Lessons - The Hard Truth About Monetizing Data | Jager McConnell - Crunchbase CEO
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What is the core challenge of turning a free data platform into a subscription business?
In this lesson's episode, explore how a data driven company turned a free platform into a scalable subscription business under pressure, discover how early monetization validated demand before product perfection, understand why owning distribution became a critical growth advantage, and uncover how layered data systems and partnerships built a durable, competitive moat.
Let's talk about the strategy you used to actually build that model out. So day one, what so you're like, okay, so we have access to all this data. Yeah. People want access to this data. We're gonna sell them a subscription to access this data. That makes sense. Um 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 pe 'cause 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 a hundred percent complete.
And I know like now it's probably advanced. There's probably some sort of black box machine learning AI algorithm that figures it all out. But that wasn't day one. So how How did you first start building it out?
Yeah, so it's it's a great question. So when we when we first spun out, um the data was not that great. It was almost entirely user generated data, which now today it's less than ten percent. So so there was we 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 and so we had a year of runway to change our business model, change the team, um, go and build the software um that that I think people might buy, sell the software to show traction and raise a series B before we're out of money. So it was it was a pretty stressful year that first year as you might imagine. Um and it and it was a It was hard because uh i i you know the there was there's only so much we could do with the skills that we had and the bandwidth that we had.
So the first step was um let's build the thing that it just to see if the anyone who has had this free tool would be willing to pay money for something else. So we built essentially a prospecting search tool. It basically lets you do very complex advanced searches of of the data which didn't exist before. It was more of a lookup tool. I hear it before. Before it was, I know a company, I'm gonna look it up. Now it's um I I 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 monitoring. 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 uh this criteria before, let me know immediately.
Um and that's what we launched um almost exactly a year. year um after we spun out was Crunch Base Pro. Um now we're chart and then we're charging four or nine bucks a month. Um and it was like, okay, well that is this gonna work because now we put it out there. Again, now it's it's tech crunch disrupt. And if no one bought it, we were out of business. And like Two months like like maximum. Um, so luckily people did buy it and we were able to raise a Series B from Mayfield uh shortly after.
And okay, so as your so how did you get your first, say, fifty customers on that? First hundred first hundred customers. It was just through like you leveraged media, I'm assuming, because you had TechCrunch, you had TechCrunch 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 Base is we already had twenty million people coming to our website, right? So they're already coming. All we really have to do is market to the people that are already coming to site.
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Chapters
4 chapters
1
What is the core challenge of turning a free data platform into a subscription business?
0:00–4:39
2
How did Crunchbase initially build a paid prospecting search tool under a one‑year runway?
4:39–10:13
3
Why did early monetization of Crunchbase Pro validate demand before the product was perfect?
10:13–12:16
4
How did Crunchbase acquire its first paying customers and leverage media coverage?
12:16–18:12
Speakers
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