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Jigsaw, a company whose 900,000 users have built a database of 14 million business contacts, says it has found a winning business model — by offering access to and services around that database, the company claims to have hit profitability for two consecutive quarters, and to have doubled its revenue for the fourth year in a row.
Chief executive Jim Fowler says San Mateo, Calif.-based Jigsaw is trying to build a new business model around the idea of a “data as a service,” in the same way that Salesforce.com found success through the software-as-a-service model. In other words, where customers traditionally pay a one-time fee to a database like Hoover’s for a specific set of contacts, Jigsaw sells its customers continual access to the data for a subscription fee. That means customers have access to data that’s continually updated, while Jigsaw gets a constant source of revenue.
More specifically, Fowler says there are two big pieces to the company’s business. First, there’s the Jigsaw website itself, where people purchase contact info using “points,” which are either earned by contributing to the database or purchased with money. That was the company’s initial source of revenue, but Fowler says it’s not more than 15 percent of the total at this point. The real business is in selling services around that data to companies, most recently with its Data Fusion product, which synchronizes the contact information in customer relationship management (CRM) systems like Salesforce.com with Jigsaw’s database.
Jigsaw currently has almost 1,000 enterprise customers overall (only 40 of them are using Data Fusion — the number is relatively low since Data Fusion is a new product). Now that it’s profitable, Fowler says the company needs to focus on continuing to build out its database (he estimates that a full database of US business contacts would include about 50 million contacts), and to keep adding customers; he argues that there’s no reason Jigsaw shouldn’t be able to get as many customers as Salesforce.
“If we continue to double our revenue every year, we may be filing for an [initial public offering] next year,” he says.
The company has raised $18 million in venture funding from Austin Ventures, El Dorado Ventures, and Norwest Venture Partners.
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