Anand Sanwal, CEO of CB Insights (approaching $100M ARR), joins Sam and Shaan to work through 77 startup ideas Anand pre-submitted in a Google Sheet. Topics range from sawdust data businesses and representation media to SaaS pricing databases and broken college rankings. They also discuss Anand running his father’s chemical company in India after his dad’s death, M&A negotiation lessons, the Adani/Hindenburg fraud story, and how to spot companies in trouble before they blow up.
Speakers: Sam Parr (host), Shaan Puri (host), Anand (Anand Sanwal, CEO of CB Insights, guest)
Intro: Meet Anand and CB Insights [00:00:00]
Shaan: I love how even though I tried to pick a non-nerdy data idea, it actually underneath the hood was a nerdy data one. You’re like a data hammer, and the whole world is just little nails you’re trying to hammer.
Sam: Dude, this is the best business in the data space. Like a vacuum — you’re the data Dyson that’s just taking in data from everywhere you can.
Anand: Yeah.
Sam: Man, founders are a lot of times not good at explaining what they do to idiots. So can I do it? Can I?
Anand: All right.
Sam: I’m gonna make you look cool. I want to be your wingman. All right. You run — I don’t know if you’d call it software or a data business — but people pay subscriptions. Your company, CB Insights, is now getting close to $100 million a year in revenue, which is a huge accomplishment. Hundreds of employees as well.
And basically — this is the part that’s kind of hard to understand for someone like Shaan and me, because we haven’t run really, really huge companies — but when a company with a thousand people has to decide what software to buy, let’s say it’s just customer support software or payroll, they need to do tons and tons of research to make sure the vendor they pick will stay in business or will be around for ten or twenty years.
You’ve crawled through what you call dirty data — all this data exists out there, but you put it into software that makes it really easy to digest and understand, so a person can make a right, smart decision. And they pay you like $30,000, $50,000, or $150,000 a year to access all that. Is that right?
Anand: Sounds about right, yeah.
Sam: And more importantly — fan of the show and prolific idea guy. Before this episode, he sent over a Google Sheet with 77 rows of random startup ideas. Which just tells me you are one of us. So this is great. We have a bunch of ideas we can go through.
There are a few interesting CB Insights stories you’ve blogged about in the past that I want to talk about, but let’s do those at the end because I think the ideas are going to be a lot more fun.
Shaan: One of the reasons he’s fun — you said he’s one of us because of the ideas thing, that’s true. He’s also fun because even though he comes off like this polite, introverted guy, he’s a badass. His Twitter is hilarious. He writes this famous newsletter to like 500,000 people and signs it with “I love you.” His Twitter bio says, “Please buy a CB Insights subscription. I owe people money.” He always pokes the bear. He’s got a really cool attitude. Hopefully we’ll get that out of you today.
Anand: Yeah, exactly. My kids were excited that you called me a badass, so I appreciate that.
Sam: You’re welcome.
The 77-Idea Google Sheet: How to Run This Session [00:02:30]
Shaan: All right, here we go. Sam, you put your favorites on the list, I put my favorites. What’s interesting is we have almost no overlap — only maybe two out of the ten you put down were my favorites. I had completely different ones.
I say we take turns: we say “tell us about this idea” with the little three-word tagline, he gets to pitch it, and we react. Let’s try to get through a bunch of these — we might drill down on some, but in general let’s go an inch deep on each one first.
You want to go first?
Sam: Yeah, go ahead.
Shaan: All right.
Sawdust Data and Government Data Products [00:03:15]
Sam: The reason I highlighted basically everything is that CB Insights interests me because you’re not coming up with any data — you’re just organizing data that already exists in really easy-to-understand ways, and then selling it at high fees. I think that’s like the greatest business model on Earth.
You’ve listed out a bunch of ideas — including like six or seven that were more of these data-type businesses. You had one called “sawdust data” and you had examples: you can look at what the government does, they have all this data, you can make it clear and easier to understand. What do you mean by all that?
Anand: So sawdust data is — people create products, and sometimes the residue of that product is actually really interesting data. It’s the sawdust from the process. You’re taking that exhaust.
A few examples. I don’t know if these are businesses already, but OpenTable and Resy have all this reservation data. I wonder if you could take that data exhaust and sell it to real estate firms. Hey, reservations are down in this area — this retail space might be on the market soon because this restaurant looks like it’s struggling.
Or there’s a company making GPS-enabled dog collars — like a Fitbit for dogs. You could take that data and sell it to pet insurance underwriters. It’s not your core business; it’s the residue.
Another example: procurement management systems. If you have all this spend flowing through a procurement management system, could you sell that data to hedge funds? Hey, this company’s average contract values are going down, or they’re getting a lot more seats sold this year. Taking data that’s not your core business and building products off the sawdust — that makes sense?
Sam: Totally. The business Shaan and I are in is the newsletter business. It kind of breaks down to just a few things: figure out what content people want to read every day, and figure out how to acquire users profitably. That’s 80% of the business.
What’s the 80/20 for making messy data into a clean data product?
Anand: The messy-data-to-clean-data thing is just pain tolerance. That’s all it is. I think this is actually why CB Insights has done well — we’ve had a bunch of Valley companies come in wanting to splash machine learning on it, but you just have to get into an Excel spreadsheet and clean the data. If you’re not willing to do that nasty work, you’re kind of dead.
The businesses that work — my framework is: variable SKU, highly opaque, high consideration.
High consideration means somebody’s taking on risk or putting a lot of money out there. Opaque means it’s just hard to find. If you go into Slack groups and people are asking “does anybody know a good vendor for this?” — that’s usually an opaque asset class.
Variable SKU means the variability of the product is significant, so you can’t just put it in a comparison table. An iPhone is an iPhone is an iPhone. But radiology software that reads AI images? That’s totally different from one vendor to the next. The internet is really good at commoditizing standardized products. I like businesses where the SKU is variable enough that you can’t just grid them.
When an idea hits on all three, it’s a messy, hard business with a lot of pain, but you can build a real moat.
Representation Media: Rebel Girls for Every Community [00:08:45]
Shaan: All right, I’ll go. You had one called “representation media” — extend the Rebel Girls book for other communities. Your framework for it was “tiny but growing niches.” Talk about the idea with that framework.
Anand: So Rebel Girls — if you’re a parent of a daughter, you might be familiar with it. It’s one or two page stories of famous women in history: Amelia Earhart, Marie Curie, Maya Angelou. Great book, really cool artwork. That book has sold I think 5.5 million copies at like $20, so it’s around $110 million — and that number is probably dated.
The idea is what I call representation media. I bet you could extend that to Hispanic entrepreneurs, autistic scientists — people want to read about and see examples of success in their communities. You could extend Rebel Girls across a bunch of different micro-communities. The niche is growing. People like seeing themselves represented, and these micro-communities are actually pretty large.
Sam: I’ve had a similar idea. We get gifted books that are like kid-friendly versions of Hindu religion stories. As a parent, you think: is there something that adds a little bit of my culture or religion, makes it easy to give my kids something meaningful while still being entertaining? And there’s just not much out there for that. If you added up all those little different communities, that could be quite big.
Anand: Yeah, I mean, even just a simple thing — take a story where the protagonist is a little white kid. Make it a little brown kid, a little Black kid. Kids love seeing “oh, that kid looks like me.” You’re off to the races. It’s not that hard, it just takes some work.
Shaan: Dude, that’s why my wife loves Kim Kardashian.
Sam: Ha. When I met the comedian Hasan Minhaj, he was doing live shows and he asked me, “What would you do with my business if you were me?” I was like, dude, I would stop the live touring thing. You’re on the road 40 weeks out of 52. I said you’ve got to create a Broadway show. Create the next Hamilton. Then that goes on tour — touring is a great business, but you don’t want to be the guy sitting on the stage every night.
I was like, use your creative and comedic genius to do that. He asked what the show was and I said I didn’t know. Then like a week later I just sent him a voice note: “Aladdin, but Aladdin’s Black.” That was the whole voice note.
He’s like, what are you talking about? I go: it’s Aladdin, but Jasmine can’t marry him because he’s Black, not because he’s poor — her family doesn’t approve. He’s like, so it’s just him being Black instead of poor? I go, hey, look, when you say it that way it doesn’t sound great, but I’m telling you there’s something here.
Anand: Ha. Stick to podcasting, Shaan.
Daily Executive Briefing Emails [00:13:30]
Sam: All right, can I ask you about one? This is actually really fascinating and I think it can be a bigger business than a lot of people think — the daily executive briefing email.
Anand: I’m not sure how big this one can be. I think it’s a great side-hustle business. When I worked at American Express, every morning our CEO would get a briefing from his chief of staff: here’s what Capital One did, here’s what Citi did yesterday, here’s what Visa did. That person’s job was to scour the internet, look at financials, product launches, all of it.
There was a company called Bulletin Intelligence that Cision bought. I don’t know what they’re doing with it now, but it was basically that idea — your morning Chief of Staff email. I think if you go niche, meaning financial services, you can reuse a lot of the content across a CEO’s peers. And with generative AI you could make this really efficient. I think it’s a tens of millions of dollars business.
Sam: I think you’re way off. Have you heard of Politico?
Anand: Yeah.
Sam: They sold recently to Axel Springer for over a billion dollars. And where they get roughly nine figures in recurring revenue is from something called Politico Pro. It’s basically — I think it’s around $1,000 a month — and it’s for lawyers and people who work in DC who need to know what legislation is being discussed in real time.
They have these Pro Briefings: at least one a day, sometimes more, really fast short emails. And they have segments for specific verticals — pharmaceutical companies, for example. If you’re in pharma and you want to know right away what’s happening with new laws, or you want to talk to an analyst, you pay tens of thousands of dollars a year.
They scaled that to north of $100 million in recurring revenue. I think if you pick the right vertical — pharma, legal, some kind of finance — you could build a really interesting daily briefing business. You could let users specify which companies they want extra coverage on, and charge tens of thousands of dollars a year.
Anand: You can charge a lot for this. As long as you deliver quality in the morning when they need it, these people have massive budgets. I think Bulletin had Bezos as a customer for a while.
Sam: What’s that company called again?
Anand: Bulletin Intelligence. Cision bought them many years ago.
Shaan: Dude, the reason I like talking to you is you and I are some of the few people who nerd out on data businesses that most people have never heard of. Informa, which is like a $10 billion market cap data and trade show company. Euro Money — another publicly traded company we’ve talked about. These companies are just huge and not sexy, so they’re not talked about in our circles. But they’re crazy fascinating once you dig in.
Anand: Yeah, it’s a build-once-sell-many-times business. Once you build that data or information asset, you can just keep selling it. And they’re unsexy, which is always good — you don’t get all the smart people trying to come in and eat your lunch.
SaaS Pricing Database [00:18:30]
Shaan: You had one on here about pricing data — go extract the pricing data from every SaaS tool. Go to their website, find the prices, organize it all. For tools that require a demo quote, hire someone to go through that process and collect the pricing data. Now you have it. You basically have a giant search engine for software pricing where companies are hiding it on their website. Is that the idea?
Anand: Yeah. You start with public SaaS pricing pages, figure out how to crawl them, or just use Mechanical Turk. Email service providers: what’s the pricing, what are the features. The real killer — and this is maybe borderline — is that a lot of enterprise companies don’t put their pricing on their page. You hire somebody to go pretend they’re a customer, get the pricing, and that’s really valuable.
Pricing is a dark art in B2B. Everybody’s got opinions and nobody has data. If you actually called companies and got that pricing, or talked to their customers, you could do something really interesting long term.
Sam: That’s actually your tagline on the website, right? “Without data, you’re just another idiot with an opinion.”
Anand: I think both of these are stolen quotes. There’s the W. Edwards Deming one — “In God we trust; all others must bring data.” We footnote them.
Shaan: Do you think being kind of silly is a leg up, or do people criticize you for it?
Anand: We get some criticism. But B2B is so mind-numbingly boring that it’s a great way to stand out. I tell the team: love us or hate us, you should have an opinion on us. Most B2B content is pretty vanilla and jargony.
It’s been a net positive, but we’ve lost some customers over things we’ve said. We did a ranking of VCs once and said a specific firm was losing in the ranking — it was just an objective statement — and they canceled their subscription immediately. Which just proves my point. You don’t want access to data now because you got your feelings hurt? You’re down another peg.
And if you mention Trump or Elon Musk — even without an opinion, just an infographic — the lunatics come out. It can be a little odd. But it’s good for engagement.
Sam: You always use things like your headlines are really good, and there are just phrases built into your culture. In your annual review you wrote something like, “We did pretty good for a company that isn’t lighting money on fire like the rest of the VC world.” Just little phrases like that. It makes you have a voice.
Anand: It’s partly for the external market and partly for the team. You’re selling B2B software, and sometimes if you’re 22 and just out of school, that’s not super inspiring. Once you can show them they can have personality while being in the tech economy — it works. We screw up a bunch of things, but that’s been good for us.
Sam: If I were going to go do what you said — get all the pricing data, hire people to call and get quotes — who would I sell that to?
Anand: Product teams at software companies, or Chief Revenue Officers. Say: do you know how you came up with your pricing? Here’s what your peers are pricing at. Give them a snippet, a taste. Say we have all this other detail behind it.
How much would you charge? I’d say start at $20,000 to $50,000. It’s easier to start high and go low than the other way around.
Sam: You just handed someone listening a pretty solid idea.
Anand: The thing people do is underprice. Our first CB Insights subscription was $395 a month. What you actually got was a bunch of people who didn’t know how to use data, who were a pain in the ass — people who churned quickly, paid you little, and blew up your chat support constantly.
Then I met a management consulting firm that said, “Can you add a couple zeros to the price? One, your price looks like a joke internally. Two, I don’t want to wait behind the guy paying $395 a month for service.” Price is a signal of quality, a signal of other things beyond just the core value of the product. That was eye-opening. We’re now orders of magnitude higher than when we started.
Broken College Rankings [00:24:30]
Shaan: All right. Let’s do the college rankings one. You called it “broke and busted college rankings.” What’s the insight?
Anand: U.S. News and World Report is the preeminent college rankings, and there’s been plenty of coverage about how it’s basically a con. Universities do all this finagling to get higher. They have these subjective criteria — student-to-teacher ratio, for example — and universities massage that data so it looks good. It’s an unclear set of factors, and it’s not obvious how causal they are to actually getting a good education.
I think U.S. News was doing around $40 million in revenue in 2013 and probably has over 500 employees now, so I’d guess it’s doing $100 million-plus, and college rankings is probably their number one thing.
Here’s what I’d do: go to graduates and just ask for their W-2s. How much are you making? You just took on a bunch of debt — does this place actually get you a job that pays? I think you reach out to alumni, get their W-2s, and build a ranking: here’s how much I paid, here’s how much I make when I get out. If I’m a parent, I’ll care about that. I don’t want to send my kid to a school where employment prospects are garbage.
It’s a very singular characteristic — doesn’t take into account social life and all that — but it’s pretty important, especially when people are leaving school with tons of debt. You probably pay those students a little, but it’s pretty cheap. Start with New York colleges. Don’t try to be everywhere right out of the gate. Build out from there.
Sam: Do you want to like — I find this fascinating because the opportunity is clear. But when you say “go get the data,” someone like me would think, okay, I’ll Google for a database. But you’re saying no, you’d just hire someone, or use Mechanical Turk, or just make a ton of phone calls. And once you do that work, the beauty is 99 out of 100 people won’t. Right?
Anand: Exactly. Once you build the data asset, most people will think it’s cool and just won’t do it.
The other one I like — I don’t know if I put this on the sheet — I was trying to get a pool built at my mom’s house and pool pricing is just opaque, highly variable, and high consideration. Some kid should just go door to door to every house that has a pool and ask: how much did you pay? Get the specs. Find out what they pay per month for cleaning. Literally build the database. That’s a great idea in North Jersey: here’s what a pool costs.
And people Google that. “Pool cost” plus their city is a search term people use. You’ll get clicks. Then you go back to the pool contractors: hey, I’ve got this pricing data, and next time you want a bid, you need to know what your competitors are bidding. You can sell the data to both sides.
It’s a perfect side hustle. I hope my kids will just go do this door to door.
Shaan: I love that. And I think the whole GPT thing is actually going to make private data like this even more valuable. Before, you’d give Google your data and get traffic back. That’s going away. Having access to private data is going to be really valuable.
Anand: Yeah. And maybe counterintuitively, you want data that requires a lot of refresh — because that’s what keeps people subscribing. If I can get the data once and it’s good for three years, I’ll churn and come back in three years. When there’s more volatility, people need to stay subscribed.
For the pool example, the pool owner is only going to buy a pool once — but that’s okay, because you can sell the leads to pool contractors, to pool cleaners. You can build advertising and lead gen businesses off of it. It doesn’t have to be just selling the data.
McCormick’s Spice Competitor [00:31:00]
Shaan: Okay, I got one that there is no way is a data idea. A McCormick’s spice competitor.
Anand: This one I don’t have a lot on. It’s in my “zone of excellence” column — which means it’s outside of my zone of excellence.
McCormick is a multi-billion dollar spice company. Open your spice cabinet — those spices with the red top, that’s all McCormick. $24 billion in sales, public company. So it’s like… why isn’t there the Apple of black pepper? I don’t really know how to do this, but there’s something to the idea.
Shaan: I think for this one you either go higher end or just lean into branding, packaging design, and — most importantly — influencers. Who is the Martha Stewart of YouTube that you can partner with? Who has the brand and gravitas to get into a Target or supermarket to compete with something like this?
Anand: Yeah, 100%. The bundling is interesting too — if you buy salt you need pepper, if you need pepper you might need oregano. You just keep stamping this out across every spice category.
Sam: This is outside my zone of excellence too. But they own everything. Have you ever seen this protein bar at gas stations called Tiger’s Milk?
Shaan: Yes, they own that.
Sam: It’s the worst looking label. It looks like it was drawn by Kenny Powers. It’s called Tiger Milk and has a tiger face. And McCormick owns that. They own Frank’s Red Hot too.
Anand: Frank’s Red Hot! That’s my favorite. What a company.
Sam: Created in the 1800s, and they just own the whole spice aisle. Brand recognition. You’ve got to come up with a distribution hack, but that’s probably more Shaan’s world.
Anand’s Equity Situation: Being Foolishly Long [00:34:00]
Sam: Can I ask you a quick question, different from the ideas? I’m going to assume that you own a chunk of CB Insights and you’re on paper worth somewhere in the low-to-high hundreds of millions of dollars. Have you taken any money out of your company? Or has your only income for the last ten years just been a normal salary?
Anand: I didn’t pay myself for the first four years. When we raised money I took back salary. And since then, I’ve not taken any money off the table. So I’m foolishly long — or brilliantly long — in CB Insights. We’ll see how things play out. But yeah, I’m all in.
Sam: Were you wealthy before you started the company?
Anand: No, no. I got married right before I started the company. I told my wife when we were dating that I don’t want to work at a big company anymore, and there are going to be some lean times. She was on board. I just saved religiously — we didn’t go on vacations with friends. It was always awkward. They’d say, “Do you want to go somewhere?” And I’d say, “I’m super busy.” Because I just couldn’t say I don’t have money.
For the first two years of CB Insights I just paid for a small team out of my own pocket, and then we started generating revenue.
Sam: But wait — why haven’t you taken a few million bucks off the table just to make your life a little bit better?
Anand: It would have no material impact on my life. And candidly, part of the reason I didn’t raise in the beginning was that I don’t think I’m good at pitching, and I also worked in venture and didn’t want to work for my investors. That was always a guiding principle of mine. When I look at S-1s of companies that go public and the founder owns five percent, I’m like — that’s just a backwards calculation.
Right now would not be a good time to do that given where the markets are. I figure we’ll just keep growing out of this current malaise and opportunities will present themselves. Even our fundraise was organic — a customer just sent us a term sheet over email.
The $100M Twitter DM Offer [00:37:30]
Sam: Tell the story of the guy who offered you $100 million via DM. How did that go?
Anand: You know, I get some interesting DMs on Twitter. Somebody offered $100 million. I think this guy was broke as a joke, but it was still funny. I said, not interested, not looking to sell. And then the email chain kind of devolved from there.
Shaan: You posted the DM screenshots. It starts: “Hey, here’s who I am, really interested in a partnership or acquisition, let’s talk, please call me.” And you reply: “Thx” — not even “thanks,” just THX.
Anand: Short thanks.
Shaan: Then he goes, “How about a partnership?” And keeps going. Eventually he says, “Here’s my offer: $100 million for the business. As a fiduciary, you have to present this to your board. Let’s go.” And you go, “Okay, interesting strategy. Best of luck.” And then he writes, “So do you accept the offer?” And when you don’t, he devolves into: “All right, then I’m going to create a competitor.”
Has that competitor launched? Is he in your lunch yet?
Anand: We’re tracking it religiously to see when this launches.
Shaan: You should have him back. “Hey, how’s it going, man? Curious about the latest details.”
What Anand Would Do With the Money [00:39:30]
Sam: What would you do with the money if you sold?
Anand: I want to build a school of entrepreneurship. I think education is broken. Kids should just learn how to build businesses and not go to college. There are a bunch of struggling colleges I could buy — go buy a plot and build a real campus for high-achieving kids and just figure it out. I read a great book called The Case Against Education that breaks this down.
I’d love to do some of this in India too. But yeah, this would be my last true startup.
Sam: I’ve looked into buying college campuses. You can buy full campuses for sometimes single-digit millions — sometimes $10 to $15 million. It’s crazy. These are accredited universities.
Anand: Is there a Zillow for bankrupt universities?
Sam: There should be. There’s one website called DealStream that has most of them. They send me emails — “multi-campus beauty school, here you go.” I got one two days ago.
Shaan: What made you sour on this idea, Sam?
Sam: Just the lifestyle component. If I was going to do this, I’d basically become the dean of the school and it would be my whole life. I was like, it’s a lot easier to just have a business I can do on my laptop four hours a day and hang out with my kids. There’s an all-in version of entrepreneurship I’m no longer super interested in.
Same thing with speaking — in the last three years I’ve been invited to speak at maybe 150 events and I’ve said yes to two. You can make good money and grow your audience doing it, but it seems like a lot of work. I’ll just win the way I want.
Running His Father’s Company in India [00:43:00]
Shaan: Have you read the blog post that Anand wrote years ago about how his father got sick and he had to go run a factory in India?
Sam: It’s actually that his dad passed away.
Anand: Yeah. My father passed away in April 2017. He had a chemical business in India that he’d built over many years. I was like, I can’t just let it go to zero.
So I ran it while I was also running CB Insights, for about 18 months.
Sam: What kind of chemical business?
Anand: It’s in a sector called fine chemicals. He made a raw material that goes into perfumes, flavors, and fragrances. One of only three manufacturers in the world that could make this particular product — it was a really finicky product. And I’m like, all right, I’ve got to run this. My dad was a mad scientist, off-the-chart smart. I’m not that.
So the only thing I could think to do was bring in more business. I just went online and cold-called every large chemical company in this space: “Hey, we make this product. If you ever need it, come talk to us.” We had our best couple of quarters ever while I was running it.
Sam: Because you were doing outbound and he wasn’t?
Anand: He was a product guy. He believed the best product will win. The side of the building — I should put this picture up — literally just says: “Good Quality = Good Business.” Times New Roman font, on the side of the building as you walk in.
Sam: Oh my gosh.
Anand: I was like, I can try to go sell, because I can’t help on the technical side. The team he’d assembled was awesome — they kept the factory running. I kept reaching out to buyers and tried to make sure the people coming around weren’t bottom-feeders, because I wanted to make sure the team landed on their feet.
Then I met a banker representing a legitimate buyer. After about 18 months, I sold it. For a while I was insanely ambitious — I was like, I’ll have CB Insights as the data arm and this industrial arm, and we’ll be a conglomerate. My wife, I was telling her we need to have more kids so we can staff up all these arms of this industrial empire, and she was like, you’re insane.
Then yeah — six weeks here, ten days in India — it was brutal. So I was like, all right, I’ve got to sell this.
Sam: What did you sell it for?
Anand: I can’t disclose, but a good amount. I wasn’t optimizing for dollars — I was optimizing for a clean deal to a person who would not fire everybody my dad built the business with. I’m sure I could have gotten more from someone who would have torn it down. But I felt really good about these buyers. It achieved non-financial objectives that were more important to my mom and to me.
Sam: This is a really, really good blog post. The title is something like “How to Manage and Sell a Company in an Industry, a Country, and a Business You Don’t Know.” It kind of got lost over the years.
Anand: Yeah, the team at CB Insights kept the trains running on time while I was an absentee CEO for a little bit. I’m glad to have those takeaways to share.
M&A Lessons: The Danger of “Industry Standard” [00:49:30]
Sam: You listed out some M&A lessons. I’ll read the headlines and you tell me which one you have a strong point of view on. “Should I have hired an investment bank?” — you didn’t have one and represented yourself. “Don’t let lawyers run the process.” “Don’t sweat the small stuff.” “The phrase ‘industry standard’ is one to watch out for.”
Anand: The industry standard one is the one I hate the most. People only use that phrase when they can’t justify a term. “That’s just industry standard. That’s how we do things.” There’s no such thing as industry standard. If it’s good for you, that’s what you should aim for.
Anytime I hear “industry standard,” my ears perk up. It means somebody’s trying to get one over on you, or trying to sweep something under the rug. It’s always industry standard to the benefit of the person across the table. It’s never industry standard and good for you too. That’s one I would always push back on.
Sam: Don’t let lawyers run the process?
Anand: Lawyers are trying to mitigate risk. It’s easy to have everybody get entrenched in risk management and not actually have the deal go through. You want lawyers involved, but you don’t want them driving the negotiation.
Sam: On bankers?
Anand: For this deal — selling my dad’s company — it didn’t make sense to use a banker. It wasn’t a big enough deal and I had CB Insights data on comps, so I was good enough. But for a CB Insights deal, we’d absolutely have a banker. I’ve seen the value of what a great banker offers. You don’t want to leave money on the table at scale.
The small stuff point: put some stuff in that you want to negotiate on but don’t actually care about — things you’re willing to give on. Don’t make every single thing painful. Save your energy for the things that matter.
Adani / Hindenburg and Fraud Signals [00:53:30]
Sam: One thing happened over the weekend that Shaan and I had talked about a couple months ago. Do you remember when we talked about Gautam Adani? You were like, this guy’s amazing, look at what he’s doing. Doesn’t care about looking cool, gives money away, kind of looks like an Indian Mario. He’d gotten to second or third richest man in the world and I don’t think most people knew his name.
A lot of people were DMing saying “you guys called it,” because Hindenburg Research just dropped a report saying the whole company might be fraudulent.
Shaan: I said it as a footnote, not as a call. I remember reading about it and some people were saying it was a bit of a shell game — borrowing against one company he owns to fund another, each entity serving as collateral for the next. I don’t think we were calling him out. People are giving us a little more credit than we deserved.
Sam: Hindenburg Research is a short seller — they short companies and produce scathing reports. They’ve done this a dozen times. They’ve built a pretty good track record. They released a report saying the entire Adani group has some really weird things going on. All the subsidiaries are run by his relatives or former executives. He’s loaning money from entities he owns to other entities, and making the valuations of those companies look high. It’s a little FTX-esque — entities owned by the same person loaning money to each other, with the collateral being a company he values himself.
Anand: I like what Hindenburg does at a high level. We live in an age of grifters, and you need people who shine a light on that — whether it’s Hindenburg, CoffeeZilla, Wendover Productions. I don’t know if the Adani case is a good one or a bad one, but I appreciate what they do.
The general point — when you see an org structure that’s really convoluted, like FTX or Adani or Enron before that, people always say in the moment: “Oh, these guys are geniuses, they figured out how to move money across entities.” And then you look back and it’s always just a giant shell game.
When the innovation isn’t the product but rather the capital structure or some weird financial engineering, that’s a red flag for me. Same with companies that innovate in HR — doing all these weird perks. I’m like, don’t you have to build a product? Why are you innovating on three-and-a-half-day workweeks?
Sam: You find signals that companies are in trouble. Have you ever caught any scams, or made right predictions based on your data?
Anand: We don’t publish that stuff — we send it to media because we’re not a media outlet. But we’ll find a company that raised at a $4 billion valuation, and when you look at the founders and the number of employees, something’s off. We’d send it to a journalist: “Hey, this looks odd, you should dig into this.”
The more interesting thing, sometimes, is you dig into the filings of companies after they’ve been acquired by a public company. It’s not a scam, but you’ll see a hot company that claimed a huge acquisition, and then you see how much the public company actually paid — it’s like one-eighth of what they raised. That shines a light on what was a real success versus what wasn’t.
Fraud is a tough one. If someone’s good at it, they’re hard to catch. Underperformance is a lot easier to spot.
Shaan: The thing about fraud signals is that the same signals that later look like red flags were the things people were calling genius at the time. With FTX: “Oh, they all live together on bean bags.” Later that becomes “they had this weird inappropriate group situation.” Or: “They only have 25 engineers and they’re doing more volume than Coinbase.” Later: “Of course they had terrible security practices.”
Anand: Yeah, 100%. Same exact signal, two different labels depending on the outcome.
I do think there are signals right now for underperformance that aren’t fraud. You’ll see a company raise at a $1 billion valuation and when you dig in, you see the liquidation preference is 3x — that doesn’t get reported. Or the CRO or CMO leaves every six months. Like Shaan said with the CFO — that indicates problems.
What Impresses Anand: The Grifter-Watchers and Andrew Schultz [01:00:30]
Sam: What’s a company that impresses you that most people don’t talk about? It’s probably going to be in the data world.
Anand: The area I like right now — I don’t know if these are great businesses yet — are the folks analyzing grifters. There are a couple of media companies digging into pastors and the evangelical pastor world, and the stuff they do is phenomenal. That’s a rabbit hole I go down a lot.
And then looking at the businesses of people like Andrew Schultz. I think there’s a lot to learn from how they do marketing and build audience.
Sam: What can a “boring company like yours” learn from Andrew Schultz?
Anand: I appreciate the insult. The thing he does really well: he doesn’t just interview other comedians. He interviews people who are adjacent to him. That expands his audience by tapping into a Venn diagram with less overlap.
Theo Von mostly interviews other comedians — and that’s fine. But Schultz interviewed Neil deGrasse Tyson and I bet that brought him a whole new audience. The “Schultz strategy” of finding adjacent guests keeps expanding your world.
For us, it’s always: who has an audience that’s not exactly ours but has some overlap? Would those people kind of like us if they knew about us? That could be newsletter partnerships or co-published research. Looking at what’s happening in consumer media is always interesting because that’s where the innovation tends to happen first. It usually doesn’t start in B2B.
Closing: Part Two and a Note About Those DMs [01:03:30]
Sam: Dude, I appreciate you doing this. You’re fun to talk to.
Shaan: We only got through maybe half the ideas on the short list. If people like this, we should do a part two and do more ideas.
Sam: Thanks for coming on, man. This is fun. I appreciate it. I’ve seen you tweet about the show for a while now, and that’s one of the cool moments of doing this for us — when people we respect enjoy our stuff. It gives you a little extra wind in your sails. It’s different than just watching numbers go up. When someone you think is cool likes your stuff, that means something.
Anand: Appreciate that.
Sam: By the way, Anand — it’s kind of your fault. I get lots of messages a day, but like five of them are from young men in their twenties who just send me “let’s fuck.” That’s it. The whole message.
The reason: one time I was on my way to the airport. I hate flying, so I take Xanax when I fly — it’s the only time I’m ever inebriated. I was very high and I messaged Anand: “I’m in your hood, let’s fuck.” And he replied: “I’m down, here’s a restaurant, meet me there.” I told that story, and now I get a bunch of men messaging me.
Anand: Living the dream, Sam.
Sam: Someone’s dream. Not my dream, but someone’s dream. I’m living a person’s dream. You’re going to pay for that. But thanks for coming on — this was fun. We’ll talk soon.
Anand: Thanks, guys.