Crunchbase CEO Jager McConnell

Auren Hoffman (@auren) (00:00.93) Hello, fellow data. My guest today is Jager McConnell. Jager is the CEO of Crunchbase, which he's led since it spun out of AOL Verizon in 2015. And it serves over 80 million users. I'm a huge fan as probably most people who are listening to this are. Jager, welcome to World of DaaS. Really excited. give us the current state of startup investing landscape right

Jager (00:19.027) Great to be here.

Jager (00:26.932) Yeah, mean, compared to the past, it's not that great, but compared to the recent past, it's doing pretty good. you know, compared to, you know, we're sort of at like 19 or 2019 levels of funding, but we're like half, more than half off of our peak in 2021. So even though there's huge rounds happening, we're nowhere close to peak venture.

Auren Hoffman (@auren) (00:51.042) And where is that getting hit the most? from seed stage, it seems like the valuations are as high as they ever were. At least that's my anecdotal. So is that hitting like the series B stage the most or where is it hitting the most? Or is it everywhere?

Jager (01:05.155) It's kind of peanut buttered over all of them. The difference is just there are fewer rounds or fewer deals getting done.

Auren Hoffman (@auren) (01:11.988) got it. So the valuations of CDCs are still high. It's just, harder to get, it's harder to get funding.

Jager (01:18.481) That's right. it's going. So those valuations are going up and up and up, especially if look at averages, because you've got these like, obviously open AI just like totally skews the average in the wrong direction. But it's the number.

Auren Hoffman (@auren) (01:21.672) Mm. Yep.

Auren Hoffman (@auren) (01:27.478) Yeah, totally. Yeah.

But these Y's, the average YC company is today raising money at a higher valuation than it was ever before, I presume, right?

Jager (01:39.923) That's 100 % right. That's 100 % right.

Auren Hoffman (@auren) (01:42.762) And, and is that, does that just mean like the reason why the valuations are still pretty high is that there's still a lot of money and they're chasing fewer deals. So therefore there's just a market, like a supply demand curve there.

Jager (01:57.619) I mean, there's a lot of deals that could be done. I think a lot of companies are not getting across the finish line. So it is like the best deals are certainly a scarcity and that's where people are bidding up these crazy valuations. But at the end of the day, if you have a company that certainly would have been funded in 2021, there's no guarantee you would have been funded today. And I think that's the people that are losing out depending on your perspective.

Auren Hoffman (@auren) (02:02.616) Yep.

Auren Hoffman (@auren) (02:22.35) My anecdotal is that there's kind of like basically three types of rounds that are getting done. There's rounds where you have zero term sheets, so they're just not getting done. There's completely non-consensus one term sheet getting done. And then there's the one where you have like eight or more term sheets. Whereas I think in 2021, a lot of times you had like the two to three term sheets happening in that. I don't know if you would agree with that or not.

Jager (02:41.265) Yeah.

Jager (02:50.107) No, anecdotally, like we don't really track term sheets, but sort of anecdotally, I hear the same thing where a lot of CEOs are saying, I just can't get a single term sheet at all, or they're so thankful that he got that one and they're gonna go with that one because that was the one that at least they got to find that they think they need.

Auren Hoffman (@auren) (02:52.909) Yeah.

Auren Hoffman (@auren) (03:02.88) Yeah. Yeah. Yeah. I don't, I don't know any company that gets three. It's either like zero one or eight. You know, there's like no three anymore. Yeah. So it's like most of these deals are like complete consensus or complete non-consensus, but nowhere in between.

Jager (03:09.542) Yeah. That's exactly,

Jager (03:18.703) Yeah.

Jager (03:22.131) And I think that's, and what I suspect that speaks to is I think of VCs, generally speaking, don't have a good sense of how to tackle this shift. They've seen shifts time and time again in their markets, but this one's different. This one, how do you bet on the technology that's gonna change in a week or a month or a year? And certainly when you think about where my history is, With sort of enterprise SaaS, like Salesforce here, like.

Auren Hoffman (@auren) (03:39.992) Yeah.

Jager (03:48.914) how do you bet on a workflow tool? How do you bet on a thing that's gonna make your workday a little bit better when you've got this huge disruption whirlpool happening over here, sort of sucking down any sort of competition down the road? It's a hard place to So I think those one term sheets are either VCs who...

you know, they're just praying and spraying. So they're just saying, I'm gonna go and apply this to a ton of different potential deals. Or they don't know what they're doing. I hate to say it, but you find that the one that hasn't quite figured this out yet, because I think it's unlikely that you found an investor who saw the diamond in the rough that no one else could see. I think that particular narrative that you'll tell yourself is unlikely.

Auren Hoffman (@auren) (04:32.652) Yeah, it's interesting because in super early stage where I usually invest, it's almost still the same, which is a big bet on the founders. Whereas if you're betting in the series B and the company's growing like crazy fast as some of these AI companies are growing, it's very hard to model that because you know it's not going to grow just that fast.

Jager (04:43.867) Mm-hmm.

Jager (04:57.138) Right, right.

Auren Hoffman (@auren) (04:58.712) But are these things going to turn and how sticky is the revenue? it's just like, so you're also, you're not only those guys, they might be consensus. They might be getting eight term sheets, but the valuations of those term sheets could, you know, one could be the highest one might be more than two or three acts where the lowest one is or something.

Jager (05:17.201) That's right, and I see the stream of deals getting done and there's so much of, I'm just like, what are these people thinking? Because I don't think people are, and I mean this across every aspect of every single person that is working today in tech, but I just don't think we really truly grok what the difference is now. When a VC is investing in any tool, any tool, if they're not thinking that they need to exit within the next 24 months,

because it doesn't make any sense to me. If I was starting a CRM tool that was like going to do better than Salesforce, whatever it was.

that company won't exist in three years, four years. Maybe that may be controversial, but like the one that's starting to now, hey, we're AI first. We got to 10 million ARR with a handshake and three people that use Replit to go and build this thing. Like that thing, even if it has amazing proprietary tech, that thing is going to not exist in three to five years because look at where we're going, right? If I can code a decent app myself today.

Auren Hoffman (@auren) (06:19.394) Why do you say that?

Jager (06:26.353) And it will be okay. It's not that great, but it's a prototype. And in one more year, it's gonna be a great enterprise class app. It's gonna do everything I need it to do. If I'm an internal IT person at insert any company name here, and I say, we really want the CRM system, but I needed to do these 16 different things. Am I gonna go and hire, like buy an external software to do it? Or will I just be the person who builds the custom solution inside? I really think we're gonna shift back to internal apps.

that are custom bespoke for the business that you're in, doing all the weird integrations you need to do.

Auren Hoffman (@auren) (06:57.198) mean, that is what people traditionally have done with Excel and Google Docs. know, and so it's always unclear, like, are you, you know, lot of these companies are, are just things you did in Google Docs or Excel before and now you're turning them out. And, and so, and yeah, I guess maybe it goes back, maybe it goes back and forth. Like the pendulum keeps swinging. I don't, I don't know that has to though. Right? Like, okay. Okay. All right.

Jager (07:15.44) I think it has to because the AI, it has to, I disagree, it has to, because the AI is gonna go and say, look, this would be so much better if you had these other features that can go and build and I'll just build it for you. And now you have this like continuously custom solution for your enterprise to go and do things. Why would I go deal with anyone else's robot? Why would I worry about you changing the things that I love or getting rid of the thing or by the way, charging me some different price to go and maximize the spend that I'm doing?

All of that goes away when I start using internally.

Auren Hoffman (@auren) (07:44.268) I mean, at some point, like, yes, if it only takes one person to build, then sure. But, I mean, most of these apps, like they do require more than one developer full time. And if you just have more than one developer full time, it's usually a lot less expensive to buy it.

Jager (08:03.216) Do you think that's true in 10 years? Like in 10 years, like there's no way you have an army of developers doing this. There's just no way you might have an AI manager managing your AI engineering team. There's just, we are necessarily going in that direction.

Auren Hoffman (@auren) (08:16.79) I mean, I, I am very pro AI, but I, I, I love, I love your, I love your enthusiasm about all this stuff. I hope you're right in some ways, like that would be amazing because there would, there would also be this like massive number of things. And then at that point, the price might come down. then, you know, instead of paying 200 grand for this enterprise thing, I'm paying 10 grand. still cheaper than me doing it myself and hiring a full-time developer.

Jager (08:24.175) It feels like it's necessary.

Auren Hoffman (@auren) (08:44.664) to do it. So it is possible that I'll go back the other way and just, and there'll be all of these like, you know, small companies, but that are making 100, $100 million with three people or something.

Jager (08:57.423) No, that's right. I think that is where it ends up. that's happening a little bit today, right? Like you hear these little anecdotes of these small companies that have hit a hundred million in a short amount of time or 10 million in a short amount of time. If I was that founder, I'd be selling tomorrow. Like if I guess great, good job, you got the bootstrap company, that business model is not going to be sustainable, sell it. Sell the company, sell it, you're gonna make a hundred, $200 million. Congratulations, get out.

Auren Hoffman (@auren) (09:24.863) I, I, I, and so you just think it's just, they're not going to be smart enough or they're not just, not going to be able to ride the curve. There's two, two likely things are going to be destruction. She say, Hey, take the chips off the table.

Jager (09:37.123) the AI is going to be smarter than us. Like that shouldn't even be controversial, right? So you're like.

Auren Hoffman (@auren) (09:42.862) But I mean, look, you run a company. I mean, it does data, but you run a company today and it's pretty successful company. like, you know, do you want to just like sell it right now or something like, yeah, they, could probably do a lot of the stuff that your company does too, too. Right. I yeah.

Jager (09:56.643) That's 100 % right. so the real question now becomes is what is the completely defensible thing? It can't be you did it first, it can't be like you thought of this cool process. It has to be what is absolutely completely defensible mode. those are the only things that may survive. And you really have to analyze, cool, you have a very defensible thing. Is that truly a necessary thing for the future?

Auren Hoffman (@auren) (10:03.703) Yeah.

Auren Hoffman (@auren) (10:07.704) Yeah.

Auren Hoffman (@auren) (10:20.172) What are the things you think are going to be so defensible to override the AI and stuff like that?

Jager (10:26.645) Totally biased opinion. think proprietary data that no one else can get in any scenario is truly the only thing that's gonna matter in the end. And by the way, it has to be changing data. It can't even be old, like it has to be time-series data. That probably is one of the only things. That and foundational model stuff, right? Like if you were building blocks of the thing, I think that does...

Auren Hoffman (@auren) (10:41.55) right, time series, time series data, yeah.

Jager (10:53.027) persist and make money and people will pay their fair share to you.

Auren Hoffman (@auren) (10:55.758) What's the thing? Most data, there are substitutes or there's other types of data. There's other things to back into it and stuff like that. What would be an example of like, it's like, obviously you have companies that sell credit card data and you have companies that sell this other type. We've had many on this list and these are fine companies, but almost none of them have become unicorns. Maybe they will in the future.

Jager (11:21.783) Right.

Auren Hoffman (@auren) (11:23.435) But most very few data companies have actually gone on to be just like, they've gone to be good businesses, but none of them have been like iconic businesses.

Jager (11:31.502) That's right. And I think that does change. do think that again, but you need to have the equation of it is critical for the future. And I think a lot of people who have the proprietary don't fit that. Are there any of these companies? I don't know. Again, I'm a very biased person. I think Crunchwaste has at least a stab in this direction. And that's why.

Auren Hoffman (@auren) (11:44.11) Yeah.

Auren Hoffman (@auren) (11:49.528) Sure. Well, part of the Crunchbase benefit is like, you have great data, but also has like amazing brand. Everyone's heard of it. It's got great SEO. So you can, you can acquire customers for cheaper, right? There are other like, yes, I agree that the data at Crunchbase is very good, but you have a lot of other things going for you too. I'm sure you have some super talented people. You have a great CEO, right?

Jager (12:14.429) Tucked. Questionable. But the reality is those things are nice. And I don't take them for granted any day. They're super powerful stuff. But I don't think it's powerful in the future. I just don't. think with us, funding data. Funding data is already on the brink of being commoditized. Sure, I think we have the best. The early stage stuff, we get sooner than anyone else. Cool. That's true.

today and that matters a little for some today. And then we have built a business on some of that stuff. We have competitors, but we also have people just straight up taking our data and reselling our data out the back. And by the way, when those factual pieces of data get into an LLM, they're there permanently. That's it. So all I can play if I stayed with historical data is focusing on the ones that haven't yet been absorbed by the LLM.

Auren Hoffman (@auren) (12:57.688) That's it. Yeah. Yeah.

Jager (13:07.741) And that's just not, that isn't sustainable. So we as a business have to say, well, what else do we have as an asset that we can go and build on top of that's gonna differentiate us now and into the future? So that's why I play with usage data, right? So the one thing that no one else has, certainly any of our competitors, even LLMs, they don't have 80 million people using our stuff.

Auren Hoffman (@auren) (13:26.936) so like what are they searching for? are they searching? What are people doing in a day? They know. Yeah.

Jager (13:30.167) How are they adding view, even just view data? So, and obviously I can't say what is Orin looking at and hey, who wants to buy what Orin's looking at? But I can go and say what are investors looking at, right? And how is float.

Auren Hoffman (@auren) (13:41.858) Yep. What do they care about? How's that changing? Yeah.

Jager (13:46.113) And down to the profile, like how are people looking at Blue Sky, let's say as a company, how is investor traffic shifting on the Blue Sky profile over time? And when I go and look at that and compare it to the past and I sort of look at the 17 years of data and say, well, how is this working? And then I layer in things like, how is that profile being edited? Has anyone edited the Blue Sky profile? Like, why would they edit it? So why are they editing it? And now I have a massive influx of investor flow. No one else has that data. So what can I build with that insight?

Auren Hoffman (@auren) (13:54.187) Yeah.

Auren Hoffman (@auren) (13:58.816) Mmm.

Auren Hoffman (@auren) (14:05.23) Hmm.

Jager (14:14.954) And and LLMs can't do it. LLMs won't be able to like make that up.

Auren Hoffman (@auren) (14:16.874) that could like completely change your business. Right now you charge for like the deep access to the data. If you really cared about like the viewing habits and what people are doing, you would, you'd give it away for free. might even send them to use it or something and then, and then, then sell the insights on the, in the back door. Right.

Jager (14:32.076) 100 % right.

And I think, that is the, we were at the exec offsite just last week. We were saying like, how does our business model change with this new direction?

Auren Hoffman (@auren) (14:43.252) that's super scary because it's like, we got all these like tens of millions of revenue that we may have to like give away or something, right? Okay. Yeah.

Jager (14:48.28) Right, Like for just full transparency, that self-service business where people come in and buy a license to go and tool around in Crunchbase, that's really not gonna be the focus. I still want them to have a good experience. I still want them to use the app, of course. But yeah, you're right. Behind the scenes, we're thinking, look, what other insights, what are predictions kind? Can we predict when the company is gonna go out of business? Can we predict when the company is gonna do layoffs? Can I go and take that and sell that to a creditor or to a bank?

Auren Hoffman (@auren) (14:56.067) Yeah.

Jager (15:17.132) Create a risk score. And all those things are dependent on this very proprietary thing that no one else has access to. And I think that's where a lot of data companies are gonna get wrecked. Because if all you're doing is, we've got this secret way of getting data from that has a fact, facts are all commodities.

Auren Hoffman (@auren) (15:36.046) I, how, you really believe that facts are commodities? Because in some ways, whenever I, whenever I'm looking things up, it's actually very hard to know what's true. And often things are wrong, almost all data, you know, if, if data is always about these four nouns, people, places, companies and products, right? That's about one of those four nouns, like sometimes cross each other, sometimes across for time and price. Right. and the, the data is just like often completely.

bonkers, maybe was right at one point, but it's not ready anymore. But often it's not right at all. I bet you there's a lot of databases that have marketing database of your stuff that say you're a woman. I mean, it's just like, you're just so off of time. So is it just like, like, okay, well, most database will just get so much better in the future too, because part of selling data is that it ideally it is true. Like that's, that's one of the things you want to sell.

Jager (16:15.115) Sure, sure.

Jager (16:30.912) Yeah, and as a business that focuses on private companies are by nature opaque. mean, that's a particularly hard challenge for us. And we have a lot of mechanisms in place to try to get to the truth, but we know it can never be 100 % accurate. Do I think LLMs are going to do a better job in the future? Yep, I do.

Auren Hoffman (@auren) (16:48.578) Yeah, for sure. Yeah, make it easier to get truth. Yeah, they can and they can they can check it many different ways or they can say this doesn't seem right. You know, yeah.

Jager (16:56.747) Right, right. So, and again, I think that it isn't just a crunch, crunch based thing. Everyone has this problem. Is IMDB, as just a random example, is like, IMDB going to be the source of truth of who's at what, did what movies, right? Like that, that is, that's weird, right? Like those are all factual historical things. So that will just be some of you asked where LLM is going to tell you the answer. You never have to go and talk to IMDB anymore. And I think that's so true across.

Auren Hoffman (@auren) (17:12.172) Yeah, that's weird. Yeah.

Auren Hoffman (@auren) (17:20.546) Yeah.

Jager (17:24.332) every data set you can think of, unless you're getting it in a weird way, unless you're getting it in a way that can't be done by an AI. And that's where, even like partnerships, at some point people might just do partnerships with open AI, like an AI agent working for open AI is gonna reach out to all the same places that did partnerships and say, would you rather give us the data? And they're gonna say, And so there's just all of this.

Auren Hoffman (@auren) (17:39.224) Yeah.

Yeah.

Yeah. In fact, a lot of our companies are selling data to open AI and drop back perplexity. Some of these other ones. Yeah.

Jager (17:50.943) Right. And I don't think those companies are doing a good job at scale of making those partnerships yet. But as soon as they start using AI to figure out how to do that with their own BDAI agent, like your proprietary way, because you had 4,000 partnerships, it doesn't matter anymore.

Auren Hoffman (@auren) (18:06.402) Yeah. I mean, you're scaring me because like, some ways, I'm like, because in some ways it's like, okay, well, like, it seems like like, 90 % of our companies might not work now. And maybe I should just be like investing in like, things AI is not going to like tackle anytime soon, like, you know, local massage spots or something or whatever.

Jager (18:20.83) I think it's a question.

Like this is really the local doom and gloom is sure that's happening now. But the reality is there is an M and A market that's going to open up because what people are going to realize is these larger companies are saying, well, how do I get this stuff into my products as quickly as possible? And so I can go and monetize this and then use our huge resources to go and push deeper onto this. So I do think the M and A market on data is, I mean, it's already hot. It's going to keep getting hotter.

Auren Hoffman (@auren) (18:43.319) Yep.

Jager (18:54.282) as this becomes more more apparent. Like in art.

Auren Hoffman (@auren) (18:56.086) Is the &A market quite a hot right now?

Jager (18:59.306) Um, data, I think in data it's doing pretty, it's, really harder than it was a few years ago. Um, you see like TGIS and all this sort of stuff happening. Like that's, this is, um, uh, this is a world that, that is figuring out the things I'm saying.

Auren Hoffman (@auren) (19:01.152) Okay. Really?

Auren Hoffman (@auren) (19:15.96) Cause by the way, like I have, I mean, at least from what I've seen, I haven't seen it hot at all. Like, so that's why I'm asking you have much more data than I do, but I'm sending me a lot of these data companies I'm saying are, are, can't even trade for four or five times EBIT. Like they're getting, it's really been hard for them to, to, you know, let alone four or five times the revenue. Chigas being an exception.

Jager (19:22.046) Yeah.

Jager (19:35.017) There are some rules to be successful. Yeah, I mean, there's rules that you need to have. One of them again is how many people are in your market, right? And how many buyers are there? Like in our, just for fun, us, we have a ton of people who play in the company data space. Most of them are focused on the public company side. A lot of them want to be in the private company side. If they want to get into private companies, who are they going to buy? There's only a few options available.

Auren Hoffman (@auren) (19:53.869) Yes.

Yeah.

Yep.

Auren Hoffman (@auren) (20:02.926) Right. One of them was bought by Blackstone. So, right. Okay. Yeah. So there's not that many left. Yeah. Yeah. But that's where I like maybe some of these things like this where I'm thinking like, think some of these things like brand do endure. Like I think part of the reason I want to buy Crunchbase is like that brand is worth a hundred million right there or something. Right.

Jager (20:05.192) Right. Right. So that's it for us. And when they're gone, they're gone. Right. So like there's.

Jager (20:24.241) Yeah, yeah, I mean, you're welcome to like, actually, that's it'll be a little bit more expensive than that. But the reality is, is that that brand, think is a temporary thing. I like we're gonna try to not be temporary, right? But the gravity is gonna try to pull that brand back down. And so we can't rest our laurels on the fact that 80 million people come to our site, because those 80 million people might have a reason never to come to our site.

Auren Hoffman (@auren) (20:37.389) Yep.

Jager (20:49.705) So we need that's why we need to put things on it that no one else has and give you reasons to come that no one else can give you and so back to your question There are other data companies that maybe don't have that same dynamic that there's a lot of people in the space and it's hard to differentiate between all of them and there's not a lot of buyers because no one really wants the I'm just making sure that base the baseball card Anthology or whatever is the baseball card history of all time like who cares? No one's gonna buy that so

Auren Hoffman (@auren) (21:03.085) Yeah.

Jager (21:17.768) It just depends on what you are and what marketing you're in. But if you have one of these things that there's a limited quantity, is necessary for the future, and these large public companies need it to get to their next level and to survive the AI way that's coming for them as well, it's a great time to be in market.

Auren Hoffman (@auren) (21:35.982) Interesting. It's funny because like we have companies that are selling and we have also companies that are trying to buy and nothing is happening on either side. It's like the selling they can't sell. No, there's no buyers to sell, but then the buyers can't find anything to buy because for whatever reason, like most companies are just like, they don't want to sell at least for those prices. Like why am I just like, cause they're all so profitable. AI has made all these data companies so much more profitable than they were. And then maybe they

Jager (21:45.714) Yeah.

Jager (21:58.909) Sure.

Mm-hmm.

Auren Hoffman (@auren) (22:05.902) Maybe they have to start giving away those profits to customers soon, but at least for now, they're way more profitable than they were in 2023.

Jager (22:13.16) And this is why we've pivoted to what we're doing, which is trying to predict what companies are for sale, right? Which companies are going to be acquired soon is a whole area that we're not pushing into. So we can predict what's gonna happen next at a company, 100%. Yeah. Yeah, it's a good list. And so that's why we've said, when people come to Crunchbase, they're already asking those sorts of questions.

Auren Hoffman (@auren) (22:20.705) Yeah.

Auren Hoffman (@auren) (22:25.656) Can you give me a list of companies to go buy? that's great. I'll definitely I'd buy that list. Yeah.

Jager (22:37.135) Is it like which companies should I buy? Which companies are even going to be for sale? Which companies are in my price range?

Auren Hoffman (@auren) (22:39.692) Yeah.

So if I say like, okay, three to 20 million in revenue, this type of thing and data, you know, with this level of complexity or something like that, you know, could just spit out a, like a list of potential companies, like in order of like once that are most, most likely to be interested in me trying to buy them. Okay. That's, that's amazing. Okay. I, I should totally do. I can't believe I didn't know that. Like that's so obvious. Okay. Yeah.

Jager (23:06.12) 100%. Like that's what, that, you should totally do that. Yeah, it's gonna say these are the companies that we predict.

Auren Hoffman (@auren) (23:13.814) Yeah. And, I guess vice versa. I want to sell, who are more likely to buy my company. So then you don't need the investment banker in the future or whatever. Here's the list of the potential buyers. Yeah. Yeah.

Jager (23:17.81) Same thing.

Jager (23:22.756) Yeah, the banquet is a little bit more than that, but that's right. So right now we'll say which companies are most likely to get acquired with some percentage next to it. On the UI, we'll just have a little bar chart, but in the API, we'll actually go and say not only what the percentage chance is, but also what are the drivers that we are looking at that made us decide that this company is likely to get acquired soon. So that's step one.

Step two, which is on our roadmap is let's tell our users which are the most likely acquirers or which are the most likely companies you should buy or should buy, right? And so we'll make it more tailored to the user itself.

Auren Hoffman (@auren) (24:03.438) I think you say for okay, for your company, here's the curse of companies are most likely to buy you and we're going to run marketing campaigns to the exact people in those companies for you. Like I would definitely I'd pay 10 grand a month for that just to like always be in front of those people. Like that sounds amazing.

Jager (24:13.851) Right, right, exactly right.

Yeah. Right. So that's where like, don't personally know how an LLM can do a good job at that. All they can do is say, look at the historical and say, it was about time for them to get acquired or it's been a long time since their last funding round. But with that extra data of who's looking at it, what are they doing, what's happening on the page, there's a lot that we can sort of extract. And that's where I get excited. Like that's true for me, clearly the future of where we're going as a business and trying to find more of those predictions. Can we predict, I mean, we already have it.

Auren Hoffman (@auren) (24:29.73) Yeah.

Jager (24:49.019) this growth prediction, do we think the company is going to grow? Like that sort of insight. Again, can I predict with any sort of accuracy what we think a future valuation might be, for instance. So we're talking about like, how do we do valuation predictions? like, that's where things get more like, that's where Crunchbase actually does the valuable thing that you always wanted to do. Cause when you were coming to Crunchbase before, those are the questions you were asking and we're just giving you like one data point saying, well, here's the last funding round. And you would have to sort of figure that stuff out on your own.

Now we're using thousands of feature vectors that go and figure it out. It's way more accurate than people expect.

Auren Hoffman (@auren) (25:24.686) I forgot to tell the audience, I am an investor in Crunchbase. So I do love the company, but I'm also like, have financial incentives to love the company as well. Now, when I left San Francisco three and a half years ago, moved to DC. And I think I left, I think I called the bottom like perfectly.

Jager (25:28.391) You

Hahaha

Jager (25:44.571) Hmm, nice.

Auren Hoffman (@auren) (25:46.028) Right. And so, and when I had left San Francisco, thought, okay, people are going to be ambitious. People are going to be moving all over the country or more all over the world. They're going to move to Miami. They're going to move to Austin. They're going to move to Berlin. They're going to move to Lisbon and they're going to go start a company. then fast forward to today, 2025, it seems like almost a hundred percent of ambitious people I know who are 24 and they're in tech are moving to San Francisco. like if they're going to move, they're not moved. None of them are moving to Miami. None of are moving to Austin.

They're not moving to Berlin or Lisbon. They're moving to San Francisco. Do you agree with me? Okay.

Jager (26:21.031) 100%. But it's also weird. It feels like a temporary thing to me. This is easy to dispute and to debate. So I understand that I'm right on the fence here. But it feels like people are saying, I need a certain set of skills right now, and I need to get to where those VC dollars are. And everyone moved out, so everything's a little cheaper. I think San Francisco is improving as a city way better.

Auren Hoffman (@auren) (26:45.914) yeah, it's way improving. Every time I... It's amazing. I mean, it's like so fun every time I go there. The way modes and everything. Yeah.

Jager (26:51.142) Right. It's cool. So I think there is this draw coming in. I think you're going to get some peak San Francisco again, like prices are to get kind of crazy. And then again, controversially, think the talent market, talent isn't the reason you're in San Francisco anymore because that becomes less important with AI's improvement. Couple of people, couple of people. I agree. And so I think that goes away. And then, and and then this is the part that, that, is also controversial is I think VC funding maybe becomes less important.

Auren Hoffman (@auren) (27:05.623) No.

You still might need a couple of people or something, right? And yeah, yeah. Okay.

Jager (27:21.752) to be close to. And if that's true.

Auren Hoffman (@auren) (27:22.282) I agree with that. yeah. Or just getting BC funding is maybe not as important, period, right?

Jager (27:28.208) Bootstrap companies are the new cool thing. then I think there might be like,

Auren Hoffman (@auren) (27:31.574) Yeah, I mean almost every data company we're involved with is profitable. Maybe it wasn't at one point, but it is today.

Jager (27:36.772) Right. Totally. So I think the draws of going to San Francisco are then therefore the city itself rather than anything else. think then you'd get back to why don't I just move to Lisbon or somewhere else. So I think it's a temporary cycle.

Auren Hoffman (@auren) (27:44.855) Yep.

Auren Hoffman (@auren) (27:52.686) It's a fleeting thing like it's true today, but it might not be true in 2027 2028 or something like that. Yeah, for sure. Yeah.

Jager (27:58.778) San Francisco is always gonna be a popular city to in. don't know if it's gonna be the tech hub of all tech hubs.

Auren Hoffman (@auren) (28:05.358) Yeah. Like today, if you are an ambitious 24 year old and you're in tech, you really care about tech. are a hundred percent going to move to San Francisco. Now, if you're 44 and you've made a gazillion dollars, you might move to Austin or Miami or something. But if you're, if you're 24 and you're ambitious, you are, and you don't have a family yet you can live in a group hacker house or whatever. It sounds super fun. Like you're moving to San Francisco. Like if you're not, you're really, you're just probably just not ambitious.

Jager (28:11.236) Yeah.

100%.

That's right. That's right.

Jager (28:25.669) Exactly.

Jager (28:32.793) That's right. That's right.

Auren Hoffman (@auren) (28:32.802) Like when you meet people are like, yeah, I'm moving to Miami. I'm like, and you're 24. You're like, well, you're not, you're not, you're clearly not an ambitious person. If you're moving to Miami and you're 24.

Jager (28:40.537) Right. And then you have your first sex and you're like, hmm, the tax implications of that or as good as they should have been. Maybe I should reconsider.

Auren Hoffman (@auren) (28:46.466) Yeah. Yeah, that's right. Yeah. Yeah. Yeah. That's right. Yeah. So there are a lot of, there's a lot of good reasons to not live in San Francisco.

Jager (28:52.933) But five years from now, I don't think it's gonna happen in next several years, but five to 10 years from now, I think it slowly starts drifting back to just a beautiful city. Okay.

Auren Hoffman (@auren) (28:59.864) Okay. So I called the bottom before, but you think there's another bottom to be, we're in like a new hype cycle right now.

Jager (29:07.833) That's right. I think we're in a hype cycle. That's right.

Auren Hoffman (@auren) (29:10.294) Interesting. Now you, you posted a while ago, which I love, that, so he's like, I, I've now invested like in hundreds of startups and I still have no idea what the difference between like a seed and pre-seed and series A and you posted that we should just get rid of all those things that just use the numbers. Like you did round one, then you did a round two, then did around three.

Jager (29:14.117) Hmm.

Jager (29:22.501) Yeah.

Jager (29:28.175) Yeah.

not even that. I'm raised $15 million. Who cares what round it was, right? The arbitrary letters that we have done and then what drives me crazy when VCs are like, well, you know, at series B, I expect you to have XYZ like these particular things. I otherwise I'm investing you. It's so arbitrary. It's so silly. And

Auren Hoffman (@auren) (29:51.116) Right. Maybe based on your valuation or something, right? That kind of makes sense. Yeah. A billion dollar valuation, you should have certain certain revenue metrics and certain other things that are there. Yeah.

Jager (29:54.186) Right. Yeah. That makes sense.

Jager (30:04.568) And this comes from a place that just, yes, CrunchPace has raised money. So therefore, we went through our series, our last one was our series D in 2022. When we spun out the company independently, we called that our series A. And the reason we did is because we started with $8 million-ish of sort of funding, but we had no customers. We had no product to sell. had, by every metric of what a series A company is, we did not have it. Yeah, we had a brand.

Yeah, we had traffic, but that wasn't like, we never had the thing that most series A companies get judged on. And then, so in the series B and the C and the D, was always like, it was, right.

Auren Hoffman (@auren) (30:43.79) $8 million is a lot of money. But yeah, now that some people call it a seed, it's like, yeah, I talked to a company today. They have already raised 10 million. And now they're raising another 12. And that 12 is going to be their series A. was like, what is the 10? You know, they did a seven and they did a three. And they're like, that was a seed and a pre-seed or something. I'm like, okay. I'm like, what? Okay.

Jager (30:58.176) Yeah.

Jager (31:05.496) If you've raised money, should say, I need another $30 million. I've raised 20 million so far. Here's what we did with the $20 million and why we think the 30 million makes sense. And the investors should be like, cool, that's all I needed to know. Right. Right.

Auren Hoffman (@auren) (31:09.505) Right.

Auren Hoffman (@auren) (31:13.484) Right.

Auren Hoffman (@auren) (31:17.516) Right. It's like a public company of those public companies selling stock. It's not like, you know, it's or they're selling bonds or something. like, hey, we're doing, we're, we're doing, they don't, they don't have like a ladder on it.

Jager (31:28.246) No, and so it's, and it is, we're coming from Crunch Race, right? Cause we track this and like, I've got a dropdown menu that has these things. I could change that. could, I could just delete that. And then, and then we won't have to worry about it anymore. But I, but it's just, it's so ingrained in how we talk about these things. I just, doesn't matter. But I'm, I'm, I'm, am bearish on the whole thing. I think we also shouldn't celebrate big funding rounds. I don't think those are things that we should, I like if, if, if.

Auren Hoffman (@auren) (31:33.322) Right, right. You track a series a right? Yeah.

Auren Hoffman (@auren) (31:53.912) Hiring.

Jager (31:55.073) Yeah, all that stuff. These metrics don't matter. In fact, if anything, it's a detriment to the business. So let's not celebrate them and certainly let's think of smarter ways to talk about them than weird letters.

Auren Hoffman (@auren) (32:00.01) The anti-matter. Yeah. Yeah.

Auren Hoffman (@auren) (32:07.02) Are you managing your company and you've seen people managing their companies differently with AI and et cetera? And how are you thinking about it?

Jager (32:15.715) Yeah, I mean, that's that's probably the biggest initiative that is happening right now at Crunchbase is how like, especially as a not company that's starting, right? We have we are a company that that can't be built from the ground up. We've been around for a while. So how do we go and transform ourselves into an AI first company? And I from internally, like, how do we do the work? And I think there's a plague going on in all internal IT houses and all these companies where they say, well, we're AI first, we're AI forward, because

Auren Hoffman (@auren) (32:24.524) Yeah, put her out for a while.

Jager (32:44.663) we have a chat GPT subscription that we share around the office. And therefore our product marketing is being edited by thing. Right. Right. Exactly. right. So it's like this checkbox or like, you know, I bought the AI extension on market marketo. So like we've got AI. So that's, that's not what it is. And, and, and to change people's minds frames.

Auren Hoffman (@auren) (32:46.574) Right.

Yeah, helps us learn how to debug our, our MySQL server instance or something. Okay, you're AI first. Totally. Yeah, I get it. Yeah. Yeah.

Jager (33:12.834) all the way down to the IC level to say to themselves, my job is different now. it's complete, like what I was does not exist anymore. I now need to become the expert on how to go and do my job better than anyone else using AI. And it's on me to become the expert to figure out what tools I should be using. Like that mind shift is a very hard one to insert.

Auren Hoffman (@auren) (33:19.02) Yeah.

Auren Hoffman (@auren) (33:32.398) that is very few people are going to move to that mind shift. mean, there's super talented people I've worked with forever that they're just never going to make it to that mind shift, but they're still adding some value, maybe, but today, you know, though, maybe they're getting overpaid, right? So maybe they're getting paid X and they should be getting paid X over two because somebody who's getting paid X over two is using those tools and doing some of these other things that they're not yet doing.

Jager (33:43.948) Today. Yeah, that's right.

Jager (33:58.755) That's right. Now there's a real problem here is how I possibly as a let's say a product marketing expert, how would I possibly stay on top of every tool that's coming out? And I don't just get stuck to the one that's my favorite. And then I sort of stay there when there's 16 more that came out next week, staying on top of that flow and trying them in a way that makes sense. I don't think anyone's figured out. saw, know, Eric Levy saying, Hey, you can go and no, was a Duolingo. So was like, Hey, you can go and spend 10 % of your time just researching AI tools to help you do your job.

Maybe that's a way to do it, right? But there's, I don't think we've cracked it. Right.

Auren Hoffman (@auren) (34:29.177) Yeah. Still like not everyone's a good researcher. No one's good at that. maybe, maybe this one, maybe that's another pivot for Crunchbase. Maybe you can help me get better vendors or something like that, or like a G2 or something and help me understand what I should be buying.

Jager (34:38.1) True. Right.

Jager (34:45.228) That's right. That is a very hard challenge, but I'll tell you the ones that figure out how to do it. like when I go, if I were a product marketing person, and I was applying to that next job, my pitch isn't going to be, write great copy. My pitch is going to be, I know the best AI tools that makes me a 10X employee out of the gate. And you want me on your team? Cause I'm going to infuse that into your product marketing organization.

Auren Hoffman (@auren) (35:03.276) And what I want is not that I know the tools today because those tools are going to change. And I'm so good at like evaluating and moving and completely, it's like the, skill, the best skill, the number one skill for employees in like the past hundred years was the ability to like hire talented people, manage them, grow them, get, get leverage from them in the future. Like the most important skills is being able to select and manage vendors.

Jager (35:24.758) Right.

Jager (35:31.97) It's right, adapt, adapt to whatever the new tech is and incorporate in.

Auren Hoffman (@auren) (35:36.128) And so there's, there's, are thousands of books on hiring. There's every MBA has gazillion courses on it. and managing people, everyone talks about it all the time, even on these podcasts, but like, there's no, there's not even one book. I don't think that I've ever heard of on like, how do you, how do you select vendors? How do you figure out what to buy? There's no MBA courses or, or even CS courses on it.

Jager (35:41.815) Right?

Jager (35:52.321) Nope.

Jager (35:59.329) Right.

Auren Hoffman (@auren) (36:02.88) yet it, like it literally is the most important skill. think I don't even think it was a second, even close second, more important skill in business. So, you know, it's like, is it, you just trial and error or something. And the only people, the only people I know who are amazing at like hiring vendors are like, they're, they're all it's a super stereotype. They're, they're all in, they're all these Eastern Europeans. They run like a $200 million company and it's like a company of one or two people.

Jager (36:06.241) You

That's right.

Jager (36:15.552) Right.

Jager (36:31.102) Right, right.

Auren Hoffman (@auren) (36:31.96) They're like incredible at streaming together all these vendors somehow, but like they will never teach you cause they're just, they're so wealthy already. Like it's like, it's like their proprietary advantage. Like you can't learn from those people.

Jager (36:40.009) Right.

Jager (36:46.089) Right, right. So the question now it becomes for us, how do I up level my existing employees to become that, right? It's hard.

Auren Hoffman (@auren) (36:53.783) I don't know. don't know. Yeah. Or maybe you have to maybe you have to have fewer people somehow and spend more time or yeah, I don't know.

Jager (36:59.361) I mean, when we're hiring people now, it's easy to sort of have these questions to be part of the interview process, sort of say like, how are you doing it? What are you doing? Is it a garbage answer? Right, right. Yeah. Right. But...

Auren Hoffman (@auren) (37:03.958) Yes. Yeah. What, what tools are you using? Yeah. Show me the tools, cetera. Watch them code. Yeah. If you're coding today, you're not using like, like an AI enabled IDE. Like there's no way I would hire you like zero. Yeah. I would hire you today. Right.

Jager (37:19.584) Exactly, So I don't think it's a fine and replace. Like I do think it's the question for a CEO is how do you up level your existing workforce to get there?

Auren Hoffman (@auren) (37:32.246) Yeah. How are you, how are you personally doing it? Cause I struggle with that. You know, I'm like, I'm trying to spend time on these tools, but like, I don't know. Like, you know, I mean, it's hard.

Jager (37:36.713) Yeah.

Jager (37:43.2) So this is what we've got. This is what we've got going on. So what I do with my own life is I said, break up your entire day on every percentage that you've got, right? Every percentage of everything you do in your day, work, personal, whatever. And then what are the tools that you're using, AI tools that can help you with each of those things? And there's gonna be blanks in there, like nothing's helping me yet how to shower, you know? But there are, opportunity, but there are.

Auren Hoffman (@auren) (38:00.429) Yes.

Auren Hoffman (@auren) (38:05.271) Yeah.

Auren Hoffman (@auren) (38:08.704) Well, I don't know, like sometimes I like in my house, like sometimes I have to wait like multi minutes for my shower to get hot or something. Maybe there's like an AI tool I can put into my basement that would get my shower hot faster, you know, or like, you know, or just know that my alarms coming. I should like start the shower earlier or something, you know.

Jager (38:15.71) Okay, yeah, Maybe. Yeah, heat it up.

Jager (38:27.925) Right, so you break apart your daily that you fill in the tools that you're using and then you literally go through each one and say, I'm gonna research this and try to find the better tools that I'm not using today in this area to help me with the thing. Like I'm an investor in superhuman, I use them for my email, but there's probably 19 other email tools out there that are doing other things. okay, sounds good. So, but maybe there isn't, but like I.

Auren Hoffman (@auren) (38:42.957) Yeah.

My full disclosure, I'm also an investor in Subaru.

Jager (38:54.536) am I doing what I need to do to stay on top of that? And that's me at a personal level. I'm making my entire executive team do that as well, at least for the percentages of their day that it's work related and sort of going through their tools. And the nice thing is that there's a live overlap. So my head of products might have something that my head of people, yeah, start sharing it. And then I'm going to have them do that with their managers and go all the way down.

Auren Hoffman (@auren) (39:11.694) You learn from each and you'd like talk about it. Okay. Yeah. That's, that's what we need to go. got to share a, what are you doing? How are you doing it? And you get the nugget and then you got to start trying it. And, the thing of these tools is like, they're not that easy to use. So it takes extra a lot of training. Like some of these tools like super human, they won't even let you just like, have to like spend hours training before they even let you use it. Okay. Okay. Great.

Jager (39:24.904) servicing it up.

Jager (39:36.126) It's like they do now. I think they are now improving. But you're right. right.

Auren Hoffman (@auren) (39:40.706) But like, yeah, they're actually hard to use, like actually using even like chat, TPT well could take like hundreds of hours of training. Well, right. It's not that easy to use it that well and actually get a lot out of it. and then of course you train on the tool by then, like the tool might not even be like you that usable anymore. It's like, you know, these cursor, like maybe it's like great, but maybe, maybe a year from now, like there's something so much better.

Jager (39:48.746) That's right.

Jager (39:52.896) And I do think that is better.

That's right.

Jager (40:05.769) That's right. you like Replet is my very example of that because Replet a year ago was garbage in my opinion. Today it's actually really good. So how do you stay on top of even the change within your vendor, let alone a value others? And I do think there's AI solutions. Yeah.

Auren Hoffman (@auren) (40:09.718) Yep. Amazing. Yeah.

Auren Hoffman (@auren) (40:16.002) That's Right. You have a vendor today. You look at one. Yeah. Just cause you evaluate a vendor and either you thought it was good or thought it was not good or whatever. Like six months later, like that evaluation may not, whereas like if you evaluated a candidate for your company six months ago, like, you know, and, and whatever you thought they're good, you thought they weren't good and then join your company either way. six months from now, you probably still have a similar opinion about them because they don't

Jager (40:31.56) Right.

Auren Hoffman (@auren) (40:43.7) don't change as fast as as vendors.

Jager (40:46.495) Exactly right. Exactly right. So it's an exciting time to be a CEO because if you can force this change in your business, you're going to see these outsize returns. But I think also as an individual employee, which I am, like all of us are, am I changing enough to stay on top of this wave into the future so I can be relevant? Right? Right.

Auren Hoffman (@auren) (41:05.998) I don't think any one of us are changing enough. Like, I'm certainly not. You're inspiring me to change more. I gotta do this more.

Jager (41:12.671) Good, good. And too many people say, I use ChatCBG every day. That isn't it. That's not it. It's a start. That's right, that's right.

Auren Hoffman (@auren) (41:19.5) Yeah. Yeah. I mean, that's a start. That's better than not using it. Yeah. Yeah. I mean, there's still surprise. It's probably too many people are not using it at all.

Jager (41:28.413) Right. And even just choosing models, there's all sorts of like just things to learn about even how to do that effectively. But it's it's this there's this it feels like the old days. You're old enough, I think, to of course, you like 97, 96. Like people like, I don't need a website. You know, like it's the same moment where people are just like, yeah, yeah, I got it. I got it already. I got a one page website.

Auren Hoffman (@auren) (41:32.716) Yeah, yeah.

Auren Hoffman (@auren) (41:46.334) I remember that. Yeah.

Auren Hoffman (@auren) (41:53.89) Yeah, yeah.

Jager (41:55.254) It's like, you need to really think about your entire business as I was gonna shift and put in the effort to make it happen.

Auren Hoffman (@auren) (41:59.278) Yeah, I knew people in 9798 even 99. They're like, I don't need internet home or something like why I have no office. Why would you know? Yeah, that's crazy. Yeah.

Jager (42:06.12) Why would you? Yeah, so it's just that that shift has happened and it's gonna get a lot worse. so for me, if you're not the leader and the expert in the czar and your space in AI today, in a year, in two years, in five years, you are irrelevant. And you won't be able to get a job because you can't prove that you were. Like you need to be proving it now that you are to get that job five years from now.

Auren Hoffman (@auren) (42:32.79) Yeah. Yeah. Yeah. I mean, yeah. Or you'll, you'll, you'll be forced to start a company because like, I think you will. There are probably so many people today that make X dollars that I think within a year or two, they are not going to be able to get a job for even X over two. like literally like there. So it is going worse. There's other people who make X today and like a year or two from now, they might make 10 X. so, but, but it's a way smaller number that are going to go from.

Jager (42:56.189) Right.

Auren Hoffman (@auren) (42:59.854) X to 10 X and a way larger number is going to go from X to X over two. These office workers are just, they're going to have a harder time as this world changes.

Jager (43:08.766) Right, I may have an engineer or a prime marketer or a customer success person come in and say, hire me because I am 20. I already figured out how to automate the job that you're hiring for. I'm gonna be that and I'm gonna run 20 agents that will do work 24 seven and that's gonna be my function is making sure those agents stay on tasks to get stuff done. Am I gonna hire that person? Right, I hire that person. Right.

Auren Hoffman (@auren) (43:21.388) Yes.

Auren Hoffman (@auren) (43:32.078) Yeah. I want to hire that person right now. No one, nobody pitches that. why do it? Like that's you should pitch. Like you should like send and, know, send these things and yeah, that's exactly right. But that's incredibly difficult to do. And, and maybe if you could do it, like, why would you want to work for me? You should just go work for yourself. Like, they're smarter than me clearly. Like, like, that's another, it's just like very hard to find those people. These like super proactive.

Jager (43:41.831) Exactly.

Jager (43:50.411) I'll do that. Exactly.

Auren Hoffman (@auren) (44:01.534) type of things now in the data world, you've got these, like, there's kind of like, some ways, like the way we think about data is that there's truth. So these are, this is like what happened in the past. in some ways, like that's what like kind of like traditional crunch base has been. Right. And then there's religion, which is what will happen in the future, right? Which is what you were just talking about. Here's the companies that will, you know, be selling here's the companies like there's some sort of prediction. It sounds like what you're saying is that.

Jager (44:16.21) Yeah, yeah.

Auren Hoffman (@auren) (44:30.592) religion will be more valuable than truth.

Jager (44:34.333) It has to be. It has to be. And now the tricky part of all that, of course, is tell me any prediction engine you've ever seen that's good. Almost all of them are terrible, right? But that's changing. And like in our case, we have 95 % precision. It's hard to even believe it's that good because we have all these little secrets that make it easy to figure out, but no one else has access to them. They don't think that way.

Auren Hoffman (@auren) (44:41.73) Yeah, they're terrible. Yeah. Yeah.

Jager (45:03.258) the user has to start believing it and the user has to say, I'm going to put my business future into the hands of a company that's predicting stuff when I have a history of not believing in predictions. That's our challenge when the prediction is good enough. But I would way rather place my bets on that company that's placing the one that has like, we're just gonna get another, like we're on top of the right size of funding rounds. That doesn't matter anymore. It just doesn't.

Auren Hoffman (@auren) (45:16.781) Yeah.

Auren Hoffman (@auren) (45:30.83) It's interesting. Historically, the religion companies have had a tough time. Um, like they've been super competitive because like all, like, like real religions, um, it's like, wow, you know, they, everyone believes they don't, if you believe a certain thing and someone else will think you're going to hell or, you know, it's like, you're, you say you're a Bayesian. I hate Bayesians. Well, then it's off right there, right. Or some sort of thing. And

Jager (45:54.608) Right. Right.

Auren Hoffman (@auren) (45:57.314) The only way that any of these religion companies have ever become big companies is if they've kind of like crossed the chasm from religion to currency. And then it's like, well, people actually don't really believe in a religion, but like everything that's priced like a FICO, every, no, maybe people don't even believe in the FICO score, but they, they price it's, it's, it's the currency. It's in every single loan. So therefore you have to trade in Pike FICO scores. It's almost like the U S dollar.

Jager (46:05.841) Mm-hmm.

Jager (46:20.389) Exactly.

Auren Hoffman (@auren) (46:25.846) in a way. so therefore the, the, the company becomes super valuable, but the, do you go from like religion where you could have like thousands of religions, right? To like, okay, this is the canonical one that we're all going to agree with. And that company, like, cause you don't want to have like thousands of competitors either. Right.

Jager (46:26.075) Right.

Jager (46:44.732) Right. mean, at the end of the day, it does come down to prove us in the pudding. The nice thing about predictions is someday they come true. I can show it's not just a faith based thing then. It is now this thing like, look, we have proven time and time again, like in our case, how we talk about it is in April, 600 of our predictions came true. So we were able to go and say, you know, these companies got acquired and they got funding. What was that worth?

Because you missed it, what did you miss out on that? Like for you doing deals, if you miss out on the hot company, that company sells for $5 billion, zero ROI on not buying Crunchbase is very, very clear. So, and then it will become, if we do get competitors that in that space, we'll go and say, well, here's our accuracy rate in the last six months, let's compare and the best one, let the best one win. And that's where we feel really good because

Auren Hoffman (@auren) (47:16.152) Yeah.

Jager (47:43.254) No one else has any NINDA now data that, unless they're somehow getting into the process itself before it happens, which is unlikely to happen, there isn't a lot of data that does happen that can help these predictions beyond historical data, except for usage.

Auren Hoffman (@auren) (47:59.5) Yeah. The best prediction algorithm would be the one that because they predicted it caused the thing to happen or something.

Jager (48:07.664) Well, I've already been accused of that. So like one of the theories is you might get more term sheets because once we start thinking that you're getting a funding round, we're going to raise the visibility of your company up to a broader set of investors, which will get you more in-bounds, which will get you more term sheets. So we might be maybe just having the prediction that we think you're going to get acquired might help you actually get acquired, which makes our predictions come true, which is OK by us.

Auren Hoffman (@auren) (48:23.082) Right? Right. Right. Exactly. Yeah.

Ha.

Auren Hoffman (@auren) (48:35.254) Yeah, totally. Yeah. Then that's, that's where it becomes maybe really valuable or something. Now there are many, I know many, truth data companies who are kind of doing what you're doing and are kind of like investing in religion or pivoting to religion. Like what advice would you give those companies?

Jager (48:39.269) That's exactly, exactly.

Jager (48:55.195) Yeah, I mean, it's got to be something around like when I started off this conversation with is what is the defensible mode and don't lie to yourself. It's I think too many people call too many things a moat that are not moats. And if you don't have one, if you can't find one, you need to pivot the company into doing finding one like that. That should be the only purpose. And if that isn't and it's and it's again, too many people like a lot of people. I've done it. I've said Crunchface brand is our moat.

Auren Hoffman (@auren) (49:14.51) Yes. Yeah. Yeah. Yeah. Yeah. Fine. I'm out.

Jager (49:24.707) It's like trying to start a new LinkedIn tomorrow. Like you can't go and be another crunch base. There's already one. I don't know if that's true anymore. So I'm not gonna rely on that moat, even though it may be true. That may be a moat for the next 50 years, I don't know. But I'm not gonna rely on it. And I would encourage those data sort of truthers to go and say, go and find your religion.

Auren Hoffman (@auren) (49:27.629) Yeah.

Auren Hoffman (@auren) (49:33.315) Yeah.

Auren Hoffman (@auren) (49:39.02) Yeah.

Auren Hoffman (@auren) (49:52.974) And one of the weird stories about Crunchbase is it was originally part of TechCrunch, then it got bought by kind of like Verizon, you know, like kind of thing. and then eventually it got spun out into a new company. You, were kind of there as the founding CEO, Emergence kind of came in. There are probably a lot of companies like that, that, that, where that could happen. They're kind of like orphans somewhere. They've got a good brand. They've got something.

Jager (50:02.585) Yeah.

Jager (50:16.89) Hmm.

Auren Hoffman (@auren) (50:21.578) the bigger companies not going to invest in it, A, because they don't want to lose money, B, because they can't necessarily attract the talent who needs equity and other types of things to invest in it. Have you seen more of these things, like these kind of spinoffs happen, like Crunchbase? And what advice would you have for people who want to think about that?

Jager (50:41.338) Hmm.

Jager (50:45.978) I've had people talk to me about it. Like I've had people reach out and say, hey, I'm thinking about spinning out this department or something. And because I've done it before, like I'm one of the people they call, but I never see it actually happen. Yeah, it's pretty rare. It is, like the, and this is where Emergence was great, who helped with the spin out, like just to drive that forward. It was a complicated process and they had a bulk of it.

Auren Hoffman (@auren) (50:51.96) Yeah.

Auren Hoffman (@auren) (50:59.434) Doesn't happen often. Yeah. Yeah, it is complicated

Auren Hoffman (@auren) (51:07.937) Yeah.

Jager (51:14.476) The reality is, if I was thinking about doing that today, again, ask these same questions. Are you just walking into a, are you a dead person walking because you're walking out into a world that's about to change and make that great idea that you have not actually that great? If you are, you have real conviction that that's a good idea, it's fine, a great investor is going to help you spin it out, right? Because they're going to make you make it a real case. Like you need to find, like having emergence, how did we not have emergence?

Auren Hoffman (@auren) (51:29.004) Yeah.

Jager (51:44.377) That just never would have happened, honestly. So you need to have that really credible investor who's willing to take that gamble with you. And that can be, that's maybe where you should be spending all of your time is helping find the partners who are gonna help make it happen. Try my best advice.

Auren Hoffman (@auren) (51:45.357) Yeah, yeah.

Auren Hoffman (@auren) (51:58.168) Now, like so many companies, Crunchbase and so many other companies did raise a lot of money over the last few years, partially because they could raise, you know, the easier, as you mentioned, 2021 to go raise money. Like, do you wish you raised less? Do you think some of these companies should have raised less? Like, how do you think about it?

Jager (52:20.377) I mean, yeah, the world today is different than the world yesterday. The world today, yeah, raise as little as possible. If you don't need to raise it all, don't raise. mean, that's just good advice. Back in our day, yeah, mean, there was few choices. There was a lot of work to be done. Again, a lot of people think card space is just a user-generated content data thing. It used to be in 2014. When we spun out, that now is...

Auren Hoffman (@auren) (52:23.575) Yeah.

Auren Hoffman (@auren) (52:34.444) Yeah, maybe you no choice. Yeah.

Auren Hoffman (@auren) (52:45.603) Yeah.

Jager (52:47.189) user-generated content is like 5 % of the data that comes in. It's an important 5%. But then all these data pipelines we had to build, we had to rebuild the entire thing from scratch. All these different inputs that are coming in, that takes a lot of work. And then the data science itself, in the last few years, it was incredibly exciting for us to try to figure out how to do with multiple data engineering Scrum teams, with data scientists, all focusing and working on this very hard problem of predicting the future.

Could I have done that without the funding? Maybe, but it would have taken us 10 more years to get there. And by then, who knows if we would have been totally disrupted already. So I'm glad we did what we did because we wouldn't have been so well positioned when this stuff started shifting in 2022 to be able to go and be where we are today in 2025. But I wouldn't recommend someone do it again, honestly.

Auren Hoffman (@auren) (53:20.738) Yep.

Auren Hoffman (@auren) (53:37.162) What would you record? So there are a lot of companies right now that are good companies. They're doing 20 million in revenue and 10, 20 million revenue. They're making a decent profit, making a few million dollars in profit. but they raised a whole bunch of money. and they're never, you know, they're never going to be worth the old valuation that they had. They might be worth more than they raised. they raised 50 million and they might be worth 70 million today.

But they might not be, they may raise 50 million and worth 45 today. What advice would you have for the company? What advice would you have for the investors who invest in the company, for the founders that run that company, et cetera?

Jager (54:11.0) Yeah.

Jager (54:18.157) Hmm.

I mean, I am very doom and gloom on this side. I don't know if I'm people are gonna love my advice here. am if they can't, if they can't find if they can't find that moat, I think the Grim Reaper is coming from them anyway. So now it's an opportunity costs question. And if you can get any value out of the business, I would pursue it.

Auren Hoffman (@auren) (54:28.204) Like, shut it down.

Auren Hoffman (@auren) (54:42.815) But like all the, none of the investors are going to be like, they're all, if especially the company's profitable, like, well, I want my money back. So don't sell for, don't want 10. I don't want, I don't want 50 cents on the dollar usually. So sometimes they still do it or.

Jager (54:57.653) Yeah, I mean, think that attitude starts to change too when when when market starts getting disrupt, like truly gets disrupted here. When AI builds these tools and the story is AI just wiped out these companies because it just wouldn't built it. You know, like I think investors like I'll take 50 cents.

Auren Hoffman (@auren) (55:04.525) Yeah.

Auren Hoffman (@auren) (55:13.614) Yeah. Yeah. But by then, by then they may only be able to get 20 cents or something. So it seems like a lot of investors, I know it's like they've got these 10 year orphans. They're just waiting. They're not being proactive. The founders aren't the founders aren't being pro. The founders aren't being, aren't sent it anyway. So they're not going to sell because they have no incentive to sell. Right. So it's just like, uh, yeah.

Jager (55:17.857) That's right. So that's the Jim and Gloom part.

Jager (55:35.607) Yeah, those are just zombie companies. that's the boardroom conversation needs to be. Yeah, there are. that's the scary thing of how our whole industry is about to change is I don't think they stay zombies because I think the customers go away unless again, there's some moat that protects that industry. But most won't. Because a lot of those companies, those 10 to 20 million dollar companies that can't grow, they're

Auren Hoffman (@auren) (55:40.994) There's so many of those, yeah.

Auren Hoffman (@auren) (55:48.001) Yep.

Jager (56:03.347) often workflow, we help you do this job a little bit better. I think those companies are done. So maximize the value when you can.

Auren Hoffman (@auren) (56:09.068) Yeah, yeah.

Yeah, yeah, I agree with you. I just don't think the VCs are going to do it. I mean, the VCs seem to be doing many things wrong right now in general.

Jager (56:20.472) Right. not. I'm not. If I was a VC, I would be taking a different approach to this whole market because you're right. the people don't want to accept the truth, but I don't think the truth is going to wait for them.

Auren Hoffman (@auren) (56:26.999) Yeah.

Auren Hoffman (@auren) (56:36.238) Yep. Yeah. Well, partially they want to accept the truth because they're they weren't they're their next fund. They don't want to take the right down right now. So I'll take the right down in a year from now after I raise it. You know, all this All right. This is great. A couple couple of personal questions we ask all of our guests. What is a conspiracy theory that you believe?

Jager (56:42.121) Right, right. Exactly. That's right.

Jager (56:52.599) I don't even know if this is a conspiracy theory anymore, honestly, but like I am, I'm a big believer that covert AGI already exists. That's right. So let's like everyone has ever said the military is always years ahead of us in tech, right? Like they, and let's a hundred percent like, but I've got to believe that

Auren Hoffman (@auren) (56:59.982) Covert AGI. Okay, walk us through this. Okay. Yeah.

Auren Hoffman (@auren) (57:12.194) They did? Except anyone I know who's ever been in the military. No, they've never said that. Yeah.

Jager (57:21.131) China, Russia and the US have at least programs. Let's disagree that they're trying to figure out how to use AI to go and further their cause. And they've been working this way longer than most folks know and probably have access to stuff that we maybe even illegally have taken access of things to go and build further with deeper resources, spend a ton of money. Okay, cool, $40 billion investment. Like maybe that's nothing compared to what's been invested.

behind the scenes. And so do I think AI is already affecting public policy? Do I think that surely it's driving propaganda and driving these bots? Do we really think there's some folks going and coding up some bots to go and make mass inputs on comments to go and drive public opinion? No. There's probably a really well thought out plan hiding behind some of this to go and start influencing these in a certain direction. And if that's...

Auren Hoffman (@auren) (58:16.566) I love this conspiracy because I'm so skeptical of it. like anytime I've done any, any type of, software AI data thing inside a government, it's just so frustrating. and, yeah, no, you're right. I mean, it's possible something somebody else is more competent that's out there.

Jager (58:20.138) Good.

Jager (58:31.094) It may not be ours. Like there's a good chance that we're not it. Like if I had to place my money, do I think China is doing that already? Absolutely.

Auren Hoffman (@auren) (58:40.226) Well, I definitely think they're trying, whether they're good at it or not, I don't know. It's a good question. But I agree. I agree. They're probably spending a lot of money on it, trying to do it. Why would you not? Yeah.

Jager (58:45.546) Yeah, and I.

Jager (58:49.63) lot of money to do it and right and and so is AI already affecting public policy is AI already making wartime decisions or investments in in tech like there's all sorts of interesting areas here

Auren Hoffman (@auren) (58:55.65) Yeah.

Auren Hoffman (@auren) (59:00.654) Yeah. I mean, certainly, I mean, there's been this whole trope that like, you know, Renaissance technology is, you know, developed this AI for a very long time and they've been using it to trade and stuff like that. And that makes sense to me. Like, you know, why, why would you tell anybody about that?

Jager (59:13.108) Well, you're okay with that, you're but like a government with infinite resources can't do that.

Auren Hoffman (@auren) (59:17.962) Yeah, I know, I know the people are renaissance and they're just extremely smart. Yeah. And a very, very capable people. And then they have motivations and there's a lot, there's not a lot of bureaucracy there. And, know, they all, they all get to see each other's work and stuff. you know, when you, when you get to government, there's just so much bureaucracy. It's so much like need to know it's just hard to collaborate and, you gotta, yeah. Yeah.

Jager (59:21.536) They're really smart. Okay, I don't know.

Jager (59:37.726) Yeah.

our government that's true. I just feel like there...

Auren Hoffman (@auren) (59:45.612) I'm pretty confident that the Chinese government has a ton of bureaucracy as well. Yeah. Yeah. But you're right. There might be some tiger team somewhere in, you know, Shenzhen that's like doing a great job. Yeah. Yeah. Yeah. I don't know. You might be right. I mean, I bet I'm sure they're trying. So it's a good point. Sure. All right. Last question. We ask all of our guests, what conventional wisdom or advice do you think is generally bad advice? And you can't say follow your passion because like 90 % of people have been saying that. And I

Jager (59:50.103) Sure, fair enough, fair enough. Yeah, a tiger team of like a half a million people. Right, right.

Jager (01:00:02.517) Hahaha

Auren Hoffman (@auren) (01:00:14.466) Just, I'm like banning that answer.

Jager (01:00:16.693) Yeah, that's fine. I wonder how many people have said don't go to school. I'm a big like don't go to school school school school is done. I mean, honestly, it's as soon as you can stop you should like there there and a lot of people. Oh the social like all my best friends blah blah blah. But from a skills standpoint you are learning nothing in school and I would argue in this may be the last generation where.

Auren Hoffman (@auren) (01:00:18.83) Yeah.

Auren Hoffman (@auren) (01:00:22.328) Don't go to school. School meaning primary school or? Okay.

Jager (01:00:45.151) people even go to college. That may be too bold, but it's definitely gonna be massively declining for the kids that are born today, whether they're gonna go to school or not. Because what is the reason they're going to school? What are the skills they're learning and are those skills applicable in the workforce? And the answer becomes none. There is no reason, because it's not gonna help me in my job. I think attendance rates drop.

Auren Hoffman (@auren) (01:01:07.256) Well, I mean, I think, I think it does depend if like, if you're already wealthy, like your parents are already wealthy, then it's like, it's like, great. It's like, you know, it's not, yeah, yeah. It's like, it's super fun. And like, yeah, it's great. And so I could see a great reason to go learn about all this stuff and meet with super smart people. And then of course, just like, you know, you might meet your spouse there and you know, it's like dating's fun and parties and everything like that. And you get to drink a lot and

Jager (01:01:16.083) Yeah, it's it's a party.

Jager (01:01:25.535) shirt.

Auren Hoffman (@auren) (01:01:35.554) You know, all these other things go to sports games. Yeah. Yeah, exactly. Like, I mean, that's, that is if you think of college as a bundle, right? Like one of the biggest bundles is social interaction, dating, finding people, you know, all this other stuff. Are you actually going to learn something in college? I don't, I don't know that people ever went there that much for learning anyway. And then, and then, and of course the piece of paper, what you're seeing is the piece of paper is going to be less valuable. Right. This is yeah. Yeah.

Jager (01:01:37.118) College is the new Tinder.

Jager (01:01:43.614) Right.

Jager (01:01:57.468) Yeah...

Jager (01:02:01.616) All of it is, yeah, there's no reason. If you're doing that, go to your local community college. It doesn't make sense to go and do it. And I think people are gonna...

Auren Hoffman (@auren) (01:02:09.794) Yeah. And plus you have a, you have a, you have a, now we already have a great tutor. I'm already using these AI tools to tutor me and stuff like it's so much better. If you want to learn about, you know, what, if you're, if you're willing to just spend some time with it, if you want to learn about the Peloponnesian war, like you will learn so much faster using it as a tutor than you will from like some sort of course or something.

Jager (01:02:25.556) Sure.

Jager (01:02:31.22) That's right. So what is like, and you say now, well, what about creative thinking? Hey, I can't do creative thinking. I again, I'm a believer that creative thinking is on the roadmap. It does an okay job. Fair, fair. So I think the kids are going to get pushed as like, go start your company as soon as you can. If the smartest chess players are done by 29, like you gotta be doing your brilliant business idea in your late teens and.

Auren Hoffman (@auren) (01:02:38.382) I think it yeah. Well, I think it already does, yeah. Yeah. As much as much as a human, yeah. Yeah.

Jager (01:03:00.084) AI will enable you to do that by the time that they're actually in their teams.

Auren Hoffman (@auren) (01:03:04.364) Yeah. Now you, how do you think about it with your own family? Like,

Jager (01:03:09.044) Well, I have no kids. That makes it a lot easier. But if I were to have kids, I would be trying to push them into, you know, start a company and get to 10 million revenue and sell it really fast. Sell it while you still can and live off that money. it's...

Auren Hoffman (@auren) (01:03:10.082) Yeah, okay, okay, just mind. Yeah, okay. Yeah.

Auren Hoffman (@auren) (01:03:23.916) Yeah. Or just do something, build a trade or just do something. Yeah. Just whatever it might be that's out there. Yeah.

Jager (01:03:29.169) Yeah, yeah, yeah. art, art, think will be one of the last ones to go. like now is maybe the time, especially if you're in a wealthier class.

Auren Hoffman (@auren) (01:03:34.157) Yeah.

You think art, I think art's the fastest one that's gone. It's like, it's literally been, what, really? It's amazing.

Jager (01:03:40.371) No. Well, that's what we're talking about. Like, business we're talking about. Like, are we going to hear a top 40 song come out of AI that will become popular? Absolutely. Are we going to go and

Auren Hoffman (@auren) (01:03:51.02) Yes, absolutely. I, the a hundred percent in the next 12 months that will happen. Yeah. Yeah. Yeah.

Jager (01:03:54.299) Yeah, that's happening. Do I think we're going to go to a museum filled with AI art and just marvel in the beauty? I'm just a little bit more skeptical. But is it possible? No.

Auren Hoffman (@auren) (01:04:03.31) Do you, but does anyone actually ever go to museums today at their home? Do you your museum in your home city or you're visiting another city? had nothing to do. You're visiting Rome. have nothing to do. That's what you're supposed to do when you visit another city. No one actually goes to museums. They go to the museum when they visit another city, which means they don't really go to the museum. It's like, it's just like, it's like the checklist that you do.

Jager (01:04:08.199) We've him like a couple weeks ago. What are you talking about?

Jager (01:04:14.009) I was busy in our city.

You

Jager (01:04:31.955) You

Auren Hoffman (@auren) (01:04:33.23) I'm in Amsterdam, so I'll go to the Rijksmuseum or something.

Jager (01:04:37.146) Fair enough, fair enough. But I don't see the AI museum except for a novelty. I don't see that happening anytime soon. oh yeah. Okay. Oh geez. All right. I can't follow you there. I can't follow you there.

Auren Hoffman (@auren) (01:04:43.34) Yeah. I went to an AI museum in London and it was terrible. have to say, but guess what? All museums are terrible. That's my, that's my controversial opinion. Like they're all there. Like the MoMA it's like so boring. It's like, my gosh. Okay. All right. Okay. All right. Well, this is great. Thank you, Jack McConnell for joining us on World of DaaS. I follow you at Jack McConnell on X. I definitely encourage our listeners to engage with the air. This has been a ton of fun.

Jager (01:05:03.186) Yes, sir.

Auren Hoffman (@auren) (01:05:12.398) Very fun, very controversial. Um, and I really enjoyed the conversation.

Jager (01:05:17.5) Good times, I appreciate it.