. It could be, but it is self that we need to make that easy as possible for people to remove themselves from the platform if they don't want to be a part of it. But obviously, privacy is number one, security is number two on these two pieces, because it's so important to our business. I want to talk about some of the startup lessons. So I just alluded to this, but how you how you partnered out a lot of your startups. So with stuff, a lot of your startup, a lot of crunch bases, growth and whatnot. I'm speaking to you like a founder. I mean, you've been there since day one, but you get it. So you've partnered out a lot of the pieces. Why did you choose to partner out? So if we go through the lifecycle of crunch base, you proved out a business model. You proved out some product market fit. You found your customers. You raised your series B. Why did you choose to build a business model around partnerships and talk to us about what you partnered out and what you kept in house? Yeah, I mean, it's one of these things where I think a lot of people do that already, but if or not, they should, you know, when we spun out and we only had 20 people, what I didn't want those people to do is building things that were there off the shelf solutions for. I want them to focus on the things that were completely different for us. If you think about, we were running a website that had 20 million people come to the crunch base, that alone takes about 20 people. Like how do you go and build more on top of that? So as an example, like I wouldn't want people to go and build on boarding a software, right? There was a debate at the beginning. What do we, what do we do about that? Do we go and buy something or do we build the little toaster? Like here, click here to begin. Pendo didn't exist back then. That's what we use today. So that's still a thing that we have outsourced essentially to Pendo before that it was going to be called Walk Me. So these companies were that helped us, right? That saved weeks if not months of development time. So we didn't have to build the onboarding experience. We could just have a product manager build it from scratch or using their templates. Other tools like, obviously, analytics, you know, like, you don't want to have people going and building that stuff, you use analytics tools that we use something called Grow, which they may have kind of acquired, but it was a tool called Grow that helped us do analytics. So I didn't have, like I was doing the analytics. I was going to hook up the systems and just trying to figure out how are we doing even as a company. You mentioned QA. There was a company called Rainforest that did like QA for us. So all those things were not core competes. I didn't want to hire anyone for it. I wanted to hire just the people that could build the stuff that we needed. And so every time we built, we're building a component, it was, can we do that without building it? Is there anyone who does it? And you'll find, especially today, like it was a little bit different from back then, but today, almost every component of your application, you can find Sonya's already built a version of it somehow. That's not that bad. And if you find a component that someone hasn't done that yet, pivot your company and go and build that instead because that's probably a good idea. No, that's fair. And then when you think about what you wanted to focus your team on, how did you, so you said if it already exists, get someone else to do it. But for what people should actually focus on, because then I saw another piece you did about, you know, basically pressure testing your new products and your new widgets and your new, and the new things you try and build out. And you mentioned something in one of these past interviews. It was like, don't go to your peers, don't go to, don't go to, you know, your closest, closer group of friends and see if this is a good idea. You have to go to the people, the true stakeholders, the true customers are going to use it and validate whether or not that piece of your company or that new product is going to be useful. But how do you choose what to focus on? How do you choose what the next project is so that you can hyper-focus on the core competencies or maybe it's pillars that you have in crunch base that you always want to focus on? What does that look like? Yeah, I mean, this is, this is where you've, as a founder or as an early CEO, you need to trust your instincts a little bit, like this, and this is maybe not aligned with what other people will tell you in like the lean startup universe. No, I don't think any customer, any prospect, any user, will necessarily, especially enterprise software, will necessarily go and say to you, this is what you should go and build. Thanks for talking to me. I've got these ideas to, I'm going to tell you what they are. They're always going to react to what you have and they're going to push you down the wrong road if you go and you go a little too open-ended. So, yeah, don't talk to your friends, don't talk to your family. They're just going to tell you, yeah, you're doing a great job. Like, no one wants to tell you the bad news. Even customers are prosperous. They want you to be successful. So they'll always say, yeah, I love this idea. So, at the end of the day, you have to really know your space well. You have to really know your, and I have a vision that you fundamentally believe in and have, you've been intellectually honest with yourself that there's a real market there that you know how you're going to go and approach it. You've thought way deep in the future. Like, I've thought way deep in the future to sort of figure out what problems will we have and then what's my solution and do I believe that solution. And if there's areas where you don't know the answer, like, you've really tried hard and you can't solve a single one of these problems, then talk to users and maybe they'll they'll give you an insight into getting to the answer. They're not going to say this is the answer, but you could try a couple things that you think might work and see which one might work better than the other. But I have this challenge all day. With the crunch base, there's so many things for us to focus on. If I talk to a hundred users, they're going to tell me a hundred things are wrong crunch base. And we're not doing any of them. We're going to go out to this other thing because no one's going to say, you know what, Jagger, I really would love a prospecting CRM that gets me revenue. No one's ever said it to me. And that's why you need a swing for the fences if you want to build a big company. And so that is, you use your intuition. You use your understanding of what's broken in the industry and your intuition to decide what to focus on next. And what's your feedback, Luke, for whether or not that initiative is successful? Yeah. And this is, again, very controversial. But for me, it's, it's, you know, build the prototypes, build it pretty far out, find your prospects and ask them if they'll buy it, you know. And that's, it's, you know, this, I love showing pictures to people. I love people reacting to that. They're not going to have to slides and you don't want to wait until you've built the product, obviously. So just show them the thing and not asking anything other than will you buy it. Like if this was real right now, all the other feedback, it doesn't matter. It really doesn't. I mean, if they say no, ask why. I was going to say, no, I just think that you uncovered something that I think a lot of other founders dance around and why the answer to that question is so uncomfortable is because it requires you to be obsessed with what you're building or to actually have the intuition. The intuition is not luck. Intuition is diving so deep into an industry or a category that the next possible step becomes natural, which is why the most successful entrepreneurs are the entrepreneurs that have been living in an industry for the past 20 years. They find a problem. They try and solve it, right? It's not the Stanford grad that is the highest rate of success for an entrepreneur. So I think that you actually uncovered something. It's that potentially there's a lot of tricks and maybe people try and gimmick and sort of gain the product creation or the ideation process or something new. But ultimately, what it comes down to is just living and breathing what you're building every single day. And that's where you get the best ideas. And that's where you know things that maybe even your customers don't know. Your company doesn't know. That's where you have to trust that you are the expert. But you have to be that expert. And that's a great advice. It's good advice. It may be unrealistic for a lot of people because I can imagine a founder who's just like, just like, well, okay, cool. Thanks Jagger. You're saying go go into the industry for 20 years and then launch your idea like like fuck off. So I guess I get that. But I guess I'm talking to the person who's been at that company stuck in the industry. Dreaming of something better and bigger and they have an idea. I would say your that advantage that you have of being in the industry, leverage it, trust yourself, go after it. You don't have to go through the same risky game of launching something where you don't really know the industry. Like I mentor a lot of companies and these folks will say like, hey, I've got a new like snack company and I've never done food or snacks or anything before. The odds of failure are skyrocketing compared to someone who's coming from that industry. So it's an unfair advantage that I have. One thing that I think is admirable about how you structured your company may have come from your PTSD of being through a company and with your seven rounds of playoffs. But the fact that you don't believe in growth at all costs. So speak to me about what that is. Is it still prevalent in the industry or is that not really something that people believe in anymore? Speak to me about how you build crunch base without that mindset in terms of your business who you hire, your profitability, your investors, you bring on the expectations you set with them. Yeah, I think there's two types of CEOs and there's the one that loves that and you'll see your investors tell you this. CEOs are always fundraising like you should be fundraising all the time and there's a certain CEO type that loves you do that and they agree with that mentality. I think that worked for the last you know, half dozen years, whatever it was. That doesn't work anymore. And so the CEOs that are their type, which is like. Did it never work? Did it ever work though? Well, I mean, surely you could raise money without even trying for the last five, six years. But was your business really being built the right way? That's a whole other set of questions. But for me, it's I've always liked building efficient businesses and we have also operated in something that we would get funding in two to three years. And that's what we've followed. But now with how the market has changed even I've gone even more pragmatic and just said, look, that was our last funding round. Like, great, we raised money. We are never raising money again. And how do we run the business now? I think everyone, even at the seed level of like, hey, I just raised a friend's family or a seed round or a series of A, everyone should be saying, how long can we make this last? And if you can make it last forever, obviously, that's that's the winning move. If it's years and years and years, awesome. If it's like 18 months, I would really take a careful look right now at what you're what you're investing. Are you doing ads spend so you could show growth to the next investor so that you can go and raise that round because someone's telling you you need to be growing at 50% or more every every year. No, you don't slow down because you're that in 18 months, none of us know what funding is I look like, right? Funding is, I mean, we track funding so we have a lot of his billionaires. It's cratered this quarter compared to a year ago. And if it keeps continuing, it's just you don't want to depend on the market game better, which means the dollars in your bank out need to last as long as they possibly can. And I think every CEO is trying to deal with that. The problem is that these fast growing, the other CEO that raises and they are at 10 million in revenue, they raise it a billion dollar valuation, they have 500 employees because they thought they could just get raising around in six months. They're fucked. So now like what you don't know what to do. So you have to lay off, it's ugly. Moral goes down, you're cultured crashes and you might not survive. And that's who the hell wants to do that. Yeah, of course. And you're profitable, obviously. We're not. No, we're not. Nope, we're not. So in the first half of the year, we burned about two million dollars. But we added nine million dollars in recurring revenue. So that's a good burn, like the burn ratio to the net new ARR. But no, we're still burning, but that's why I raised money, right? Like you don't raise. I was going to ask, like when is it right for you? So then as a CEO, your goal when you when you do, and actually I have a question for you, how do you manage, invest, investor expectations? Because if you want to build a profitable cash line company and you say we don't want to raise, if we don't have to, how do you find the investors that are okay with that? Because investors, do they not want an exit opportunity? Well, I think right now every investor is okay with that. What they really do want is they don't want your business to go out of business. So I think I've certainly seen a shift in investor dynamics. I've got a board meeting next week, where obviously I'm talking about what's happening in the market. And what I've seen so far is they say, look, batten down the hatches, I wouldn't protect the investment, right? Get as much growth as you can without overspending. And that's been our mantra for a long, long time. But I think every, every company is thinking the same way, just survive, and don't count on funding. And then one other thing that I thought was interesting, when you, when you, well, actually, I know that part of what you would documented from crunch base is that 1.2% of all funding goes to black founders. And when I was speaking to individual on your team, and we're prepping for this podcast, that's disgusting and kind of horrifying. So what are you doing with crunch base to use your platform for good for helping diverse founders? What are trends that you're seeing? Like 1.2% is, it almost doesn't, it doesn't make sense. It doesn't compute. It's not real how little funding is going to, to minority BIPOC founders. So how do you, how do you fix that? I mean, it's not something that you can fix alone, but what do you think the industry should try and do? Yeah, I mean, there's, there's a few reactions to what you're talking about here. So one is, use your company to do good in the world in any way you can. So we have this amazing channel. Let's go and do that. I recommend every company think about how they can do that. In our case, we have this channel. That channel, let's us go and take the day that we have and express out these sorts of issues. So the reason people talk about that and like women founders, it's also incredibly low. It's, it's, it's in the single digits of women who are getting funded. It's just totally fucked up in our industry. The only reason we know that is because of the data and the only people that are tracking that is us. So that lets us go and push that out to the world to let people know that change. As far as what we can do about it, we meaning the industry not crunch base. I personally think that the, there's a, we need to change how investors, the investors are, are, are hiring. When you have diverse investment committees in these VC firms that make the investments, they make diverse investments insane. When it's a bunch of white guys sitting around the table, they make investments and people that look like them and that's part of the problem. I've seen pushes of like, well, let's go and push for diversity and board boards of startups and stuff. And I think that's a little less realistic because that requires me as the founder to go and find diverse investors when there are very few of them. And that just doesn't work very well. And also when I'm raising, I might only have one term sheet on table. I'm taking that one. I'm not, not taking it because it's not a diverse investor. So you need to change the investor makeup at these firms. And so in a, maybe overly restrictive, but maybe a perfect world, the investor firms would be held to a standard where they have to publish their diversity scores. And then even have expectations of changing them to match something that represents the world that we're living. Is this a 1.2% like post, post, you know, George Floyd BLM? This is in 2022. This is still 1.2%. So has the needle not moved at all? Oh, it sure has moved in the wrong direction. It's gone down. So in a post George Floyd for a moment, for some moment, it went up a little bit. And everyone was optimistic that maybe we were on the right trend. But as soon as the market turned and went down, so did the investment dollars into these underrepresented classes, both gender and race. And that's fucked up. It really is. And the reason, unfortunately, is that the white males who are making the investment decisions tend to think it's a less risky proposition to invest in. So that looks like them. And all of a sudden, it's my hypothesis. When there's no more, when there's not the new cycles anymore, and they don't feel pressure and people aren't blowing them up on Twitter, then all of a sudden they, they don't put the emphasis. They don't put the focus on it anymore. It's just, it's not top of mind. It's unfortunate. That's really actually that's really surprising. And that's why I think it has to happen at the, there has to be a policy. There has to be somebody as an institute because I don't think it's going to happen naturally. Like this is some, well, if you look at this, it's showing that it's not happening naturally. That's right. If people felt pressure and like they were, everybody was given as much opportunities that could ever be afforded to be able to do this properly and be better. Right? Everybody was given that opportunity. Like even, even if you, even if you felt uncomfortable, like the whole world was helping you be supportive underrepresented founders and underrepresented business owners. So now you take that and you can run with it and now you know what to do. Now you know how to maybe find other types of founders that you never invested in before. Maybe you know how to allocate a certain percentage of your dollar because you've already done it and you feel comfortable with that and you've put that into your investment thesis to, you know, so now you're, now you're all set up. But then obviously you just revert to exactly the way you were before. That's no good. So exactly right. And so as a startup founder of your entrepreneur listening to this, like what you can do is mentor. It's free to do, you know, and you can go and help out underrepresented classes and help them with their startup idea. So I try to do that. I've got a number of different avenues and lead sources for me to go and help folks. I'm helping, you know, half dozen right now, help their startup, help make connections for them, help them know who they should talk to, give them feedback on their pitch deck, get them ideas on how they could scale. All that stuff is stuff that anyone can do if you've got a skill set that's applicable and that actually can go and increase the likelihood of success for these underrepresented classes. No, amazing. Okay. I want to, I want to just pick your brain about the future of CrunchBase. Obviously, I have a million ideas coming in every single every single day, but where you should take it. Where do you want to take it? What do you, what do you think is in store? I'm sure you have, like you mentioned, you look 10 years into the future when you're working on a company. So what's next? I mean, you have, you have this incredible product. You are the de facto, like you mentioned before. Where do you take this next? And I want to, I want to bring out a lesson for somebody else that builds a marketplace in another category or another industry and they look at the evolution of that marketplace and how to monetize and how to grow it and then ideas for where you can take it. Yeah. I mean, I get the big thing that we will be working on for the next many years is true CRM. Like no one thinks of CrunchBase as a CRM system. Like it's just that it has disconnected from reality. We don't have half the things you need for a CRM system. So those are things that we're going to build and those are things that are going to come out. That is the future from a product standpoint of what we're doing. Taking one step back, something I really think we are able to do is prove to the world that you cannot build enterprise software without data. You can, the days of building productivity stuff on top of an empty database just doesn't work anymore. And that future of like what AI and what machine learning is going to be helping do all of that needs is data. And so can an expense reporting tool go and do like things automatically based on data that it knows about what's happening in the market. Like for instance, like, hey, I'm paying a certain amount for a vendor's software. What if your software comes back and says, hey, you know what, you're actually paying, you're in the top 10% quartile of what people pay for that particular piece of software. You're screwed. Maybe go back to the vendor and save yourself some money. Like, how could it do that? Well, it has all this data, right? And that's, and that would be the best expense reporting tool there is. You could do that with any single enterprise software out there. If you add a layer of data, it becomes infinitely more powerful than the empty database that you get when you get most expense reporting tools or whatever happens. Or CRMs or anything really. I mean, everything. So I would even ask. And you don't want to, again, you don't want to set your composition up to succeed, but I would ask like outside of, outside of spending 14 years plus aggregating data. Is there a way for another company that was a front end system first with no data in the back end? Is there a way for a company to do that? Yeah, of course. Let's say I had an expense reporting company. I'm like, thanks Jagger. I wish I knew that when I started. What do I, what do I do? The, the great thing about the world today is that there are many, many, many data companies that aren't software companies. Very few have figured out that they should be a software company. And there's very few software companies that realize they should be a data company. So that data is out there. So someone out there is tracking how much people spend on software or or on on vendors in this example. Go find them. They're desperate for dollars. Now data companies are hard to make money on. So go talk to them, forum partnership. Do you a little bit of a rev share with them or something? Just get started. And now you're important that data in. And now you can build that great software. You didn't have to reinvent the world where to get that data from or how to how to source it. You just found that one partner that has it. You can validate the idea and then you can go from there. I would just, if you're building software on an empty database, what data would make would make yourself for a hundred times better? Go find it. Because I can't think of a single example of where it doesn't already exist. I love that. Okay. Last, last, we have one more question I always ask, but before pivot, what would be one piece of advice that you'd leave an entrepreneur with a founder? The most important thing that you've learned over your career, what would be one thing that you just want to impart on them? So many things come to mind. The biggest and most applicable now is don't raise. And I'm not saying it don't raise because it's hard. It's just, it isn't worth it. And you'll build a better business if you say scrappy longer. There's exceptions to this rule. If there's real competition, it's going to kick your ass if you don't go fast enough. Okay. But most of the time that's not the case. So take your time, preserve your ownership, keep your vision pure and go after it. You did it for a reason, you know, and make it happen.