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My First MillionAsking A $100M/Year Founder For Profitable Business Ideas (#413)
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CHAPTERS
- 0:00 – 4:01
Setting Up the Idea Sheet and CB Insights
Sam explains CB Insights' business model of turning dirty data into subscription products, and Shaan introduces Anand's 77-row sheet of startup ideas. The hosts agree to take turns picking ideas and go an inch deep on each.
- •Sam describes CB Insights as nearing $100M a year in revenue with customers paying roughly $30K–$150K a year
- •The product organizes messy, existing data so buyers can make safer decisions
- •Anand shared a Google Sheet with 77 startup ideas
- •Anand is known for a witty newsletter and Twitter presence
- •The hosts will alternate picks and go shallow on each idea
- 4:01 – 8:03
Sawdust Data and the Framework for Data Businesses
Anand explains sawdust data, the residue from other companies' products that can be sold to others, with examples like reservation data and dog-collar data. He then shares his framework for good data businesses: variable SKU, opaque and high consideration.
- •Sawdust data means selling the exhaust of a product, such as OpenTable reservations or Fi dog-collar data
- •Procurement data could be sold to hedge funds
- •Cleaning messy data mostly takes a high pain tolerance
- •The framework is variable SKU, opaque and high consideration
- •Slack questions like 'does anybody know X?' signal opaque markets
- 8:03 – 12:37
Representation Media and Tiny Growing Niches
Anand describes RebelGirls and the idea of extending it to other communities through representation media. Shaan relates it to his own experience as a parent and shares a story about pitching a Broadway idea to Hasan Minhaj.
- •RebelGirls has sold about 5.5 million copies at roughly $20
- •Representation media could extend to groups like Hispanic entrepreneurs or autistic scientists
- •Anand suggests modifying existing stories so the protagonist looks like the reader
- •Shaan notes there is little culturally specific kids' content
- •Shaan tells his 'Aladdin but Black' Broadway pitch story
- 12:37 – 17:33
Daily Executive Briefing Email
Sam asks about a daily executive briefing email. Anand sees it as a tens-of-millions business, while Sam points to Politico Pro as proof it can be far bigger. They also talk about why unsexy data companies are attractive.
- •Anand recalls the American Express CEO receiving a daily briefing from a chief of staff
- •Bulletin Intelligence, bought by Cision, did this and reportedly had Bezos as a customer
- •Sam says Politico Pro reached 100M+ in recurring revenue with niche briefings
- •Niche verticals like pharma, legal and finance could support high prices
- •Data businesses are build-once, sell-many and unsexy, so they attract less competition
- 17:33 – 23:56
SaaS Pricing Data and Pricing Your Own Product
Shaan raises the idea of collecting hidden SaaS pricing data. Anand explains how to build and sell it, and how CB Insights learned that underpricing attracts bad customers. The conversation also covers CB Insights' witty brand voice.
- •Start with public SaaS pricing pages, then have people pose as customers to get quotes
- •Sell to product teams and chief revenue officers, starting around $20–50K
- •CB Insights started at $395 a month and drew customers who churned and demanded support
- •A consulting firm told Anand to add zeros so the price wouldn't look like a joke
- •The company's irreverent B2B voice helps it stand out but has cost some customers
- 23:56 – 30:34
Broke & Busted College Rankings and Pool Pricing Data
Anand pitches a college ranking based on graduates' W-2s versus the debt they took on, as an alternative to US News. He adds a similar idea of door-to-door pool pricing data and explains that most people won't do the grunt work.
- •US News rankings rely on limited, gameable criteria
- •Collect W-2s from alumni to rank schools by pay versus cost, starting with New York colleges
- •99 out of 100 people won't do the manual data collection
- •Door-to-door pool pricing in North Jersey could be monetized via SEO and sold to both buyers and pool companies
- •Anand thinks GPT will make private data more valuable, and data needing refresh retains subscribers
- 30:34 – 33:14
McCormick Spice Competitor
Shaan picks a McCormick competitor, which Anand says is outside his zone of excellence. They discuss brand, packaging, influencer partnerships and bundling, and Sam is surprised by how much McCormick owns.
- •McCormick is described as a roughly $24 billion market cap company
- •Shaan suggests branding, packaging, design and an influencer face for the brand
- •Anand points to bundling across spice categories
- •Sam notes McCormick owns Tiger's Milk and Frank's RedHot
- •Distribution is the main hack to figure out
- 33:14 – 38:17
Anand's Finances, Bootstrapping, and the $100M DM Offer
Sam asks whether Anand has taken money off the table. Anand explains he saved heavily, skipped his own salary for four years, and avoided investors. He then recounts a Twitter DM from someone offering $100 million.
- •Anand went unpaid for four years and has taken no money off the table since the raise
- •He saved religiously before starting and funded the early team himself
- •He avoided early fundraising because he dislikes pitching and working for investors
- •A customer sent a term sheet that led to their fundraise
- •A DM suitor offered $100M, then threatened to build a competitor
- 38:17 – 41:29
A School of Entrepreneurship and Buying Colleges
Asked what he would do with sale proceeds, Anand says he would build a school of entrepreneuring. Shaan describes how cheap struggling colleges can be to buy and why he lost interest.
- •Anand believes education is broken and wants to teach kids to build businesses
- •He mentions the book The Case Against Education
- •Shaan says some accredited campuses sell for single-digit millions to about $15 million
- •DealStream lists many of these colleges
- •Shaan was put off by the all-in lifestyle commitment
- 41:29 – 46:27
Running and Selling a Family Chemical Factory in India
Anand tells the story of taking over his late father's fine chemicals business in India while running CB Insights, and ultimately selling it. He prioritized keeping the team employed over maximizing price.
- •His father died in April 2017 and left a fine chemicals business making a raw material for perfumes and flavors
- •Anand did outbound sales to large chemical companies and had the business's best quarters
- •He ran it for about 18 months with a travel-heavy schedule
- •He sold to a buyer who would keep the team, prioritizing non-financial goals
- •CB Insights' team kept things running while he was absent
- 46:27 – 48:44
M&A Lessons: 'Industry Standard' and Bankers
Shaan reads headlines from Anand's M&A takeaways, and Anand focuses on distrusting the phrase 'industry standard'. He also explains why he skipped a banker for this deal but would use one for CB Insights.
- •'Industry standard' is usually used when a term can't be justified and benefits the other side
- •Give on small things but don't make the negotiation painful
- •Lawyers focused on risk can stall a deal
- •Skipping a banker made sense given the small deal size and Anand's comps data
- •He would use a banker for a CB Insights deal
- 48:44 – 1:02:07
Adani, Hindenburg, and Spotting Red Flags in Companies
Sam raises the Adani/Hindenburg news, and the group discusses convoluted structures, FTX, and Tesla's CFO turnover. They conclude that the same traits seen as genius before a collapse get relabeled afterward, and Anand explains the signals CB Insights sees in underperforming companies.
- •Hindenburg alleged Adani used related-party loans and inflated valuations
- •Anand says convoluted org structures are a warning sign when innovation is in cap structure rather than product
- •Shaan says FTX and Tesla signals, such as young executives and CFO turnover, looked like genius until the collapse
- •Anand's CB Insights data shows underperformance more easily than fraud, such as 3X liquidation preferences or frequent executive exits
- •Anand sometimes sends oddities to journalists rather than publishing them
- 1:02:07 – 1:07:04
Learning from Andrew Schulz's Audience Strategy and Wrap-Up
Anand says he looks at businesses he can learn from, such as analysts of grifters and Andrew Schulz's audience building. The episode closes with thanks, a promise of a part two, and a joke about messages Sam receives.
- •Anand likes media-style companies that investigate grifters
- •Schulz grows his audience by interviewing people adjacent to comedy
- •Anand applies this to partnerships with audiences that only slightly overlap
- •Consumer media is where innovation tends to happen, not B2B
- •The hosts propose a part two since they covered about half the shortlist
