Lessons - Getting Our First 100 Customers Was Impossible | Jager McConnell - CEO of Crunchbase

In this lessons episode, discover how leveraging existing audiences can accelerate growth, the importance of high-quality data in building scalable platforms and strategies for becoming an indispensable resource in your industry. Learn actionable insights on data optimization, partnership-driven growth, and mastering your market position. How did you get your first, say, 50 customers on that? First 100 customers, it was just through, like, you leverage media, I'm assuming, because you had tech crunch, you had 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 the sort of secret strength of crunch spaces. We already had 20 million people coming to our website, right? So they're already coming. Oh, we really have to do this market to the people that are already coming to site, and this will always be our strength. Like I mentioned earlier, 80 million people using crunch space. Can we go and sell them something? So we don't have to, our marketing budget relative to other companies, our size is quite small, because we're just trying to leverage our strength, which is people coming to 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's 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, but by the time we, so we turned a backstage at TechCrouch Distrap down 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 walked 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, if they don't have 20 million people hitting your 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? Or did you find out which data people would actually fork up some cash for and what was not acceptable? Yeah, 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 prospecting 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 just had to do all of the stuff that we thought people might do to sort of figure out what data might be exposed as horrible. And for me, that flipped a switch on, we have to invest more on our data, get ones we get funding to go and change how we get data. So it can't be user-generated because you get squirrely things from people doing weird stuff, like giving themselves a hundred billion dollar funding round. And 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 we re-platformed the entire data set and the and the outside 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 the source of data sources into what crunch bases. 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 and from governments, et cetera, as VCs, data providers, all that is flowing now in a crunch base to 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 wanted to ask 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 started to bind. I mean, you've built this incredible platform. We're talking about data. I'm curious about and it may be I'll just let you speak about all these different topics. So like data security, what people feel comfortable aggregating, especially if they're not 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 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 cost is another interesting strategy. But first let's talk about data that we can go into like sort of business growth strategy. So talk to data all things data. It 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 in the crunch space. Why? Because they want to be well represented on our platform. If your company is wrong on crunch space, investors are going to miss you. They're not going to pay attention. Job seekers are going to think that you're dead in the water or you're not growing or not as because they thought you'd be all those things require you to update your crunch space 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 the date because that's the limit matters for you as a person. Crunch space 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 our platform again. They want to look like tech hubs. They want to be look like their 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 crunch space. Mass massive amounts of data. You think about G2 crowd. They've got all those data on products. Those are tied to company. So we're able to go and absorb that into crunch space. So you have this one stop shop that has all these different data facets coming together. There's no way we as a company could go and get as our core competency to go and generate all that data. There's entire companies that do that. Let's just absorb that data into crunch space. 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, well, I'd be about having to hear a bond board. They give us intent data. That data comes in the flows in the crunch space 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, our AI systems. So that is a combination of crawling legal sources of data for us to go and get data from. And that's 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 even 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. Then the fifth way is we have a team of about 20-ish people who work for crunch space 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 those five things. What's beautiful about that is no competitor out there can do what we do. Like 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 crunch space. Yeah, good luck. You're the I asked like a, 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 sit down on one thing you mentioned. And then we can keep going. So the one thing that I realized is that you became you became you've mentioned this a few times the source that people want to represent themselves on. Now that's that's incredible because if you even look at what you said you you you get data from G2 and I don't know all the different sources you get data from it. 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 that is magic. Whoever you managed to achieve that. That's incredible. That market position that you're in. I think it really comes down to like G2 is definitely a partner or not a competitor in our minds as an example. You're going to go there. You know what I mean though? Yeah, I also represent companies, right? Totally, but you would never go to G2 to like figure out if they've got funding, you know, or if they or if they what their website traffic case like you never you went everything to go there. You say, oh, I'll go to a similar web or an Alexa for website traffic data, but no one had combined it all together 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 country was what the hell does this company do? I have no idea. I'm going to go look at that by crunch base. 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 crunch base 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 crunch base was we 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 exciting 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 G2CRAV. So they see as a lead source. Happy to do that because they're providing value to us.