Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart and the place where I’ve done interviews with over 1,000 entrepreneurs.
And you know, when I started doing interviews, if there wasn’t I wanted to reach out to and didn’t know them, I was either out of luck or I would just go to the website that was founded by today’s guest, a site called Jigsaw where I could pretty much type in anyone’s name or even a company name and a position and find the name of the person who was there and find their email address and I could reach out to them and without any connections I was able to make connections and have people do business with me and come on to do interviews–fantastic resource.
The company was called and still is called Jigsaw, actually not so much the company anymore because it was sold. And today I’ve got the founder of the company on here with me. Jim Fowler is the founder of Jigsaw, a company that he launched in 2003 and sold to Salesforce in 2010.
I invited him here to talk about how he did it and I also want to find out about his latest company, Owler. Owler is a free outside resource for tracking and understanding your competitors. So, if you want to see what people who are competing with you are up to, you just go type in your site name into Owler’s website and they’ll email you alerts.
This whole interview is sponsored by HostGator. Later in the interview, I’ll tell you about them. But for now, if you’re looking to sign up for HostGator, get 30% off by going to HostGator.com/Mixergy.
Jim, welcome.
Jim: It’s a pleasure, Andrew.
Andrew: What did you sell the business for?
Jim: You mean how much money or…
Andrew: How much money? The why we’ll get to later.
Jim: It ended up being a $175 million deal, which in 2010 was one of the biggest deals of that year. Now companies wouldn’t bend over to pick that pocket change up off the street.
Andrew: I’ve got a feeling they would bend over to pick that pocket change up off the street. You know what? I’m looking at a Business Insider article here that says you sold for $142 million.
Jim: Yeah.
Andrew: What’s the discrepancy?
Jim: Yeah. So it was the first big deal that Salesforce ever did. Before Jigsaw they had done a few smaller acquisitions, but we were the first company that really had a reasonable size to it and a reasonable revenue stream. They were really concerned about what the Street would think if they paid up for a company. So the deal ended up being announced at $142 million. There was $8 million in cash that they didn’t include in the deal which we kept.
Andrew: Because it was your cash, they could exclude it.
Jim: Right.
Andrew: Okay, cash in the business.
Jim: Normally a company would say, “Okay, we’re going to buy you plus your cash,” and they wanted the lowest price possible to talk to the Street about. And then there was a $25 million earnout which we made. So it ended up being a $175 million deal.
Andrew: You called it with me on the phone before we started. You said it was a layup. They basically made it easy for you to get that extra earnout.
Jim: Yeah. You know, it was a win-win for everyone, but we were doing really well. I think Jigsaw was a company we potentially could have taken public if we wanted to. We were certainly on a great growth path at that point in time. It was a win-win. Salesforce is a great company to work with, but at the time, they were concerned and of course we didn’t want to sell for a lower price than we thought so.
Andrew: I want to get to the story of how you built it up and learn form you, but there’s one thing we have to talk about before we get into that, which is your mom. Your mom was an investor. When the business sold, how did your mom do?
Jim: Well, actually it was my mother and my stepfather. My stepfather, he’s the senior tax guy Baker & McKenzie, which is a huge international law firm and specializes in tax. So they invested as angel investors and they did fantastic. They’ve always been so supportive, so it was just a great, great deal. But they made lots of money. We ended up co-investing in the series A for my current company, Owler. We built like a $1 million of our winnings and invest–
Andrew: $1 million out of the winnings, they made millions off of the investment that they made in your business for Jigsaw.
Jim: They did.
Andrew: Yeah. That’s got to feel good, no?
Jim: Oh, yeah, it’s wonderful. I’ve said it before that the money that you make for other people is far more gratifying than the money that you make for yourself. There are ten people that became millionaires or made $1 million or more if they didn’t become a millionaire for the first time when we sold Jigsaw. I just couldn’t be more proud of that.
Andrew: Yeah. That’s got to be such a good feeling. And the whole thing started, actually, from a bad feeling. You were working at a company and something happened with the boss above your boss. Can you help me understand what it was and how it led to this business, to Jigsaw?
Jim: Yeah. Well, first and foremost, every entrepreneur, I think, wants to be the boss. So you’re always going to get frustrated with decisions that anyone makes. So it wasn’t necessarily this guy. There was a decision that got made that I didn’t agree with.
Andrew: What was the decision?
Jim: That’s probably airing a little bit of dirty laundry, to be honest.
Andrew: Okay.
Jim: But it was really about how we were going to handle a sales compensation issue. It affected me personally, but more importantly it affected two of my most important salespeople. I just remember going home being very frustrated about that. Whether it was a right or wrong decision isn’t really that important. The important part is that I went home, I’m complaining, and my wife just looked me square in the eye and said, “Honey, you are never going to be happy until you’re running your own company.” That’s when I just went, “Dammit…”
I had been thinking about these ideas. I’d had a few. I’d taken a couple to some angel guys I knew. They’d politely say, “Oh, that’s a good idea. How’s your wife?” which means it’s a crap idea. But I just decided I’m going to go spend some time and figure out–I was 35 at that point in time. I was like man, time’s running out. I had a wife and a kid and a mortgage. And I was like, “If I don’t do this now, it may never happen.”
Andrew: And so did you quit your job first and then find the idea or vice versa?
Jim: Vice versa. What I did–I’ve always been an early riser. I was a Navy diving officer way back when I first got out of college. So I’ve always been an early riser. So what I did is in a really disciplined way, I took from 7:00 a.m. to 8:00 a.m. and blocked it and I shut the door of my office. I didn’t look at email. I didn’t answer the phone. Nothing. And I just got on my whiteboard and started brainstorming. Every morning, that was my time. It was when I was freshest. I do all my best thinking early in the morning.
Andrew: What time do you get up that at 7:00 a.m. you’re ready to roll?
Jim: I usually get up at 6:00 or so, right around there, maybe 6:30 at the worst just depending on the situation. But at that point in time I was definitely up at 6:00. I had a young child. My son must have been one at that point in time or close to it. I just was really super disciplined about it and just went in and just started thinking about all these ideas.
Andrew: So what was your process for coming up with the idea? Actually, what was the ideation process like?
Jim: Well, the first thing I did is I sat there and said, “What do I know?” I worked my way through the sales ranks. I was on my third stint as a VP of Sales at this point in time. I had been a bag-carrying sales guy and director of sales before that. So I knew sales. So I started thinking about, “Well, what are the problems that I have in sales?” I’d had this idea for a game. It was kind of Miller Heiman sales training meets Grand Theft Auto. Like how do I gamify learning? I’ve always been big about sales training and professional development.
So I thought, “How do I teach sales in a way that would be fun?” I met a couple of guys that knew gaming. I’m not a technical guy, or I wasn’t. So I didn’t know whether you could build a game with you and one really good guy working in his underwear out of his apartment, or do you have to have a studio. Well, I quickly found out that a) the market was small for that, number one, and b) to do it right, you really needed more of a studio and a bigger group.
I quickly abandoned that idea. That will be one of my first pieces of advice to your listeners. Really go through–it’s one thing to have an idea and everyone is going to find a reason to say your idea sucks. So you can’t let just one person telling you that your idea is bad–
Andrew: And many people thought that Jigsaw was a horrible idea as we’ll get to in a moment.
Jim: My cofounder, Garth Moulton, his wife, I tease her to this day, she said, “This is a stupid idea that will never work.” I had many people tell me that. But people that I really respected and trusted–because there was another interim idea. It was kind of this idea of, “How do I make remote reps more successful?” And remote sales reps fail at a furious rate. They’re alone. Sales is a lonely game. I just think that reps are more successful when you can have that camaraderie and also that competition. So, how do you do that?
I was thinking about this way of getting them together. Like if you’re working out of your home in New York City, how do I get you to a place where–it’s not just some office that you rent alone, but how do you get on to a sales floor even though you’re all maybe working for different companies?
That idea was a mediocre idea. I thought, “Oh, I can make a company out of it, but it’s not really big.” And I started to think, “Well, what are all the things you could do to help this better?” And one of them was sharing leads. I’m like, “Well, you can do that on the Internet.” And then all of a sudden–I’ll never forget–I’m sitting in my office and I remember the light that was coming in through the window of my office. It was just like a lightning bolt that hits you. I just went, “This is the idea.” To this day, it still kind of gives me those chills of like you just know, like this is it. I knew it the second I thought about it that this idea had legs.
Andrew: You know, Jim, I see that part of your process is saying, “I’ve been in sales for years.” You were working at a sales company right after you were done whiteboarding, right? That was your day job. Before that, you had worked at two other sales positions. Am I right? I’m sensing maybe I’m off on that.
Jim: No, no, no. I was a sales guy. Yes. For six years, I had been a salesperson either as a VP of sales or as a sales guy.
Andrew: Okay. So your idea seemed to have that understanding that you know sales and further, what are the problems that you have a salesperson that your business could solve? Am I right that that’s it or am I putting words in your mouth?
Jim: No, you’re exactly correct. I realize I didn’t answer your first question, which is I didn’t quit my job. I just took an hour out of my day every day, first thing.
Andrew: That’s what I meant, that after you whiteboarded, later in the day you were going to work in sales. So you understood it and so that makes a lot of sense. What I’m trying to figure out is what was it about this idea that made you feel like a thunderbolt hit you, like this was the right one. If you were to analyze it, was it that you realized that you had this problem a lot? Was it that it was a solvable problem? What was it that made you think this was the one and not the others?
Jim: There were a bunch of factors that really affected that, Andrew. Number one is that it was an Internet-based business. So what this came out of, you’d have to go and either rent or work with real estate people that have office space. That’s a really hard thing to scale, has a lot of capital. In 2003, there was still a deep freeze on the whole bust. Almost nothing was getting funded in ’03.
The first cracks in the ice were just starting to appear in ’03. This was middle of ’03 when this idea hit. It basically took me five months to get the idea from thought process to funded. We ended up funding it in December of ’03. So the main thing was that the scalability of the business and just coming up with a model around it, although the monetization concept I had at first was wrong.
Andrew: What was the original monetization concept?
Jim: So the original thought was that salespeople spend a lot of time, exactly like you said, “I know I’ve got to sell to this company. I don’t know who to talk to. Even if I can figure out who to talk to, I still need to contact them directly.” By the way, you’ve got to realize that at that point in time, there were a couple of social networking sites that were hunting around this. LinkedIn we know. Rise was in there in the mix. But the big ones were Spoke and Visible Path. Both of those got crushed by LinkedIn.
But at the time, LinkedIn–I’ll never forget seeing Reid Hoffman and Antony Brydon and Ben Smith who were the founders of those three companies up on a panel with Esther Dyson having a shootout that Rafe Needleman was hosting. I remember thinking this is a totally different model. This is about networking. Mine is about data.
It’s about salespeople need direct dial phone numbers, and they need business email addresses because they’ve got to reach out. Networking doesn’t work as well for sales because people don’t want to waste relationship capital to introduce their network to salespeople. It’s just a flat out fact. If you do that, people are not going to network with you anymore.
Andrew: So when I first discovered Jigsaw, I remember the idea being I could either pay $1 per phone number and email address and it was on a membership basis. S, I could pay, I think, $25 gets me 25 of them, or I could upload some contact information, their phone numbers and email addresses, names, positions, etc. and then I would get one for one exchange. But that wasn’t the original model. What was the original thought that you had for doing this?
Jim: Actually, you’re hitting on the original model. What we thought was every salesperson on the planet needs this. They spent a lot of time in what I call prospecting, digging this data out of the dirt. In fact, we had a lot of people when we first started saying, “I can go get this information.” And I said, “Sure you can. You can also change the oil in your car. But do you do that?” Well, maybe you do. But the main point is we’re going to save you a ton of time.
Andrew: A ton of time. So that was the original idea, that you know you need to get all these people’s contact information into your system. You know you’re starting from zero. Where did you come up with the idea that, “I will allow people to add to my database and in return, for everyone that they add to my database, I will give them one contact.” That was brilliant. Where did you come up with that?
Jim: Yeah. That just kind of came literally right at the beginning with that thunderbolt. It was really weird. It was like all this stuff came in. The skeleton of the idea came all at once. You had to keep it simple. By the way, our original business model was any sales person can expense $25 a month without getting permission. You’re not going to get sweated about. So, we just thought, “We’ll get millions of sales people globally all giving us $25 a month.” That was the original model.
It’s funny because my boss at the time–I went to him when I did this. He’s still a great friend of mine. His name is Kevin Akeroyd. He now has a huge job at Oracle running the Oracle marketing cloud. But at the time he was SVP of global sales and services where we worked. I worked for him as VP of sales. I went to him and said, “This is a great idea.”
Because I went to him and I said, “Hey, boss, I’ve got to tell you I’ve come up with an idea. I need your advice, number one. Number two, if you want me to go clear my desk, I’ll do it.” He says, “No, no. Don’t do that. I need you to keep running the sales team until I get your replacement. This is a great idea, but you’re not going to make your money $25 a month. You’re going to make your money selling all this data to marketers for a lot of money.”
Andrew: Interesting.
Jim: At the time I didn’t believe him. I ended up hiring him as my COO and he was dead right. That’s where we ended up–
Andrew: Really, I thought it would be the $25 a month also, that that’s where the real revenue was.
Jim: I thought so too.
Andrew: All right. We’ll get into how you adjusted it, but you were saying five months from idea to funding and launch, right?
Jim: Yeah.
Andrew: Okay. In the five months you talked to some people, what was the feedback that they gave you on this idea?
Jim: So that was the key. As we were talking about the ideation process, how do you get an idea that you really want to run with? The analogy that I use when I speak to entrepreneurs is the beautiful baby syndrome. We have this tendency to go to our friends and anyone and put our little baby up there and go, “Look at my baby. Isn’t it beautiful?” What are you going to say? Have you ever looked at someone and said, “No, your baby is ugly.” You can’t do that.
You have to go and say, “Look, I know I’m excited about this. I’m a natural salesperson. This is what I do. I need you to put a Fowler filter on and I need you to tell me the truth. You’re not going to help me if you go, ‘Oh, Fowler, I think it’s a good idea,’ and then turn around and go, ‘That sucks.'” You’ve got to be what I call an optimistic realistic. As an entrepreneur, if you’re not an optimist, you will slit your wrists. You have to be an optimist. But you also have to have that realism in there.
So I went to people. There were some people that said, “This is a stupid idea. It will never work,” but a few key people that I really respect, they said, “This is a great idea, Fowler. You should run with this.” And then most importantly I went to an angel investor who I already presented like three or four ideas to. Again, his name is Rick Magnuson. He’s a great guy, super successful. In a very polite way with these other ideas he would say, “Ah, that’s interesting. Yeah.” Super polite. And then he’d ask about my wife. That was kind of the, “This is a stupid idea,” but he was polite about it.
But this one–totally different reaction. Where you really know you’ve got an idea is when you go talk to a money guy and you instantly get them interested. When they start brainstorming–he’s like, “Ooh, Fowler, this is interesting.” And then he started brainstorming with me. He goes, “Okay, here are the steps you’ve got to take to get this thing funded. You’ve got to talk to this guy at Cooley and this guy at Wilson because you’ve got to get incorporated and go talk to these three guys and these three VCs.”
Andrew: Ah, being really specific.
Jim: They’re very specific. These are guys, one of them, Tom Peterson from El Dorado Ventures, he says, “I did a data deal with him. He loves data. He gets it.” So, I knew this was going to happen. When I went in and met with Tom, he’s this great guy. Big, tall, 6’7″ dude. I still love Tom. I just had a great run with him. I spent three minutes. I didn’t have a PowerPoint. I went in and I just said, “Tom, I’ve got an idea. This is ’03. I don’t think anything is getting funded. So I just want to get your advice,” which is by the way one of the most important pieces of advice I will give to entrepreneurs.
There’s a natural reaction that any human gets when you sincerely go to them and say, “Can you give me some advice?” It’s so different than, “I’m trying to fund my company and I need money.” It’s like, “Here’s what I’ve got. What would you do if you were me,” and then listen. I go, “Tom, I need some advice. Here’s what my idea is.” And I will never forget what he said. He said, “Fowler,” at this point at time, he wasn’t calling me Fowler, but everyone does call me by my last name. He goes, “This is the best idea I’ve heard I three years.
Andrew: Wow.
Jim: And I wanted to jump out my skin I was so excited. I had done million dollar deals as a salesman. But I’ll never forget walking out of the thing. I remember the sun shining. It’s so weird that you remember light at certain times. I just remember, “I’m going to get it funded!” There was something in the air. I just knew in my heart that I was going to get this thing funded. And it was true. And he ended up doing the deal, him and the two angels.
Andrew: You ended up with three-quarters of a million dollars in funding in December of ’03. This was after the dotcom bubble burst and no one wanted to touch anymore internet or data ideas or maybe data was a little more interesting then.
Jim: Well, data–nothing was getting funded. As far as I know, and I’m sure this was not the only idea that was funded in ’03, but I’m looking for them. In ’03, you had to have a prototype. You had to have traction and then you have to give away your first born child. It was a tough environment. But there’s a lot of talk about bad environments are great to start companies sometimes. But you give up a lot of percentage. It’s just a risk, right?
Andrew: What percentage did you own of the company at the end?
Jim: I owned 12.5% of the company when it was done. So we raised three rounds of funding, and we raised $18 million total. So it was almost a 10x return for our investors, which I was super proud of.
Andrew: I bet. You called it Jigsaw. I actually did a search to see who owned Jigsaw.com before you. It was a game company, actually random. They did puzzles.
Jim: Spilsbury Toys out of Chicago, Illinois.
Andrew: So did you go to buy the domain right away? Jigsaw.com?
Jim: So we founded the company. Remember the edu-tainment company, that sales training game I was telling you about?
Andrew: Yeah.
Jim: Well, I got excited about that and I came up with a name like Raptor Vision. You know, like raptor, great vision. I thought that’s a super cool game company name. So I bought that domain for $12 or whatever it cost. So we founded the company under that name, although we knew that wasn’t the name we were going to go to market with. But then we went to through the whole naming process, which is hell. It was hell then. It’s hell now. It’s never easy. And then get a domain–that even gets harder.
But we raised $750,000, came up with the name Jigsaw and just said, “Oh, this is it.” By the way, I am a frugal bastard. I really am. I am a big believer in watching your cash and being frugal with your money. So we reached out and said, “Hey, are you guys interested?”
They weren’t using it as their primary domain. It was just if anyone typed in Jigsaw, it would go to Spilsbury.com. I forget the name of the guy. He was really cool. But he goes, “Listen, everyone comes in. They want to buy this. $50,000 and that just shuts everyone up.” And we’re going, “Damn I can’t spend $50,000 out of $750,000 on this.” That’s hellish, but I knew I had to have this name.
So I went to him and said, “Look, how about this? I’m going to raise money, or I’m going to go out of business for the next four or five months.” I said, “How about I pay you $10,000 for an option to buy it.” You retain control. You point it so we can put our website up. You retain control of it until I pay the other $40,000 and if I come up with the other $40,000, you get your $50,000. But if I can’t come up with the $40,000, you keep $10,000 and the domain.” And he’s like, “All right.”
And by the way, one of my ex-CEOs, Eileen Gittins, who’s the CEO of Blurb, she gave me that idea. So Eileen, if you ever watch this, I’m giving you credit on that one. I went to her and said, “Eileen, I’ve got to get this thing, but I don’t know how to do it.” And she says, “Try that.” And it worked perfectly. And of course we got funded and I went to him and said, “Hey,” we didn’t have to pay him for a year. I said, “How much discount will you give me if we pay you early,” which we did So, he gave us a discount to give him cash up front.
Andrew: That’s fantastic, for a site he wasn’t even using at all.
Jim: Well, they were getting some traffic, but it was worth, at that point in time, $50,000. My god, I wonder what Jigsaw would cost today. Holy moly. I should call up Marc Benioff and ask him.
Andrew: It almost isn’t as important today because people are more accepting of non-traditional top-level domains. People are more accepting of non-traditional spelling. Back then it was really important–that you were just Jigsaw and not JigsawData.com even helped a lot.
Jim: Yeah, exactly, Jigsaw Data Corporation. Our technical name was that. I wish we would have just named it Jigsaw. But it’s so funny. The rules–not the rules have changed, but styles have changed a lot.
Andrew: Yeah.
Jim: That’s true.
Andrew: So, you then go and launch your site. I saw the site. Where was it? I got an early version. You know what actually, let me ask you this. Why is it on your current site, on Owler, your robots.txt, do not allow archiving of the site? Is that your intentional doing? It seems like that’s a CEO decision.
Jim: Yeah. It is for us because all of our data is there and people that would compete with us would go crawl it. We allow Google in to do that. But otherwise, we just have competitors that would come in and try to get all of our data.
Andrew: I see. And the whole idea behind the business is competitive intelligence. So, the people who are going to a competitive intelligence site are concerned about data.
Jim: Well, it’s more people that might compete with us at the end of the day, the Dun & Bradstreets of the world, that kind of stuff. Or it’s not those guys, but it’s the smaller guys that will go in and try to grab all your data. You need to open it up for SEO, but if you open it up to anyone, then it gets problematic.
Andrew: So I’m looking at a version of the site from 2004. It’s very basic.
Jim: On a lexer or something like that.
Andrew: Yeah. The good thing about you is because of the target audience that you have, people were very vocal about Jigsaw from the beginning. Because of the business model, they were very vocal. It’s easy to do research on you unlike other companies that I have on. But yeah, I can see the early version of the site is all shifted over to the left of the screen, to the top of the screen, that’s the way sites used to be.
What’s interesting is that you already had 68,000 IT contacts, 28,000 director-level contacts. How did you get so many contacts in your system? How did you get people to participate in this when at the time people were very protective of their data?
Jim: Oh, they were, my goodness. Of course, at that point in time, privacy, even around this kind of data was a huge issue. Now it’s a non-issue for the most part. But at the time, as you well know, you probably–
Andrew: Yeah. I was there. I remember. I was shocked, frankly, when I first saw it, I was shocked. I can’t say all those people didn’t get it. They were too slow. I was shocked that it was available.
Jim: Yeah.
Andrew: How did you get so many people to add their data?
Jim: So, any crowdsourcing site always has a chicken and egg problem. Let’s take Wikipedia as a great example. It has to start somewhere. When you first start, there’s nothing there. So, who’s going to really care? But the growth accelerates exponentially over time.
But I remember it took us–so, we founded in December of ’03. It was Thanksgiving weekend of ’04. We had raised our series B. We had raised $5.2 million that September–we had closed in that September–from Jeff Crowe at Norwest Venture Partners. We crossed 100,000 contacts. We were so excited. That was a big number. But the way that we started was I was a sales guy. My cofounder, Garth Moulton was a sales guy.
So, the first thing we did was we took all of our contacts and we cleaned them up. But the problem–we made a really lucky early decision that we would not allow partial contacts on our system. You’ve got to realize that if I were to look at your Rolodex right now–I’m so dating myself. I’m sure a lot of young listeners that are listening to this are going, “What the hell is a rolodex?”
But if you were to look at your contacts that you have, however you manage them, the huge majority of that data is going to be incomplete. You’re not going to have a phone number or you’re not going to have an email or certainly not an address.
Andrew: Right. For some people I have just phone numbers, for others just email addresses and very few I have both. So, why did you decide to not accept partial if that’s the way data was already set up?
Jim: Our basic model was if you give us one, we will give you one. Well, when you start saying–and here’s another funny thing. El Dorado had this guy that was Russian who was really cool, really smart, an engineer. Remember, I was a sales guy. So what I didn’t know was how to build a product or hire engineers or anything at that point in time.
So this guy came in and was helping us out as a consultant. I remember going, “Well, we’re thinking about this model where each field is worth one point and a whole record would be five points.” And in a really thick Russian accent he goes, “Jim, we have a saying in engineering land, ugly airplanes don’t fly. This is an ugly airplane.” I remember just going, “Dude, you’re right.”
So I said, “All right, we have to make a really hard decision. We just need to make this simple. You give us one full contact record. We will give you one full contact record.” What it meant was the number of records was going to be much smaller. At that point in time, size mattered. It still does, “Well, we’ve got…”
Andrew: Yeah.
Jim: ZoomInfo, by the way, which at that point in time was called Elion, they had millions. But it ended up being the most important strategic decision that we ever made, and it was pure luck. It was just because it was an ugly airplane, we couldn’t figure out an easy way, but we said you have to be complete.
So we went and we cobbled together everything and then of course we put engineers on saying–well, most everything doesn’t have an address, but that was pretty easy because you could go get the company address and we could crawl for that and we could cobble that together. The most important fields, of course, were name, title, email address and direct dial phone number. That’s what no one had. And then we cobbled it together.
And then I called in favors to every single friend I had out there. Andrew, this was the part that was a real eye opener and I remember being pissed off about. There were people that I had helped, I had hired, I had done a lot for them and I just went to all of them and said, “I need your help. Don’t give me anything that you’re imminent,” The reality is most people have all these old contacts that are there. “Don’t give me the ones where you’re in a deal right now. But I’m calling in favors.” And I was amazed at how many people that I had done big favors for in the past did not reciprocate. I remember being a bit pissed off about that.
Andrew: I bet. You still remember some that should have but didn’t.
Jim: I do. I remember one in particular. He came back after Jigsaw was a big success and wanted to do some business and I just said, “Dude, no.” He’s like, “Really?” And I’m like, “Here’s why. When I needed you, you weren’t there. No.”
Andrew: So, you know what? I see how you were the guy who came up with the idea, which is not an easy thing. You made sure that the plane was pretty and not ugly, that it made sense. Sorry?
Jim: I’m not going to say it was pretty, but let’s just say it wasn’t ugly. How about that?
Andrew: The model made sense. You could communicate it easily to somebody who was flying through the internet and trying to understand what you were without much of interest in you. I see how you got your friends to add information in there. What I’m curious about is who’s the person who developed the site? Who’s the person who wrote the code?
Jim: Sure. Let me give a couple of kudos here. My cofounder, Garth Moulton, he did better than anyone else about going in and roping in data. Maybe he’s just better at calling favors in than I was. But there was a fundamental one that he had a good friend who was a woman salesperson. She had been selling security software, and she was moving companies to a different vertical out of security. But at that point in time, security was hot.
She gave us 5,000 really fantastic contacts that immediately kind of gave us a mini-critical mass in security. All of a sudden, when put that data up, all of a sudden all these security software sales people were coming in and signing up for Jigsaw and contributing. So, Garth really helped us kind of get out of that first critical mass and got us the 20,000 records.
Andrew: And all the people had to type in the 20,000 records? You didn’t have card scanning software, did you?
Jim: No. It was so ugly at the time, Andrew. Yeah. We literally made people type it in. What we made people do with it early, I shudder. You could never get–
Andrew: It wasn’t even, “Upload all your data and we’ll clean it up for you.” It was, “Type it.”
Jim: Put it in one by one. Granted, a couple years into it, we had gotten a lot better. We still hadn’t had card scanning. Now that’s easy to do or comparatively easy. But at the time, it was ugly about what we made people do. I just can’t believe it. It’s a testament to how much they needed the data that they would go through the pain.
Andrew: Look at this. I just happened to pull up Garth Moulton’s contact information and I see that at one point he was working at ScanBizCards, which is a business designed to solve this exact problem we’re talking about.
Jim: Exactly. The company is now called CircleBack. I’m good friends with their CEO. Garth is no longer there, but he was there for a long time. Garth knows the space, of course.
Andrew: He left 2014, it looks like, according to LinkedIn. You know what? I’m sorry, Jim. I just made a mistake. I forgot to say to the audience one of the most important things that I’ve got to do. My job is to promote my sponsor. Actually, my job is to do a good job for my audience and help them learn from my entrepreneurs.
But I forgot to tell you guys if you have an idea of your own, my sponsor, HostGator, will host it for you on their website. They have tools to make it so easy to both get your site up and running and keep it up and running. In fact, if you want to install WordPress, if you want to turn your site into a shopping experience, if you want to turn your site into a forum, they have software that makes it super easy for you to get up and running.
HostGator.com–take your idea out of your head, go to HostGator.com/Mixergy so you can get a big discount on hosting and for just a few bucks a month, they will turn your idea into a full website that you can start showing to people and saying, “Here’s my idea, what do you think?” That you can start taking out to customers and bringing them in, that you can, frankly, if you’re not ready to show it to anyone, just play around with it at night while everyone else has gone to sleep or it’s 7:00 in the morning when you’re just fiddling around trying to see where this idea goes. Don’t put the idea down in paper. Don’t out it in Evernote. Don’t put it down in your iPad, put it on the web by just getting your site up.
I really like HostGator for doing it, not just because they make it so easy to get started, not just because if you go to HostGator.com/Mixergy they’ll give you a huge 30 percent discount, but because if you ever have any trouble, they have a phone number with a real human being that you can get in touch with within minutes. Their support is fantastic. I’ve never seen a hosting company with their kind of support and their up time. They will keep your site running from the beginning all the way to when you are growing and huge and maybe even have a need to call tech support. Go to HostGator.com/Mixergy.
Jim, you’re a salesperson. What did you think of the way that I promoted my sponsor?
Jim: I think they’re going to be thrilled. I think you did a fantastic job, Andrew.
Andrew: I hope so. You know what, though? I waited 30 minutes. I got so engrossed in your conversation that I forgot about HostGator.
Jim: Better late than never, I think.
Andrew: Sorry?
Jim: Better late than never.
Andrew: Better late than never. Maybe if we’re playing around with it at different positions in the interview, then they’ll get their value. Frankly, if they’re not happy with it, I’ll make up for it. I love HostGator. I love my sponsors. I want to make sure that they’re all happy.
Then the next big thing that allowed you to bring in more people is this article in The New York Times. Check out this headline, “A Service that Aims to Make Cold Calls a Bit Warmer.” How great is that headline?
Jim: Oh man, that was a writer named–
Andrew: Daniel Terdiman.
Jim: Terdiman, yeah. He was a great guy. That was our first big break. We got so many signups on that day that it almost brought our site down. But that was huge. That was thrilling. You just don’t get that kind of press. Well, Uber gets it and other folks. But small startups getting in the New York Times these days, it just doesn’t really happen anymore.
Andrew: Not like that. Every part of it is fantastic. Even the photo that you’ve got of yourself in there looks really professional. It makes you look good. It makes your company look like someone I’d want to do business with. It explains the business model in a way that makes people understand–it’s basically an ad without being an ad. They even understood that your competitors who weren’t that clear at the time were LinkedIn. They also said Rise. That’s why I brought them up earlier in the conversation. What I’m curious about is how did you get such great coverage. What happened?
Jim: Yeah. We hired a PR firm named the Antenna Group. It was a big risk, but they did it. It was their relationship. Time, chance and circumstance–they introduced me to Daniel and he ended up liking the story, pitched it to his editors. It was great. They sent out a photographer and actually a picture of me in the office. That’s the picture you’re looking at. Being an entrepreneur is a tough job. I really believe that you’ve got to be able to [inaudible 00:38:18] same day, be able to think, “Oh my god, [inaudible 00:38:24]… This thing is a house of cards and it’s going to [inaudible 00:38:37] or we’re dead.”
Andrew: Why don’t we go to one of the biggest challenges? I didn’t expect this, but you told April, our producer, that one of the biggest challenges of the business was when Michael Arrington at TechCrunch really attacked Jigsaw.
Jim: Yeah.
Andrew: I remember.
Jim: Yeah. That happened after The New York Times. The New York Times kind of put us on the map. I can’t remember exactly the article, but they did bring up a little bit of the privacy issue. Everyone’s got to reel back to 2004, 2005 and privacy was a much bigger issue at that point in time. And Arrington really had a cow about Jigsaw, to put it mildly.
By the way, I’ll say it publicly–Arrington is a dick. He was such a jerk about it. You have to have a thick skin as an entrepreneur. And Rafe Needleman wrote an article that was scathing about Jigsaw and he was a perfect gentleman. It’s like I think he even said, “Fowler is a nice guy, but I don’t like his business model. I find it…” I forget what word he used, maybe creepy or something like that. I have no problem with a journalist having an issue about it.
Arrington lied. He sat there and said in his article, “Well, I tried to contact the company three times and they never got back to me.” In the comments in that thing, I put a comment and said, “Here are my two emails in response to you,” basically calling him out as a liar. He was just a complete jerk about it in terms of the way that he did it. It was irrational. And of course now it was much ado about nothing. Now, the good news is it was one of the most read articles and one of the most commented articles he ever did and all of that. But anyway, I just wanted to put that.
Andrew: Did it get you more users?
Jim: Well, P.T. Barnum was famous for, “I don’t care what you write about me, just spell my name right.” So I would say there’s no question that it did. A few privacy people got freaked about it, but for the most part, a bunch of salespeople went, “Wow, there must be some good shizzle on there if everyone’s having a cow about it.”
Andrew: But it wasn’t a milestone as far as traffic, users, nothing like that.
Jim: At that point in time, we were just starting to grow pretty dramatically. Certainly that was a huge day. There’s no doubt about it. Not as much as The New York Times because The New York Times just had a lot bigger, broader reach at that point in time. Everyone read it at that time and it got syndicated.
Andrew: You know, the comments, I know you jumped in there. I know others had. I think even Michael Arrington jumped in there. Those are all gone now. It’s so sad where those people who were tech celebrities really interacted with the TechCrunch articles, especially in the comments, they were really good and they just disappeared because TechCrunch switched from one commenting system to another, to another and all that stuff is gone.
Jim: Yeah. It’s really too bad because they were funny. There was a bunch of crazy stuff. There were flame wars going on. It was pretty hilarious. People got on there and just hammered on Arrington.
Andrew: Who did?
Jim: A bunch of our users. A bunch of our community and just thrashed Arrington. It was pretty funny.
Andrew: I couldn’t find it, but I do remember. You said Guy Kawasaki came to your defense a little bit, right?
Jim: Yeah. So what happened was we’d also gotten a short article in The Wall Street Journal. You know how they do those little dot head pictures? Well, someone had commented on Arrington’s deal that, “Hey, here’s another article about Fowler in Wall Street Journal. Look, he kind of looks like Dr. Evil.” I’m guessing it’s my bald head. Having fun with it, Guy interviewed me. We went out and had lunch. He labeled his post, “Ten Questions with Dr. Evil.” Basically he was kind of poking Arrington in the eye a little bit, which was pretty funny.
Andrew: Isn’t that the one where, at the end of the article–boy, it’s been years–but I think at the end of the article he said, “How do I feel about it? Well, I think there’s some data issues or some privacy issues, but I would be very upset if all of my sales people didn’t use it,” right?
Jim: I can’t believe you remember that level of detail, Andrew. Amazing. Yeah. Exactly what he said. And then the funniest part was someone commented on his post and said, “This is a much ado about nothing.” He goes, “In five years, Fowler is going to look more like Dr. Seuss than Dr. Evil because no one is going to care about this.” It was so true.
Once social networking really went out there and once everyone realized that we didn’t touch any kind of personal data, like mobile numbers were not allowed in our system, we actually actively filtered them out. We didn’t allow any non-business email, like a Gmail or Yahoo couldn’t be in there because we couldn’t determine that it was for sure a business email address. We didn’t even let it in the system.
Andrew: I show my members exactly how to find it. If anyone wants to be an interviewer and needs to know how to contact people, I show them in five seconds how they can get not your work email, Jim, but your personal Gmail. It’s so freaking easy. Anyone who wants to do it can go to product hunt, where they just list all the latest products, type in email or email search and you find like 20 different programs for finding people’s email addresses like that.
It’s a non-issue. I feel like I should be up in arms and it is an issue, but nothing happened in the world. People aren’t flooding my inbox just because they could get my contact information off of Jigsaw or any other site. It’s shocking, actually, that the world moved like this, but it did.
Jim: Yeah. Well, it was a classic case of pioneers take the arrows, right? To this day, I go, “Look, sales people have to do a really hard job. They’ve got to go contact people they don’t know and ask for money.” That’s basically what they’re doing. There’s a lot of hopeful elegance in between those two things, but that’s the reality. It’s hard. You can’t do it unless you can contact them.
Andrew: Another challenge–again, this I wouldn’t have thought would be a big challenge–but you hired a part time marketer and he had 1,000 members on an email and didn’t include them in the BCC line and instead put them in the to line and as a result, everyone got to see each other’s contact information. Why was that such an issue for you?
Jim: Oh, yeah. I was getting asked, “What are the lowest moments of Jigsaw?” and that was early, early on. We had literally just raised our first series A, that $750,000. We were just getting started. Maybe it was actually right after we had raised our B. I can’t remember. We had 1,000 active members. That’s what it was.
Our marketer, our part time marketer at that point in time, on accident sent a communication from us in Outlook in the to line instead of the BCC line. It started a flame war. Basically people were saying, “Great job, Jigsaw. DOA. You’ve just ruined it. You’ve lost all our trust.” People were then go, “Well, since they’re spamming. Here’s our company. Please buy.”
Andrew: Oh, I see. Right. Then everyone else says, “As long as they’re spamming me, I hit reply and I email all of you.” I see. So, I could see why some people would be upset. At the time, it feels like what?
Jim: Well, at the time–so, I had a guy, he was an attorney by trade, but he was kind of helping us on all the different areas. I remember there’s an old saying that you should never take business advice from an accountant or an attorney because they’re designed to find problems, not solutions. I think there’s some truth to that. I’m good friends with this guy. If you ever listen to this, he’ll remember this because he said, “Jim, don’t respond to this.” And I remember going, “No. I’m going to.”
And what I did was I just immediately got on. I spent ten minutes while this flame is just getting hotter and hotter and I just wrote out an email. I can’t remember exactly what I said, but it was something to the effect of, “Dear Jigsaw members, about an hour ago, we sent an email with everyone’s name in the to line. I need to first of all apologize profusely. This was an egregious mistake. It’s my fault. What’s happening now is that everyone is flaming each other. I need to ask you to please not do this.” I think I used the words, “If you’re pissed off about this, and you have every right to be, here’s my direct email and here’s my mobile number. Call me up and bitch me out, but please stop.”
The second I did that I was like throwing a huge bucket of water on this fire. In fact, I got about 20 people that emailed me and they go, “Great email. Way to stand up and take responsibility. My company did that once.” And it was just over.
So, the main point is I just think that my advice is when you screw up, just jump on that grenade hard and fast. Let it hurt and get it past you because the longer you’ve let that fire burn, the hotter it’s going to get. That was a really–I think a lot of our company culture and personality was defined that day. But it was scary.
The first time I saw it, my blood went cold and I thought, “Oh man…” I had to call up–actually, I remember now, it was Jeff Crowe who had just invested $5.2 million in us and say, “Jeff, we just really screwed up. Be ready for some blow back.” You do not want to make those calls as an entrepreneur.
Andrew: And what did he say? Do you remember?
Jim: He was a stud. My whole board–I had a fantastic board. I was really lucky. That’s another piece of advice I’ll give to your listeners. Choose your board with extreme caution. You can fire all your other problems but you cannot fire your investors. Make sure that you want to work with these people and that they’re going to be with you when it gets rough and hot in the kitchen as well when it’s going well.
He was awesome. He just said, “Keep me posted. It sounds like you’re doing all the right things. Let me know if I can help.” You just get through it. You’ve got to keep them posted on what’s going on. You can’t let them find out bad news from someone else. That’s going to be painful.
Andrew: The business model changed. You said you discovered that data was not the model–how do you explain it? Selling the data to marketers. Is that what it was?
Jim: So, basically there were a couple of really big changes that occurred. Number one, I talked my ex-boss, Kevin Akeroyd into coming in and being COO of the company. That was transformative. Kevin is one of the most talented guys I’ve ever worked with, just a pleasure to work with as well. We’re close fired to this day. He came in and really made the team believe that we could go do literally million-dollar deals selling our entire data set to big Fortune 500 companies And he did those. He did the first few of those deals himself and then taught the team how to do that.
Andrew: What was the data that he was selling to companies in the beginning?
Jim: So the other thing that you’ll learn about compiling data. When you do it better than anyone else–and that’s really the name of the game and the business information or any data business in my opinion–you need to be able to compile a set of data that you clearly can do better than anyone else and prove that. It has to have value, of course.
So, what always amazed me though are ways people found to use our data in ways we never would have expected. For instance, some use cases, not by the big companies but ways that we never thought would happen is people started using Jigsaw to resolve customer issues. Like one user–and we’d only learn about it because they’d blog about it or they’d post it somewhere.
One of our users, British Airways lost their bags. It was just a cluster. So they literally go onto Jigsaw and get the CEO of British Airways email, email him and he, of course, responds right away. Another person was having some sort of internet connector issue at home. They actually used Jigsaw to get some marketers from–I forget who it was. It was one of the Bellsouth or something like that, back when it existed–and basically communicate with marketers to say, “Hey, I’ve got this problem.” Marketers actually gave a crap. So, they resolved the issue. It was all these weird things.
So, one big Fortune 500 company that I was legally bound not to mention at that point in time. It’s New York-based and it’s a huge one. They had 150 PhD data scientists on staff. We have one. We basically did a million-plus dollar deal with those guys where they literally got access to our API. They could use our data for anything they wanted to except to resell it. What they used that data for, we still don’t know. But you start doing a lot of different algorithmic work with data like this.
Andrew: What kind of things could somebody want to do with it? It’s not like they need it for a mailing list. They could buy a mailing list anywhere else and you didn’t have the addresses. What’s a use that you can talk about?
Jim: Marketing is mostly what they would use it for. But I think also they were doing–
Andrew: It’s mostly marketing mailing lists to enhance the data they already had so they know more about the people they’re mailing?
Jim: Yeah. These big companies, they’ve got this data sitting in all these different systems. Ours was complete. So, I think what they were using is we were the primary record and then they were going in and doing all their own data work to complete those records. For them, they had all these legacy systems. It wasn’t like they were all using Salesforce at that time where you’ve got this one cloud-based product. They had CRM systems for different teams all over the world. They would use us to go clean every one of them separately, as an example.
Andrew: So, how did you build all this if you’re not a developer yourself? You don’t have a technical background. How did you get the first versions built?
Jim: Yeah. So I went out and hired a couple of guys that I had worked with at a previous startup where I was VP of sales and they were the backbone of it. The first guy was [inaudible 00:52:45], was one and another guy was Rajan Madhavan, who’s my cofounder at Owler. Another guy was a guy named [inaudible 00:52:49].
We had all worked together at this company called TightLink. They were the first three guys. All the credit goes to them. We’ve gotten a couple patents for Jigsaw. Their names are on the patent. They were just studs. They built us a great early product and we just kept going from there. I was lucky to have some guys that worked really hard and were really smart.
Andrew: Alright. There are so many other things that we can talk about that you’ve built up. I wanted to ask you about AddressGrabber I wanted to ask you about how to add–you guys made it easy to add contacts from Outlook. You synced up with Salesforce. But I guess what we should do to just wrap up this part of the story and then get to Owler is why did you sell? Things were going well? Why sell?
Jim: So, it was really funny. We actually almost got bought by another company before Salesforce. That deal fell apart at the end of ’08.
Andrew: Because?
Jim: What’s that?
Andrew: Why?
Jim: Because it was November of ’08 and the whole world was going to hell in a handbasket. I’ll never forget–just a quick anecdotal story about this–I live in Northern California. My son was eight years old. I come home. I called my wife and said, “Hey,” because we got a letter from this company. It was nothing binding, but it just said, “We want to buy your company for $100 million.”
I came home and I said, “Hey, did you tell our son this?” She goes, “No, you tell him.” I said, “Hey, buddy. Come over here.” And he’s like, “What Dad?” He knew something was going on. I go, “Something really important happened at work today.” He’s like, “What Dad?” And I go, “Another company offered to buy Jigsaw for $100 million.” And he gets a serious look on his little face and he looks up at me and he goes, “You should ask for more.”
Andrew: Wow.
Jim: I was so proud of my son. I was like, “Yes, I’ve got my genes.” But that was just a side note that was just really funny. And thank god that deal broke, by the way. It was more than that, but the deal broke. We got bought for a lot more money by Salesforce just about a year later. It was a really tough decision.
I think for me, I always had the mindset that–I talked to me team and my board about it–I said, “Guys, the day I’m not the right guy to run this company, I’ll be the first one hopefully to raise my hand. But if I haven’t raised my hand…” We’re here to build a great company. I really believed that we could have taken Jigsaw public. I didn’t have the desire to run a public company? Jigsaw, we got a great offer and Salesforce is a fantastic acquirer and it’s life-changing.
Andrew: How did you come across Salesforce?
Jim: Well, I’m going to give Kevin Akeroyd, my COO, the huge lion share of that. I’ll be honest, I didn’t think Salesforce–they cheap up to that point. They had never spent more than $30 million. I just didn’t believe they were going to pay the kind of money that we would need in order to sell the company to them. But Kevin is like, “No, no, no.” So, basically Kevin did. They were also a customer. We were a customer of them, but they were actually using Jigsaw, so they knew it well. They wanted to get into the data space. Of course, now what used to be called Jigsaw is now Data.com.
Andrew: Does it redirect? I thought it did. But it didn’t today. Jigsaw.com… Yeah, it does. It takes to Connect.Data.com.
Jim: Yeah. Exactly. Marc is always great at–best marketer I’ve ever seen in my life. I think Data.com is a fantastic–I miss Jigsaw as a name. But I’m also a big believer that when you sell your company, you don’t get to bitch and moan about what color they paint the walls. I have to say, though, that Data.com, it was published what he spent for it. I think was something on the order of $5 million for Data.com.
Andrew: For the domain.
Jim: Yes, for the domain alone. It’s a fantastic name. Marc knows how to think and position big. Hats off to that guy.
Andrew: Yeah.
Jim: Also, by the way, to answer your other question why did I sell–I remember sitting alone in Marc’s office one day and he looks at me and he goes, “Jim, Jigsaw is not your last deal. This is going to put you in a position where you go do your next big one.” I remember thinking, “You’re right.” I’m an idea guy. I like to come up with ideas. I know I’m going to do another one. So, I had no regrets at all.
Andrew: What was the best part about selling?
Jim: Lawyers and investment bankers, they slowly build up their wealth over time. Entrepreneurs, it doesn’t happen that way. It wasn’t like I was poor. I had been a VP of sales. Living in the Silicon Valley, my wife was a stay at home mom. You’re surviving. It’s fine. It wasn’t like if it failed my kid wasn’t going to go to college or anything. But you’re not really putting away a lot of money. And then overnight, all of a sudden a bunch of jack shows up in your account. First of all, it’s really stressful. Let me just tell you right now.
Andrew: Why? The day that you see it in your account, did you go to the bank or go online and see it all in there?
Jim: You look at it and go, “Holy shit. It’s really freaky.” The thing that I’ll say is first of all, I think, what was I, 38? 38 years of habit don’t go away overnight. I remember what we did. I still drive–I drive a VW Jetta and I refused to get a new car for a while. I drove my old shitty Prius because I just didn’t want to be that guy, right?
But I remember we went down to the mall in San Mateo, California and my son and my wife both got an Apple laptop and then we went over to the Zumiez store and we bought a couple of longboard skateboards–my son was 8 or 9 then–and I remember we walked out and my son was just, “This is the best day ever!” He was so excited. You kind of feel like that big hunter. You just brought in this big beast.
Andrew: Yeah.
Jim: I want to be super clear, Andrew. I’m not just paying lip service to this. It was a team. As the CEO, you’re going to take all the good and all the bad. You get way more credit than you deserve and, to be honest, a lot of times you get way more blame than you deserve when it doesn’t go well. But it’s a team effort for these things. We had a fantastic team.
Andrew: I remember you guys went to celebrate too? Let me see it in my notes. You took off to Napa?
Jim: My god. Forget how you get all this data. But anyway, yeah, we did this great trip. Before we sold, my CFO, Steve Klei, who’s another world class, amazingly great guy. He’s the CFO at Kabam right now, which is an amazing game company. Steve was the one that said, “Hey, by the way, we need to agree with Salesforce before we even sign the papers that we need to have this much money that we get to go and do a big celebration.” We took the whole team up to Napa. It was killer. Those are fun, fun, fun times. They really are. That’s the celebration feast. You’ve got to do it.
Andrew: So, I want to spend a little time talking about Owler. I know we’re over time. Let’s just talk about what the original idea was. I know it’s evolved a little bit over time.
Jim: Yeah. So, basically Jigsaw, you think about company profile information. It’s a requirement to do business. Jigsaw was just one small part, a very important part of it. But contact data, we always had basic account data. When I mean basic–address, industry and address–we had to have a way to organize those contacts. If you were looking for someone at Cisco, we had to have at least basic information about the company Cisco so that you could go look for them there.
Andrew: Right. You mentioned earlier that you didn’t need me to add in the address of someone who worked at Cisco. You would go and pull that information because you crawled that.
Jim: Exactly or we use area codes. There were a whole bunch of things on the phone number that we would do to say, “They have an address here.” There are a lot of ways you can get that data, right? But there’s a much bigger market there for this business contact data.
Let’s just take a company like Dun & Bradstreet, who I’ll go on record and say–Dun & Bradstreet has had a long, storied career being a leader in the business and information space. But they are an un-innovative company that I used to call a dinosaur back in the Jigsaw days and I’ll say it again. The only thing that surprises me is that their rate of innovation has even slowed. I’m calling them out because they’re a great company and all startups call out big companies.
But I believe that these large data companies, they don’t have any innovation in them and the whole data industry is just crying out for a way to do it. It wasn’t that there was a lot of unfinished business with Jigsaw, it’s just that when we got bought by Salesforce, we had owned contacts at that point in time and we were starting to turn our focus onto the account data. Luckily for Dun & Bradstreet, Jigsaw got taken out before we could do that. Well, now Owler is really going after those crown jewels.
What we do for users is we send them not only news and alerts about their competitors, but more importantly, these really awesome competitive intelligence reports. What you do is you come in and say, “Hey, this is my company,” and then we right away show you what our community believes it he competitive set. You go, “No, these are my top three.” Right now they have the best competitor data in existence. If you need to know what company it competes with, I’ll argue that we have the best data now because we’ve had many thousands of people that have done that.
But then what we do is we start sending you news and alerts on these guys. But more importantly every week we send you a competitive intelligence report that shows you versus these competitors.
Andrew: In what way?
Jim: What’s that?
Andrew: In what way? Shows me against them…
Jim: Let me just give you a couple of examples. We’ll show you what the community believes is estimated revenue of both your company and competitors. We’ll look at things like who’s the bloggiest. RSS feeds are part of the company profile. Well, I’m going to ask you–do you really have time? You’re a super data guy, I can see. You’re great at info. But most people are a bit lazy. If I were to go to your listeners and say, “Do you really read your competitors’ blogs posts?”
Andrew: You know what? I’ll be honest. I don’t even do that. I do it because you and I are talking and if I don’t have all this information at my fingertips, then I’m in trouble. Frankly, the reason I knew about Guy Kawasaki is because, what, ten years ago I happen to have read that blog post and I knew it. I live and breathe that stuff. But my competitors I don’t live and breathe in the same say, not in the same way that I care about my customers, for example. I’ll read their blog posts.
Jim: So, one of our weekly competitive intelligence reports, and it’s just one of many, is who’s the bloggiest? And what we’ll do is we’ll sit there and go, “Okay, in the last quarter,” these are quarterly reports, “Here’s who did the most blog posts.” So, that tells just you right away who’s blogging. But then what we do is we just take the headlines of these blogs and list them so you can scan them. If you want to read any one of them, you can do it. But it’s information at your fingertips. It’s the same thing with all the news. We do things on social, like we track who’s got the most social followers. It’s just a way of looking at it. We do another one, CEO rating. So, all the CEOs get rated in our system. So, we see not only how the CEO ratings versus you and versus your competitors, but how they’ve been going for the last year. But these are just examples.
Andrew: Why do you do it all for free? It’s free, right?
Jim: What happens is our users touch that data. Remember that Jigsaw story. What we learned–in fact, if I ever had Jigsaw to do all over again, what I would have said is, “You cannot come in and buy a business card for $1. You can only get a business card by adding data.” We ended up getting to about $500,000 per year in that individual subscription revenue. One deal with a big company was over $1 million. You think about the engineering time and the marketing time that it took to crank that $25 a month. It wasn’t worth the time.
Andrew: I see.
Jim: The value that the individuals give us is not money. It’s data. Our data, it’s a crowdsource model. So, what we know is when we get ten votes on revenue, it’s awesome. We have the best revenue out there because it’s statistically relevant now. Make sense?
Andrew: Yeah. It does. It does. Absolutely. As opposed to like Dun & Bradstreet, especially smaller companies, I can call them up and say I have anything, right? They’re pretty easy to game.
Jim: And not only that, but they only give that revenue in a range.
Andrew: Right. And the range for some companies makes no sense.
Jim: Not only that, I’m going to go on record and I know every one of your listeners will agree, their data on private companies sucks. But it’s the best available or it has mentally been up to this point. I’m going to argue with have the best competitive information across the board for what we’ve got. I’d say it’s equal and we’re about to, I think, just blow by them as our community grows quickly.
Andrew: You know what, I take it back. You do have a paid version, right? The version that allows me to see revenue I have to pay for.
Jim: No. you just have to sign up.
Andrew: Oh, developers have to pay for that.
Jim: Yeah.
Andrew: Got it.
Jim: Actually, we’re lucky. We raised $20 million for this. We have the luxury we did not have at Jigsaw. LinkedIn had this luxury as well. We don’t have to drive revenue. We raised $17.2 million in 2012. We still have $12 million of that left. We’ve got a lot of dried powder. We don’t have to go drive revenue yet. We’re really getting our compilation–that’s really where the value is. But we’ll be selling data off of our API just like we did at Jigsaw. We know it has value.
Andrew: I see. That’s why if I go to Developers.Owler.com, I do see the pricing, but not if I’m a real user, a regular user, I should say.
Jim: Exactly.
Andrew: Alright. That sounds like a really great idea. I’m so glad that I talked to you with a background of understanding what went on at Jigsaw because then it helps me understand what’s up with Owler and why Owler makes so much sense. I’ve hunted through it. I’ve read the blog posts, including the one with Snoop Dog doing a dance, which I like because I’m going to use it for something. I don’t know for what. But now that I understand the business model behind it, it makes so much more sense.
Jim: Yeah. Yeah. We had a pivot, by the way. We originally founded the company as InfoArmy and that compilation model failed, which by the way was a super painful exercise.
Andrew: Why did it? Actually, I’ve got it here in my notes, but I can’t even go to InfoArmy.
Jim: Yeah. Well, that’s because it actually should just redirect to Owler.
Andrew: It does.
Jim: Yeah. Exactly. It was the same company. It’s just we changed the name and pivoted. So, it just was a compilation model. At the end of the day, we were trying to recruit an army of global researchers to complete the same exact set of data, it’s just people, when we put that data out there, no one believed what two independent researchers had to say.
The first question they had was, “How do we know that this revenue data is correct?” We said, “Well, it’s never correct.” And they go, “Why would these guys know better than anyone else? Are they insiders?” And we said, “No, that’s illegal.” That’s when realized we needed to go to more of a crowdsource model where we had multiple people giving this estimate and then that gives you a much better view of what the actual revenue would be.
Andrew: I see. So, a crowdsource models makes more sense than two independent researchers who are just Googling.
Jim: What happened was we had just raised a bunch of money. We were able to accelerate that model. We had a lot of traction on it. I went back to my investors and said, “I haven’t spent a penny for your money yet.” We still had $2 million in family money that we had originally investing. I said, “Guys, I’m going to do one of two things. I’m going to hand you back every penny of the money you invested or we’re going to pivot.” And of course my board was awesome and said, “Giddy up. Let’s go.” Very few business models survive in the original form. Even Jigsaw morphed in terms of how we monetized.
Andrew: Yeah. And look at this. I’m looking at a TechCrunch article on this change. The headline is “InfoArmy Retreats After Crowdsource Research Business Goes Through the Floor,” and then they also say that all the reports are free. But your quote in there is, “We got a bunch of researchers to work on this and it was a 50/50 share, but it ended up not working. The critical thing is that we’re looking at a much more crowdsourcing-like model. I remain a 100 percent believer on it.” So, it’s not that the crowdsourcing went through the floor. It’s that you were doubling down on it.
Jim: Well, it was actually that was a crowdsourcing model that didn’t work. It wasn’t because of the researchers, it was because of our model. It was our fault. The problem was that the market didn’t believe that a junior and a senior researcher that didn’t have any inside information could give good estimates on certain things. So, that’s where Owler now is completely free. That we actually charge for these reports.
So, we would charge different prices, but I think $199 is what went to market with. The researcher would get half and we would get half. But when they bought it, they said, “We won’t buy again. This data is not good enough.” So, we said, “Well, let’s make it free and get more and then sell the data at the back end.” Now we’re getting a lot of traction, which is great.
Andrew: Is it true that the company is called Owler because of your last name, Fowler?
Jim: It is true. I was a little embarrassed about it when my marketer–I went and said, “Guys, we’re going to rename the company. We need to make a clean break with our old model.” And my marketer, Janet Lavine, came in one day because she was on it for this and she goes, “I’ve got the perfect name, Fowler.” And I go, “What?” She’s like, “Owler.” And I laughed and said, “Good one, Janet.” She’s like, “No, I’m serious.”
Andrew: Easy to spell.
Jim: Yeah. And not only that, but it’s the wise owl. In fact, most people don’t even make the connection except when I stand up on stage and go, “Hi, I’m Fowler from Owler.” They get it there. But I love it now. It’s funny. I love the owl and the wisdom side of it. And the domain only cost us $10,000 by the way. It was owned by this English woman and she goes, “No, many people have asked me to do it.” And we go, “Well, would $10,000 change your mind?” Like a day later she goes, “Yes, it would.” But we had raised a lot more money. I didn’t have to do any special deals. We just wrote her a check and took it with glee.
Andrew: No payment plan.
Jim: No payment plan on that one. That one was straight up check.
Andrew: Alright. Well, thank you so much for coming here and talking about your business. Frankly, you’re so freaking open. I love hearing that. I love sharing the excitement of how you came up with the business idea, of how your son reacted to the skateboard that you got him afterwards and everything in between.
Jim: Yeah, definitely.
Andrew: It’s so good to have you on here.
Jim: Being an entrepreneur is the best job in the world, Andrew. We know that. It’s hard. It’s a hard job. But it’s the best job in the world. So, it’s my pleasure, man. I really enjoyed the interview and I hope your listeners enjoy it as well.
Andrew: I’m sure they will. If you do, guys, I want you to know that you can subscribe to Mixergy in any podcast program you like, just type in Mixergy and all the latest interviews will jump right into your phone or your–I know a lot of people are on Apple TV or Chrome or whatever it is you’re into, we will be right there and you will get all the latest ones for free automatically.
And if you like this interview, please give me a review. I like to read those. I like to see what you guys think. All you have to do is go to, frankly, the best store for me, the one that gives me the most juice, that one that gets more people to pay attention to these interviews, the iTunes store. So, if you like this interview, in the iTunes store, please give me a review.
Thank you all for being a part of it and Jim Fowler from Owler, thank you for being here.
Jim: My pleasure, Andrew. Thank you.
Andrew: Thanks, everyone.
