What do companies like Slack, Snowflake, and Crossbeam have in common? They are growing due to network effects from an unexpected source — B2B companies. As the third-party cookie dies and the modern data stack eats the world, a new class of companies is creating value by building network graphs that connect companies rather than people. Crossbeam CEO Bob Moore shares how an underlying B2B network graph impacts an approach to product management, from vision to success metrics and beyond.
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On Crossbeam’s Product-Market Fit
The idea for Crossbeam’s product-market fit derived from Bob Moore’s experiences at his two previous companies, RJMetrics and Stitch, Inc. On the market side, Moore’s team at RJMetrics kept running into the common problem of not being able to easily share data with other companies. On the product side, through his work at Stitch Scott realized the power of the emerging API economy and digital transformation.
“You put these two things together, which is, hey, we’ve got this data standoff problem that makes it impossible for companies to compare data across company lines, plus you have this new universe of enabling technologies that allow data to be extracted and structured and standardized and centralized. And you think, Oh, now there’s a window where you could actually build something new.
“And that’s what Crossbeam really is. It’s like an escrow service for data. It’s an independent platform that sits in between companies who are partnered with each other, and allows each site to connect their systems of record, like their CRM system or data warehouse. Crossbeam sits in the middle and takes care of all the hard stuff: the data ingestion, the standardization, the matching algorithms that allow you to compare data from different systems to each other.
“And Crossbeam handles all of the security, trust, and compliance controls required to get legal teams and security teams comfortable with a data collaboration environment that exists at scale, where you and your partners can draw these inner join queries between your datasets to answer big questions about whether or not you should collaborate, how to collaborate, and how that collaboration is going. So that’s the big vision behind Crossbeam.”
On Network Effects
With any product that relies on a network, a fundamental truth is the value is directly related to the size and scope of the network. Getting that network started can be a major obstacle due to what Andrew Chen calls the “cold start problem.” With Crossbeam, Scott and his team knew getting that ball rolling was going to be the main challenge.
“It’s almost like LinkedIn for data. If you join Crossbeam, and you want to get some value out, your partners need to be on Crossbeam as well. We should have really never had a first customer because when the first person signed up, there was really no value proposition for them at all. There is no ‘single player mode’ in the escrow service business that I just described.
“So network effect was going to be a hot topic. And network effects are kind of beautiful, and they’re also really, really dangerous. Network effect, at its core, is just this idea that a product or service actually gets more and more valuable the more people that use it. That’s a fairly simple core idea. But the thing that comes along with that is, in the very beginning, you have this huge cold start problem. It’s kind of like you’re pushing a boulder up the hill in order to get the thing going.
“For us, the metaphor we would always use is this: getting people to use Crossbeam is like landing two jumbo jets on the same runway at the same time, side by side. Because anytime a company signs up, we’re asking them to bring their partners with them, and also to convince those partners that they should sign up as well. And for the first couple of years, we really were kind of doing hand-to-hand combat out there in the market, trying to get this network seeded and get some momentum around it. But what was really exciting was that, eventually, that boulder made it to the top of the hill, and we started to see some compounding outputs.”
On B2B Network Graphs
Many of the most popular product companies today – Facebook, Airbnb, Uber – exist due to B2C customer networks. If a B2C network graph shows the connections between individuals on a network, a B2B graph is the same thing except that companies are the nodes on the graph, rather than people.
“On the B2B side, the relationships are relationships between companies. The best examples of companies with B2B network graphs that I like to talk about are Slack, Snowflake, and Crossbeam. Slack has this extremely popular product called Slack Connect that allows you to connect users and specific Slack channels between organizations.
“Snowflake has a really cool product called the snowflake data exchange. Snowflake is a cloud based data warehousing platform, used mostly for analytics. But there are some cool applications where more and more products are being built on Snowflake as well. But they have this thing called a data exchange where you can basically set up rules that allow other companies to query your data. And because of that, all of these data rules and permission sets and data views that get established end up forming a B2B network graph, which is like this set of connections that exist between companies that are really about the ways in which that collaboration can take place.
“And then Crossbeam is a pretty pure form of that same style of network graph, but again, with different applications. For Crossbeam, it’s about people aligning their go-to-market efforts across company lines, so that they can co-sell, cross-sell, do account mapping, etc., and allow that graph to grow over time.”