HubSpot CEO and Cofounder Brian Halligan with Wufoo Cofounder Kevin Hale

So Brian, I've listened to a few of your podcasts, and on one of them, you described yourself as an introvert who likes to work from home. That being said, you've managed a public company. How do you mess those two things together?

That's a good question. I am an introvert, and I just try to manage it as best I can. It's hard to be an introverted CEO, anyone. The thing that's interesting about HubSpot is both founders are introverted, but one is far more introverted than the other. So I'm kind of introverted, and one of you has to be the frontman to the band, basically, and Darmesh, my co-founder, does not want to be that. So I have to kind of play the frontman to the band, and so I have to manage my introversion a little bit more carefully than he does.

Okay, and so what practices do you put into place?

Well, I have to manage my energy because people drain energy from me. So a couple hacks I have: every Wednesday, I work from home all by myself, just my dog and I, and no meetings, no calls, no Zooms, no nothing. I just work on projects, try to get caught up, and recharge my batteries. That helps a lot. I tend to take a nap pretty much every day around this time, actually.

Thanks for sacrificing for us!

Yeah, take a little snooze. We have a nap room at HubSpot, and I kind of think of a nap as like your brain is just running around, and lots of things are going on in your brain, and it's a time for your brain to just kind of settle down. I pictured these little mini men with brooms going around, sweeping up all the stuff and organizing it. Everything gets settled down in my brain, and then back to work in about half an hour. That works like a charm for me.

How does that affect your calendar management? Normal CEOs face a non-stop barrage of meetings and people you need to interact with. So how does that affect you, or how do you handle your calendar differently when you're an introvert?

Yeah, I basically just block all that day, Wednesday, so no one can book a meeting there. I have an admin that manages my calendar, and she'll typically manage little breaks in the afternoon, maybe at 2:00 or 3:00 or 4:00, which she'll know. If I have a packed day, I'm going to need a little breathing room to kind of catch my breath, take a nap, catch up on some emails, and kind of get back at it.

And then on a daily scheduled basis, do you leave in blocks for like solid focus work, or do you just leave it open to like, okay, I can interact with everyone every 15 minutes, you know, like that maker schedule?

I typically leave in like blocks of time where I can recharge and think and catch up on email and do some of that stuff.

Okay, yeah, that's always the part I struggle with—like the required socializing. As someone who's introverted, like it's part of the job, but I don't like to recognize it.

I can see that. Yeah. At what point did you realize you were going to have to do something differently to make that work for you? Like when you guys got started?

You know, when we both got started, we were in a place called CIC in Cambridge, Mass. It was sort of like pre-WeWork, and there was a couch outside our office. Every day, I took a nap, and everyone gave me crap for it. But it just worked for me. I think what helped a lot of introverts—I don't know about you guys—is when that lady wrote that book. What was her name?

Susan Cain.

Susan Cain wrote that book, and it's like, oh, I'm not as strange as I thought I was. Lots of people are like this, and they didn't feel as badly about wanting to take this time away. They didn't feel as badly as, say, saying, you know, I've been in meetings all day. I know we're supposed to have dinner tonight. Can we push it to tomorrow night? I'm just out of gas right now. I think a lot more introverts felt comfortable doing that after that book came out.

Yeah, I think labels can also be a crutch.

Yep, and I felt that after that book came out. It's like, sorry, I'm an introvert; I don't do this stuff. I used that crutch a little bit.

Yeah, a little bit. My co-founder uses it even more than I do, but yeah. But life goes on; you can be an introvert and CEO of a public company.

Yeah, absolutely. And so you guys met in business school?

We did.

Okay, so I'll tell you how we met. Great! It was then that the night before business school, at like a cocktail get-together at the Marriott Hotel. I was on my second Sam Adams—that's what we drink back there in Boston. A woman comes up to me, a blonde woman, and she starts chatting with me. I just assumed she was a student, but she asked me a lot of questions—like really pounded me—it was like an interview, almost.

Nice enough conversation; she goes away, and I just thought she was a student. But what was going on there was Darmesh; she was there with his wife—that was his wife! So what Darmesh does, my co-founders, he hides behind the plant in the corner of the cocktail party since is what you thought to interview potential people that he might want to talk to and then goes and chats with him. The scouting report on me was: you'll never like him; you two will never hit it off. He's head to the Red Sox; he's into the Grateful Dead. You don't even know who the Grateful Dead is, and you don't even own a pair of Red Sox. Like it's never going to work. That's how the two of us met.

And so what convinced him to go over to you?

We didn't actually chat that day based on the scouting report, but there was a class we took. We both went to Sloan together, and we sat next to each other in the class, and the teacher assigned a project on stock option pricing or something like that. He said, well, why don't we work together on the project? And we went out for Indian food that day, and we discovered we had a lot in common. We both like doing business with startups and small business owners and trying to turn small businesses into big businesses. Back then, we were into something that's passé now, but it's called Web 2.0—sort of an old meme that we're really into. And we were both very entrepreneurial; he had started a couple of companies, and I had worked in a couple of startups and done pretty well. So we kind of started on the journey on that project we did together at Sloan.

What was that project?

The project was about how to price and value stock options in a company.

Oh, fascinating!

Yeah, kind of. What I'm trying to think of is, like, after that, what was like the first little project that you guys worked on together that was like outside of school? You know, you sort of realize like, oh, we're the right ones to be working together.

Yeah, we started talking about HubSpot at lunch that day. It was something called Legal Spot, not HubSpot, which was going to be a suite of applications to help you manage your law firm. We tinkered with it all through business school; we put it in the business plan competition that was $50,000—now it's a $100,000 business plan competition. We worked on it in a class called New Enterprises. We tinkered with the project for a while, and then when I graduated a year before he did—actually, he was on a different track than I was—I spent about nine months in a little venture firm as the EIR. We tinkered with it. You know, we would meet once or twice a week and work on the idea and pitch it to law firms, and we kind of zigged and zagged a couple times.

And then during that time, we decided, well, it's not about building a suite of applications for a law firm. One of the applications we were talking about was a marketing application: how do you get found on the Internet? How do you get found in Google and social? How do you get found in the blogosphere? How do you grow business? All the law firms were interested in that. And so we pivoted; instead of being a vertically specific application for law firms, we were gonna build a marketing application for everyone.

What do you think your unique insight was at that point?

You're like, marketing—whatever. I mean, at the time, I'm sure there were way fewer companies doing Internet marketing.

Oh, so there were 17, and now there are 6,000.

Yeah, I think we were pretty good at framing it as everything in helps funds routed in user behavior. So normal human beings—how are they changing the way they live? How are they changing the way they work, how they shop, and how they buy stuff? And what does that mean for marketers? At the time, there was a sea change going on: there were two sea changes. One, humans were changing the way they worked; they were living in Google, living in social, living in the blogosphere. So there was a big shift there. The second shift that was going on was humans were becoming very good at blocking marketing—caller ID, spam protection, ad blockers, all that kind of stuff.

And so we came up with the idea that marketers needed to turn their PlayBook on their head. Instead of doing outbound old-school stuff, how do they pull people in and match the way they market with the way people shop and buy? That was the basic insight, and then we pulled it together in a suite of applications for mere mortals who would want to do this that didn't have a bunch of developers running around that could do it and grow their business.

And I think part of it was we framed it as this inbound thing versus outbound—that versus really works on the Internet. And the other thing that worked was pulling it all together and building something not for technologists, but for mere mortals. There's a lot more mere mortals out there than technologists.

And how did you guys contextualize yourselves and figure out pricing in the beginning? Did you—what was your pricing even like?

Pricing? We had no idea how to price it. I remember I came back from one of my meetings, and I said to Darmesh, I said, you know what? I actually think this guy wants to buy something from us. He asked me how much it cost, and he said, "Would you say sad or no? Let's just talk about what do you think."

I went back and forth, and we randomly came up with $250—very scientifically came up with $250 a month back then. So I back got the credit card later that day, that afternoon, for $250 a month, and HubSpot was $250 a month for the first like six years of HubSpot. We didn't change it at all, and then we got more sophisticated with our pricing, and now there's a lot of different products in price.

But what would you do differently now, like if you were to start over again and think about pricing, like knowing what you know now? How do you have thought about pricing?

I think I would have flipped it on its head. We had designed HubSpot to be a model where you sell it through inside sales. You use inbound to pull lots of leads in, hand them to inside sales reps, have them sell it. The most recent version of HubSpot these days, half our leads come through that; the other half really comes through a freemium model where people can try it, use it, bang on it, and then just like the consumer software, they will, and I think this will happen—all B2B enterprise software will turn to consumer software, where they'll come over a tripwire and they'll buy the software in a much more natural way, and sales reps can call on customers versus on prospects. So I would have started with freemium.

Hmm, and in what degree, like, was HubSpot the first customer? Did you have any software ready?

Yeah, it was—it was rough. Yeah, well, because this was also pre-AWS as well. And wait, pre-AWS? We built on .NET Nuke and hosted it on a server under a desk there. Yeah, and it was janky. And I would tell you the early days of HubSpot, the software didn't do much, and so customers would ask us for help.

And so we made up for the inefficiencies in the software by giving them good advice on how to optimize their website and how to get going and social.

And what we didn't want to fall into was the trap of building something that was a consulting company. And so we said all the stuff that we're consulting on—how to set your website up, how to get links into your site, how to set up your—and it wasn't even Twitter and Facebook; it was Digg and Reddit back then—how to get everything set up appropriately so you can grow. How do we take all that stuff we know and build software to do it, to automate it? That was basically the model in the early days, and I remember I had an early customer; the name of the company was CEO Dad.

It was a professional comedian.

Wait, what? CEO Dad?

CEO Dad! He's a comedian.

Is a comedian?

Yeah, Dad—professional dad jokes. Okay, and he was setting up a site, and our first sales guy, Mark Robarge, sold them on HubSpot, and he said, yeah, our co-founder he's gonna take—he's gonna get you all set up in the software, and he'll help you with anything you want. And I said, okay, that's interesting. So I got the account, and I helped him set up his blog, and I remember he wrote in his first blog-article, and he said, "Can you set this up and get it on the interwebs?"

I said, what did I teach you how to do that? And so a guy got him on the phone. I'm setting it up, and he said, "What do you think of my article?" Well, I said, I haven't read it yet. And so I read it, and I read through it, and I said the whole thing, and he said, "Well, stop!" He said, "Start reading it over again!" And he said, "I want you to read it out loud!" I read through the article—the thing of that, and he said, "Stop!" I said, "What?"

He said, "You're not laughing!" I said, "No, it's not funny!"

That was the early days of HubSpot—like not only helping people to set their blog up but actually like posting it and editing it. Launching up jokes!

Yes! Was there any feature that you guys developed in the early days that ended up being like this killer feature that all of a sudden, like change the directions?

Yeah, the SEO stuff we thought was pretty cool in the early days, and we built a tool called Website Grader.com that's very popular still. And that was an unbelievable tool. You go to our website, Website Grader.com, and you type your URL in, and you type your competitors, your own, and it gives you a score on how inbound your site is—how good are you at attracting links? How good are you at getting found in Google? How's your social media set up? How many followers do you have? All that kind of stuff.

What's the competitor check? The actual big thing that helped really drive people to actually want to change it was one of them.

Yeah, it was one of them because you put yours in; then you put your competitors in, then you taunt them. Yeah, or what I would do is I'd show up at a sales call, and I put your company in Y Combinator; and then I put in whatever, 500 startups, MassChallenge, and I would use that as information. That was really motivating to get people to move. Wow, and it gave us a lot of credibility.

I think about selling and modern selling. It's about helping people understand that they have a problem and really making that problem real to them. So in the early days of HubSpot, that was a tool to really point out why you're falling behind the competition—there's a lot of low-hanging fruit here; you're falling behind all these other folks. What are you gonna do? Oh, you need some help with that? Well, let me see it; let me show you a demo of our software. Sorry, how we thought of it.

I think another really cool thing that you guys do is that you eat a lot of your own dog food. You guys kind of try to practice as much as you preach. Is there anything that you guys initially had hypotheses around that didn't work out, that you're like, oh, we think this would be sort of a good thing to do, and then when you put it out there, it was like, oh, that didn't work out so well?

One thing that we thought for sure we were right about—one thing we were dead wrong about—we thought the whole world, we thought this idea of people having customized, gorgeous websites and bespoke websites was just a foolish idea. Like I don't have a custom car, for example.

Hmm, there can be a thousand templates out there; that's enough for the world to have. But it turns out, everybody wants their own custom website. In the longest time, we were like, stop worrying about the design. Use our template, put your blog on it, put your site on it; you're gonna be happy. We lost that battle; we fought that battle for years.

And at what point did it feel like you really shifted to a startup from a consulting company? Because in the beginning, you were spending all these extra hours doing things that you definitely can't do forever.

Yeah, it feels gradual. But yeah, in year and a half in, we were probably almost all software.

And at that point, were you profitable, or had you raised money?

We had raised a million in angel in Boston pretty early on, and then, yeah, we did a Series A back then.

What was the split between—like you talked a bit about like in the beginning it felt like a consulting company that you were giving all this advice. Like you said, you eventually turned that into software, but I imagine some of it was just turned into content that's sitting on your site. What was the suit between actual software features versus content you had on the site to help people just get going, like documentation, etc.?

I tried to get as much of it in the software as we possibly could. Some of it is hard to put in software. We also created a university, HubSpot Academy, and we made really high-quality, really nice videos to teach people about this stuff. We were a content machine, and I still think of HubSpot as a little bit like it's code; there's software, there's content—all that content out there—and there's a community around it. That's sort of how HubSpot works underneath the covers.

Yeah, I mean, because it makes sense with the website competitor comparison. If you get—what is it called again?

Website Grader.com.

SEO is such this vague, murky term, isn't it?

When you underrated marketing, it's the thing there is still. Yes, we had 10 million visitors a month through SEO—it's fantastic for us.

Fantastic!

Why do you call it underrated?

Because I feel like people know; do you think it's just people turn their attention away from it or just seem a little bit wait for it from it?

I think people are really focused on ads, and ads have gotten a lot better over time. People perceive that SEO has gotten harder over time. I just think people have lost focus on it, and if you do it right, it is a gold mine.

Yeah, I mean, that was a huge motivator for us—new YouTube versus just a podcast.

Yeah, because YouTube is just like, there's not a lot of good content out there. I mean, you've done some videos, but even once you get to the second page when you search your name, it falls off pretty quick.

Yeah, so you can just do it for anyone.

So I want to kind of get back to the beginning stuff, but we're going in the direction of trends, and I want to talk about that stuff too. So in terms of the future of marketing, where do you see the big trends happening?

Yeah, if I thought there was if the arbitrage opportunity when we started HubSpot in 2006 was generating leads online, I don't think that's the arbitrage opportunity—there's still an arbitrage opportunity there now, but there's a new one. And I'd like to describe the new one with my morning routine.

So I get up every morning on my Casper mattress; I put on my Warby Parker glasses; I take my phone, I turn on Spotify, and then I shave with my Dollar Shave Club razor, and I put on my trunk club outfit and then take a lift to work.

And what's fascinating to me about my mornings is those six startups—and they are startups—are all very much part of my life and completely disrupted the incumbents in those spaces. And they've done it with much lighter go-to-market models and a gorgeous end customer experience. And I feel like all those industries are being disrupted dramatically by people who are just better at customer experience—the step function better. And I think that's coming to B2B in a big way. Like if you haven't already figured that out in B2C, you're kind of—B2B, this is coming, I think, in a big way.

Well, what's a good example of that?

I think freemium is coming at it. I think the way Atlassian sells, the way Zoom sells—that's the future. You look at the metrics behind the Zoom IPO that just came out the other day?

Yeah.

Holy crap, they have virality, right?

Same with Atlassian; their model is fantastic. And so I think there's a new breed of software companies that have much—not only better go-to markets, lighter go-to markets—but it really matches the way people want to buy. People don't want to have to wait for your sales rep to book a sales call.

People don't want to have to do that stuff anymore. You want to go to your website; you want to be able to chat with someone, use the free product—all they get confused, chat a little bit more, buy it. Oh, you want to talk to our CIO and spread it? Great! Let's have a conversation then.

I think this transformation in the customer experience is coming to B2B, and I think it's an arbitrage opportunity today.

Yeah, well, I mean, it's the same people that are using Instagram on their phone or using your enterprise software, yes? So I think the way people buy Spotify is the way people are gonna buy enterprise software in the future.

All the new models are user-driven. The Zoom thing is fantastic; they are an unbelievable company! I couldn't believe the numbers on it. But Atlassian is another one that I think has it exactly right.

Interesting answer! When it comes to actual outbound or inbound marketing trends, what other stuff do you think?

Outbound is largely just dead. Okay? I don't think cold calls work at all. In fact, I think they're negative. You cold call someone, and they don't answer the phone, so you leave them a message, and then you follow the methodology that's out there. And you cold call them again three days later, and then they tell you, "Cold call them again three days later," and all you've done is just ruin your brand.

I mean, you've really pissed that person off! And so I don't think that outbound works. I think inbound—I just stretched the definition of inbound. Really creating a lovely experience that matches the way people actually want to buy today.

I also just think in the world today, the other thing that's changed is supply and demand has really changed along every dimension. It used to be really hard to start a company. Back in 2006, it was hard; it was expensive. You needed to get an office space for a year; you didn't have AWS. It caught—the startup costs are amazing now; startup costs are incredibly low.

You can go to Y Combinator; you go to—you name it—everything is cheap, almost free. And that's great; it's never a better time to start a company. The downside of that is it's never been a harder time to scale a company. Really hard to scale. Really hard to break out. You guys see it more than anyone, I'm sure—it’s very, very hard to break out in today's day and age. It used to be, how did you break out? Well, you need to have a better product; your product has to be ten times better than the competition.

Today, the way you break out, it's hard to do that on the product side. You can get in front of your competition a little bit; wow, they catch up quickly. The way you get ahead of the competition is create a go-to market experience that's ten times better than the competition. That's the way I see companies winning today. That's how Zoom does it; that's how Atlassian does it; frankly, it's how HubSpot does it.

This is kind of the future I think. In B2B, I think it's almost the past; B2C, people have figured this out already.

How do you apply these ideas to startups with little or no funding?

I just don't—I don't think you need a ton of money today to build a great customer experience. It's not something that costs a lot of money. Creating word-of-mouth doesn't cost a lot of money. I think old-school success these days is much more about the width of your brain than the width of your wallet. I don't think you need a ton of dough to grow your company, ad dollars or not—that's the most expensive way to grow a company, and it's not a good way to do it. There's an argument to be made that for a lot of young companies that like to do inbound right, it's actually a good long-term investment.

But in terms of getting short-term sort of growth and getting results on a week-to-week basis, which a lot of times we're working with our companies to do, yeah, it's really hard to like have that investment and sort of hold off on sort of outbound stuff. And so I'm just wondering, what are ways that people could think about doing inbound that helps them get that sort of like results that they need—sure, maintain momentum?

It sort of depends on who you are, but like, I remember the early days of HubSpot. Darmesh and I would write two blog articles a week, and we'd compete to see who could get more leads from the article. And we can—and we had very friendly competition. But we used to do that, and we figured out, you know, you have to write really good content, of course—that's table stakes. You have to have a great title, and with A/B test the titles a lot, and you've got to get it. You've got to yourself have a large presence in the social media sphere, so you yourself could market it. Maybe you could do that through some of your friends as well, and you could get it, and once a week or so, we would have a home run blog article, and that's how we really started the company.

How long did it take before like you got to be seen as experts in your sort of space so that people would listen to you and be like, oh, I should try their tool? Because for us, still working on it, like it took us a couple years—like we basically built our audience on a blog before we even started writing the first lines of code for our startup.

You're talking about four—yeah, four with him. We had started this blog called Particle Tree, and we literally didn't know what we were gonna do. But we heard these guys at 37signals—they basically did their blog first. We heard they ran Basecamp, and I was like, oh man, that's a pretty good plan! So that's what we started. It was like we could do that at the beginning.

That's what we do. And I feel like a lot of people do undervalue that—like do something to build an audience way ahead of time. They get very impatient or think, oh, my first couple blog posts are just gonna be a home run, and usually it's like it takes a really long time!

So for you guys, how long did it—

It didn't take that long! You have to write really good stuff; it has to be timely.

How did you know what was good?

Because I think everyone's bar is so different.

Yeah, I think at the time we were writing, there was not much content out there about how do you market properly on the Internet from mere mortals. I think what was also out there was, okay, I'm not a big Donald Trump fan, but what Donald Trump has mastered is the versus on the Internet. He's used polarization to his advantage; polarization works on the Internet, and we did the inbound versus outbound work very well. It made the argument really easy to understand—I mean, it's camp to a tee.

Yes, so like narrative generation in terms of you versus opposition—like understanding as well as quantitative stuff. We did a lot of quant stuff that we posted online; we’d take analysis of those website grader reports, we’d post them online; those were very interesting. We did a fair amount of quant stuff.

Today, if I were doing—I might do the blog; I would tend to do a podcast. Podcasting, people spend time listening to podcasts; you've got to match the way you're marking to the way people buy. I would be tempted to do something—videocast for your own YouTube once a week, something like that. I'd be all over Instagram; I'd be all over Twitter; I'd be all over the new stuff.

I tell you what I wouldn't be—I wouldn't be all over ads. I think of it like this: what an ad is, let's say I want to put an ad on your—I want to buy an ad on your shirt, on your podcast. It costs me whatever it would cost. I'm essentially renting space on your podcast, right? I've rented it once; I can get the space.

Why should I do this? What I really want is I want to say, yeah, your podcast is great; I want to create my own podcast, you know, where to rip myself space on the PAC's console. That's the basic idea behind it.

And it used to be really expensive to start your own radio station. Holy crap, I got to buy a ba-ba by whatever the frequency, and I got to get a studio and all this stuff. Now it costs you nothing! I can start a radio station today.

There's been a big disruption in the content creation industry. If you can create good stuff, man, it's a big arbitrage opportunity.

And when you guys got started, were you blogging for yourselves or for the company? 'Cause this is a question I often get from founders: like, should I come out here as like Brian Halligan or should I just be on the HubSpot blog?

You should do it on the company's blog.

Why do you say that?

Because you're building a company, and you want the domain authority flowing into the company. You want those links flowing into the company. You want to associate your brand with the company in a big way. You don't want a separate domain for your name building up all this domain authority; it doesn't help the company enough.

I think the guys who were pretty good at this were Andreessen Horowitz, and they did it—I think they did a 16z slash the person's name. O.P.P. Market had a blog; he did Be Soda; so did P.G. And then they moved it.

Yeah, she has not—they moved, and she's always been on his own, which I thought was a good model. Those guys did a hell of a job in the early days on their blog!

Really?

Oh, yeah!

Yeah, and they've stopped.

Yeah, well, there's podcasting, you know, YouTube now. I miss Andreessen's Twitter account too; he's really good.

Do you have any other advice for startups with little to no money?

Find a good co-founder.

Okay, and so how did you know that your co-founder was right for you?

I didn't know! I think what happens—I spent a lot of time at Sloan, and I just see the co-founders typically; they start the company with someone who has the exact same skill set—like two product developers or two marketers or two former McKinsey people.

I think you're better off with somebody who's really on the product side and somebody's on the go-to-market side, and they have a little overlap in the middle, and they have similar passions and goals. I think it gets dangerous when they have the same overlapping skills, and we had a nice overlap there.

Was that your story with your co-founders?

Kevin, all three of us coded, but all of us had different domain expertise. So Brian did a lot of the backend stuff, some frontend stuff. I did all the design and coding work, and then Chris basically was willing to do whatever. He was a good soldier.

So he was like, I will do all the [ __ ] work! So he was like payment integration—fine, I'll do it. I said, if it's an opportunity for a bunch of weird social media or like paperwork said her kids too, I'll do it. And so he was one of these, like, blessed founders to have where he was just like, I'll do anything that needs to be done to make the company successful!

Was he non-technical?

No, he could program.

Oh, wow, so that was like kind of amazing! We were really lucky!

Yeah, that's super rare!

Okay, so in another interview, you said the Internet disproportionately benefits small businesses over big ones. Why is that?

Oh, it's like that old New Yorker cartoon—a dog typing on the computer, and there's a dog looking over his shoulder, isn't typing on the computer, and the dog on the internet says, you know, the great thing about the Internet—and the other dog said, what's that?—he says, "Nobody knows you're a dog."

And it's very true. You can get an outsized marketing advantage on the Internet without a lot of money. You don't have to be rich to grow a big company, whereas back in the day, to get noticed, you had to buy ads. That was the only really way to get noticed. Or you had to cold-call into people.

You can now create content, and if that content is really good, it'll spread. You can create a freemium application like that website greater thing or HubSpot CRM or Zoom or whatever you think, and that can spread much more easily and virally these days.

Okay, but now that you guys are a big business and you can do those other things, how do you keep your company hungry to do those things that are like kind of weird but might have an outsized impact?

I think the hunger comes from like we've done all right. We've got a $7 billion market cap, but who do we compete with?

Well, we compete with Adobe, Salesforce, Microsoft—you know, those companies are hundreds of billions of dollars in market caps.

So it's hard to get cocky when you're competing with those giants.

In terms of continuing to want to stick with the content stuff and with the long-term stuff, there's—I just see so much long-term value in like if you look at where our customers come from today. They come from search engine optimization; they come from our freemium.

A very small percentage of them comes from ads we do on Facebook and Google. And those are assets that we built. We talked about assets before—whatever I'm renting space on your asset or creating my own asset—assets we created 7, 8, 9 years ago are still generating leads for us today.

They're permanent assets on the Internet. As a marketer, as a seller, you have an asset balance sheet just like a CFO's, but on your asset balance sheet—links into your site, followers on social media, pages on your site. All that kind of stuff are assets. If you get a viral model, the number of users you have is an asset; it will spread from there.

So you want to increase the number of assets you have and the return on them. I don't like the game of renting assets.

Okay, and in content, obviously, has been a core asset?

Yep, from the beginning, freemium has been a core asset over the last three, four years.

Okay, yeah. What do you mean by freemium as an asset?

Because I can understand content as an asset, but freemium as an asset seems like it's more like a strategy.

Or I think it's probably more of a strategy; I just think I look at where our revenue comes. I'm gonna have to content and half through freemium, I guess, but you're probably right.

And then how do you think about freemium? I mean, like from your perspective, you're able to understand freemium in a very different and numerical and quantitative way.

That's so different, because like I feel like the experiments that you can run and the things that you can assume as a small startup is—it's just you're really in the dark. And I feel like a company of your size, you probably understand freemium in a very sophisticated way.

That's true; we started our freemium business about three years ago. So our sales products all freemium, so it's kind of an interesting story: HubSpot started as a marketing application I talked about—it's $250 a month—and it was kind of an inside sales model.

We wanted to go into the sales CRM business, and we said, well, there's a lot of competition there. Let's build a better product, but let's build a lighter go-to-market. So we said, let's build a freemium business.

So we kind of started as a separate business inside of HubSpot, a separate part of the building. I moved to that part of the building. I had a co-founder, and we worked on it in there. And back then, we were like an early-stage company; we had a very lightweight, not very strong yet CRM product.

We started getting users in; we started to measure, you know, okay, got that user—how many clicks did they go into the app? Were they sticky? Did they stay through? What amount of time? How many other people do they invite? And we've just gotten better and better and better at it over time.

So you have to kind of start somewhere.

Yeah. Start with yourself and your cousin and your sister and your brother. You can basically give them the application, tell them to talk out loud as you're going through the application, tell them where they get frustrated, and just keep—it's a very iterative process, and we're by no means done.

I one thing I've come to understand while working at YC is that freemium won't work for every company, mostly because like what it requires is a very, very large market.

And so like I think for marketing software, I was lucky to be one with like form software; I think website creation, etc., the market—so here's like every company's needs one of these things. And so therefore, it's okay to give away the product; it's sort of this inverse model of like free samples so that way that small conversion, you're still making money off of a piece of the market—that's so huge.

When a company is a little bit more specialized or the market that they're going after is a little bit smaller, how do they rethink their sort of pricing and model?

Because you guys started off doing sales, which is what a lot of those companies will have to do.

And so I don't know; I think you're a very niche e-business. If you're in the business of—I don't know, there's only a hundred potential customers in the world and the CIOs of the car companies, you might make an argument that that's not the best way to market.

But if those CIOs are making the decision based on how everybody's using your product internally and all the influencers coming at them, it still might be a good fit because I don't know. Almost every company I know, CIOs are making decisions not anymore based on top-down decisions, but they're looking at who's using these applications, who using these pieces of software, and who's lobbying them to make those decisions?

These decisions become bottoms up! Our CIO doesn't make any decisions unless someone in some line of business is screaming at them, hey, we need to—we need to have this piece of software.

It doesn't also—the CIO slots a lot of power. It used to be you have to get approval to get on their network; that doesn't happen to have to happen anymore.

Yeah, yeah! I mean, you start with GitHub! That was the first time I saw it was like almost everyone was using GitHub by default; Gmail, Slack.

Yeah, never better or worse—Atlassian!

Yep! So in terms of other assets, I'm curious—now that you guys have been around for 13 years, were there any things that you thought might have been assets or basically like foundational elements that weren't ideal ten years later? You're like, maybe it was a cultural thing—things that you would have changed from?

But you know, one of the things I would have changed is I would have—I think CEOs are reflections of their founders, for better and for worse. And I'm not a product person; I'm not a developer. I grew up in sales and marketing.

And so if you look at HubSpot in the early days, holy— we had a hockey stick customer curve that we were really proud of, and we used to raise a lot of money, and we used to brag a lot and use it with our investors, but our churn rates were high. Our customers weren't happy enough, and we got very, very good at showing up and closing customers on the first call, but we weren't great at delighting them and making them be very happy.

And we used tools like longer contracts to lock them in—that's not the right way to lock them in. You got to actually make them happy and tell their friends. It took us—took me a long, long time to figure out the way to build a great company isn't to get great at that but at delighting these customers and getting the word of mouth to spread.

And so our DNA early on was sales and marketing heavy, not customer-product light happy, and we've really shifted it. We wouldn't be sitting here unless we made that shift.

Yeah? What was the main thing you guys sort of implemented to help reduce that churn and create that sort of delight?

Just investing more in product. Like if you looked at our P&L in the early days, Kevin, a huge amount of our P&L was going into sales marketing; a relatively small amount was going into R&D.

And you just look it up for the last few years. We're increasing R&D spending by 50 percent a year; we're increasing sales and marketing spending— I, you know?

Something! Did you have to change it with in terms of like when you were talking to PMs or talking to people about like, hey, when we're designing new features and we want to solve this? Did you like put like this is the number on the wall and like we're rewarding people who are solving?

Yes! One of the big things we talk a lot about is—I would specifically talk, and I would cringe, for our salespeople about how we're moving from a sales and marketing company to a product-driven company, and we're moving from a company that is obsessed with the company prospect relationship to a company that's obsessed with the company customer relationship.

We sort of shifted our DNA there, and we changed all our company objectives around it— our compensation plan for the executive teams around NPS, for example, things like that, and genetically we've changed, but it's been a hard change.

And I think we'd be much farther ahead if I had realized that earlier.

Why was it a hard change? It seems like it makes sense to do so; is it because it was so sales-emergent before?

Just, yes, the DNA and that, and the strength in the company, and the budget negotiations—it was so sales heavy.

And in the input into the product development roadmap was very sales heavy, like here are the things we need to do to win new customers. First is talking to customers—here are the things we need to do to delight them—that those were big changes we have to make.

Can I ask about voice? So when it comes to this content creation, sometimes I think a lot of founders and companies have difficulty with it's like, how do I create the voice of my company?

And then when I'm writing out this content, because like there's all these different ways that you can sort of do this.

Yeah, and I feel like I've seen lots of companies do it incorrectly.

Okay, that's no one's asked me that question before. It's interesting!

In the first year and a half of HubSpot, we had a relatively geeky voice. We had just graduated from business school; it appealed to a certain crowd—more biz/business school geeks, let's just say that.

We hired a marketing person who was good, and he started writing on the blog, and he shifted us to be more, I don't know how to say, but more just basic stuff that everyone can understand—the fundamentals, yes!

Then he would say we want mere mortal marketers to understand and spread this stuff, not just your professors from frigging.

So it was like technical or was like quant stuff?

Our stuff was quant and lots of stuff from like Michael Porter's five forces analysis of that [ __ ] like that! Some people really liked it, and it’s a little bit like Thomas—I don't even have to say his last name—the guy from Redpoint; his blog is really good. Stuff like that that we would put in there, and we got much more down-to-basics of like how to—you know, how do you create a great blog article? How do you do SEO correctly? How do you—I don't know what it would be, but just very, very basic stuff.

So we shifted our voice, and we're still pretty basic now, so we're trying to appeal to the mainstream of sales and marketing; sales and marketing ops people. Yeah, we're not really trying to appeal to the CEOs and whatnot.

Did that shift happen overnight? So you hire this marketing person; they say, hey, I want to switch up the voice. Was it immediate?

Because I think you see exactly the—what—

It took a while to convince us.

Okay.

He had to lean on us, and his articles were doing better than our articles, really needs, right?

So ultimately, you fell onto the numbers and you're like, hey, this news writes—

Okay.

And then what about the other shifts in the company? 'Cause you're talking about, all right, we're shifting away from just being this pure sales approach.

Yeah, you're an early startup; you're gonna have some metrics, but like what are other ways to kind of like have a mirror put in front of you and be like, oh, this is not working?

Yeah, we were very early on. We were just trying to move visitors, leads, and customers—those are the three things we looked at, and we looked at them quite often.

We had a weekly meeting every Friday, and we'd go through those numbers, and then we'd go through the list of customers and would say, how are they dealing—happy or unhappy? And way too many unhappy in the early days, but yeah, very early we looked at visitors, leads, customers.

Okay, we didn't look at churn; we shouldn't have looked at churn!

Okay, and then later we really got obsessed with cost to acquire customers in total lifetime value of customers and what's the return on that cost to acquire a customer?

That's not very helpful in your first year of a startup.

No, it's challenging!

Did you, uh, have you ever had a coach?

I have had a coach, yes!

Okay, yes—still?

No, but I had one for a few years there that was really good, and he was a Park Coach—Park Shrink! He's a professor at Columbia—really good guy. And we hired him to coach me, and helped me improve, and he was really good—really good!

One thing we do—this is helpful—is every year we do a very aggressive—I would say the most aggressive 360 reviews you can imagine. So my review every year—it's done.

It was 30 pages long this year, and Darmesh writes it after surveying lots and lots of people, and the first 16 pages are the things I'm doing well, right? Here's your strengths, and I've read the first 16 pages of them, I'm confident I'm the CEO in the world. I've got this many chairs, you know, that's what pages are the bucks, and he categorizes the bugs as new bugs or this used to be a feature, now's a bug, and it's incredibly helpful.

And so I've got that every year, but working hard on it—trying to get better, and the coach helped me a lot with that. It's an unnatural act to run a company, I think, at all, and it's unnatural and unusual to move from early-stage startup to a—yeah, we're kind of a mid-stage gala, but call us right now—and the company goes through lots of changes and you have to change along with it, and it's a challenge, and I've had a lot of help along the way.

Yeah, what have been the other challenges? Because like, even in this spectrum of time from like 2006 to now, now you're this like public face who's tweeting thought pieces for the company basically.

Oh, I always did that [ __ ]!

Okay, so what have the other changes been that you've had to like kind of will yourself to go through?

Aaron Levie actually had a great quote—I'm gonna mess it up—but he said something the fact that in the early days of the company, your success is dependent on your being really good at everything.

Okay.

And in scale-up mode, your success to the company is you're getting the heck out of the way so other people can get really good at what they're doing, and that's been a challenge.

Your biggest strengths as a founder is typically that you're a control freak, and that greatest strength turns into your greatest weakness kind of in scale-up mode. That desire to control decisions, desire to control organization, and I think almost every founder, if you're a good founder, you're probably a control freak—you have to shake that somewhere along the line.

At what point did you—almost like the hardest thing that you had to give up?

Okay, for a long time, I wanted to be the head of product at HubSpot, and I was, and I made a lot of product design decisions and a lot of product roadmap decisions. Did you give it up because it's what HubSpot needed, or did you give it up because you realize like you're needed elsewhere?

I gave it up because I wasn't very good at it, and that 360 review process and lots of feedback was like, Brian, you just—genetically, you're just not that good.

I'm the opposite of your background; I'm the exact opposite. And I thought I can figure it out; it can't be that hard. What Kevin does—it's extremely hard what Kevin does!

And like the talent of Steve Jobs—you can read about it; you can watch the movie, but those are very rare talents that people have, and I think some of them are genetic, and I just didn't have them. So getting out of that and getting someone who ran product that I really trusted—that was a big transition for the company and myself.

How do you sort of develop that humility sort of muscle? Because I think a lot of people in charge have a really hard time in understanding that I need to be in a place where I realized that bringing on other people is really about me asking for help and being a little vulnerable for the company.

And so like I imagine like part of coaching and part of doing all these things and doing a 360 review where you actually get honest feedback is about like, oh, I understand that I'm not gonna be perfect.

And so do you do things or exerciser or read anything that like helps you develop that muscle? Because I know I have to work on it constantly.

I think this is a humility gene in the DNA at HubSpot; I think it's a humble company. I don't know how or why—I think there's always this feeling that we're just getting started and there's so much more we can do.

I just think it's been part of our DNA from early on, so I don't know.

Yeah, we just, if one of your cultural values when you guys hire or look for people?

Yeah, humility is a big part of it.

The humility is an interesting thing—like I've been out, so I think I told you I’ve been out in San Francisco for the last month. I do feel like in San Francisco, there’s a sea change going on.

Like the old guard people who ran companies that started, let's say, in the 90s early 2000s, there's a certain personality there, and it's very different today. I'm noticing the founders of this generation of companies, in my peers and younger, there's a lot of humility out there.

I've been surprised at the humility! Like I met the CEO of Gainsight today for lunch, Nick Mehta. I met the CEO of Zoom last week, and they're just very humble; it's like there's been a personality change in the CEOs over the last ten years.

It's really interesting what's going on!

Then from Pinterest, he's my favorite! I have never met Ben from Pinterest; he's like one of the most humble and down-to-earth people I've ever met, and he's someone I always aspire to.

That's it! I noticed it out here—all the folks I've met have been wonderful, humble, down-to-earth people, and they're the exact opposite of the previous generation who were, you know, a might-my [ __ ] don't stink generation—really cocky.

And that's how, you just got things done back then; it's changed.

It's nice to see, actually!

Yeah, we have mindfulness billboards now!

Cool!

And, all right, thanks so much for coming in!

Thanks for having me!

Brian!