Subscription Data Research

Scott Galloway shares how he built L2, a successful subscription-based research company that sold for $160M by focusing on data collection and recurring revenue. The business model was deliberately shaped around factors that lead to higher acquisition multiples.

Key Components:

• Business Model Design:

  • Focused on recurring revenue instead of consulting fees
  • Charged $250,000 annual subscription for answering tough questions using data
  • Targeted luxury and consumer brands initially, then broadened the niche
  • Opened international office (London) immediately

• Technology Investment:

  • Raised $17M to build scraping tools and technology
  • Goal: Collect more data points than anyone in the world
  • Created defensive IP through proprietary data collection
  • Made data arguments undeniable through sheer volume of collection

• Strategic Focus:

  • Built based on research showing what drives 5-10x revenue multiples vs 1-2x
  • Key factors targeted:
    • Owning a niche
    • Recurring revenue
    • Technology at the core
    • International presence
    • Defensive IP

• Outcome:

  • Sold for 8x revenue ($160M)
  • Successfully hit top decile of valuations in industry