When HubSpot’s corporate development team was evaluating media company The Hustle as an acquisition target, they didn’t want to rely on ballpark figures — so they turned to Crossbeam to answer the question ‘How large is the opportunity here?’.
That level of precision is what helped seal the deal for HubSpot. The marketing, sales, and service software company acquired The Hustle in February 2021 as part of its strategy to become a source of education and information for a larger set of customers. The Hustle has over 1.5 million subscribers to its daily email and HubSpot needed to determine how valuable that audience is to its business.
“Using Crossbeam, I can more precisely identify the percentage of our base that is already a subscriber of The Hustle’s content,” says Greer. “That to me is a very helpful data point in defining the market size, because now I know, ‘Here are the types of customers that I can expect,” he adds.
In this post, you’ll get a behind-the-curtains view of how HubSpot leveraged Crossbeam as part of its due diligence process for The Hustle.
Compare Customer Overlaps in Crossbeam
The question about customer overlaps popped up midway through HubSpot’s due diligence process. If HubSpot had clarity on the number of overlapping customers it shared with The Hustle, it could more accurately estimate the potential value of the deal. Greer says, “It was like, ‘Oh, duh. Let's use Crossbeam for that.’”
HubSpot and The Hustle completed these four steps:
Step 1: HubSpot invited The Hustle to join Crossbeam and securely compare customer lists.
Step 2: HubSpot connected its CRM as its preferred data source for Crossbeam. The Hustle uploaded a CSV file of its subscribers.
Step 3: HubSpot and The Hustle created populations (groups of peoples or companies) from their CRM data.
- HubSpot’s populations: “all customers” and “all prospects”
- The Hustle’s population: “all blog subscribers”
Step 4: HubSpot and The Hustle shared data with each other about their respective populations. Both companies defined their data sharing rules in Crossbeam. Options include sharing the overlap count (the total number of accounts Company A has in common with Company B) or specific data fields like the account name, account website, and region.
From there, HubSpot and The Hustle created reports comparing:
- HubSpot’s customers with The Hustle’s subscribers. Too few overlaps would indicate a misaligned market, and too many overlaps would signal a weak market opportunity. “That was one of the most helpful data points because it was like, ‘Oh, wow. Yes, this is the sweet spot,” says Greer.
- HubSpot’s prospects with The Hustle’s subscribers to understand lead acquisition opportunities and begin thinking about go-to-market strategies (think: marketing/sales messaging and positioning).
Build a Business Case by Defining the Market Opportunity
There’s plenty of market data and research to help inform transaction prices and acquisition costs — but Greer wanted to get more granular.
“To assess the value of The Hustle to HubSpot we needed to know what type of relationship each of their subscribers already had with our business. Crossbeam made that possible. We segmented The Hustle’s subscribers by their relationship with HubSpot and assigned them each a value based on that relationship. The sum of those values was a factor in our decision to move forward with the deal,” says Greer.
By identifying the exact number of customers HubSpot shared with The Hustle, Greer was able to crunch some numbers that helped inform the final price tag for the deal.
“The data from Crossbeam actually helps to inform the business case. Our marketing team was particularly interested in understanding the incremental uptick in prospects or leads we might be able to generate from this [customer] base,” says Greer.
That data validated one of the hypotheses for why the acquisition made sense, and it was also used to forecast revenue potential and inform the final deal terms with The Hustle.
Greer says, “In a data-driven corp dev team, if you can prove the dollar value of a lead or prove the dollar value of a highly qualified prospect, Crossbeam can drive a very important part of that.”
“Crossbeam will become an increasingly important part of our diligence process as it relates to market sizing relevant opportunities for HubSpot and discerning where there is good target market overlap and fit,” he adds.