CB Insider is a predictive market research and market intelligence service provided to certain paid subscribers of CB Insights.
What We Believe
Industry experts typically use subjective, nebulous methods reliant on their sense of judgment or access to proprietary networks to understand where emerging markets are going, to predict company liquidity or financing events and to opine on corporate strategy. As Nate Silver has shown in political forecasting or Bill James and the more famous Billy Beane have shown in baseball, a scientific, systematic, data-driven approach can yield better predictions of the future than the more decibel- and pundit-driven methods that have unfortunately become commonplace. The creation of CB Insider has been influenced by the likes of Silver, James and Beane as well as the essay “The Hedgehog and The Fox” by philosopher Sir Isaiah Berlin (a short description is below for those interested).
CB Insider takes our data, other publicly available data and statistical models to provide forward looking intelligence on:
Company exit and financing events
Startup company performance
CB Insider launched to some existing customers in April 2013 but we’ve been working on the underlying strategy for this for nearly two years with the support of the National Science Foundation. Some early results include:
IBM acquires Softlayer – In April 2013, we’d predicted that Softlayer would be one of the largest exits of the year (via IPO or M&A) and that IBM would be a likely buyer. We’d also pegged a valuation range based on revenue estimates we had for the company of $1.9B to $3.4B. In early June 2013, IBM announced an intention to acquire Softlayer for $2 billion. More detail: Our initial Softlayer exit research brieffrom April 2013.
Tech IPO Pipeline- Our first public issuance of predictive intelligence was our Tech IPO Pipeline report which we released in December 2012. In the 6 months since issuance, 14 of the companies have exited via IPO or M&A for an aggregate value of more than $5.4 billion. In addition, 66 of the companies have raised follow-on financing totaling $2.9 billion. More detail: Tech IPO prediction results.
How Does It Work?
The Hedgehog and The Fox
In discussions about cognitive styles in decision-making, there is a familiar metaphor of the hedgehog and the fox (made famous by philosopher Sir Isaiah Berlin who penned an essay by that name).
The hedgehog when presented with a threat knows only one response – it rolls itself into a ball showing its spikes to its predators. This single strategy for all situations can be catastrophic for a hedgehog when faced with for example, an oncoming car. Foxes on the other hand have no single response to challenges, for they ‘know many little things’. They react to challenge by drawing on the breadth of their intelligence to devise a strategy for escape and thus seldom commit themselves to any grand, catastrophic plan.
Instead of viewing the world through a lens of a single idea (hedgehogs), CB Insider looks at it through a prism that includes many ideas and data points and recalibrates its predictions in light of new information. We hope and believe that we can provide our clients an unfair advantage using this approach.