00:05customer relationships are the lifeblood
00:07of every business and CRM a key system
00:09of record for every business is facing a
00:11sea change riding those waves is HubSpot
00:13one of my hero companies A unlikely SMB
00:17marketing software startup founded in
00:192006 in Boston has over almost two
00:21decades become the primary Contender to
00:23sales force through brilliant strategy
00:25and consistent execution and it's as
00:27much a community and a movement as a
00:29business they've recently made big bets
00:31on AI today I'm sitting down with Brian
00:33helan founder longtime CEO and now
00:35executive chairman of HubSpot to discuss
00:37learnings from the founder Journey
00:39staying Innovative as an incumbent the
00:41impact of AI on workflow software and
00:43his new mission in climate Tech with
00:45propeller Ryan thanks for doing this
00:47welcome to no priors thanks I have two
00:49questions for you shoot why were we an
00:51unlikely success oh uh I hope that is
00:55not offensive I guess because of Boston
00:57I I think because of Boston because
01:00because in 2006 time period the
01:03companies you must have heard this from
01:04VCS the markets that people thought were
01:07worth going after were like high-end
01:10Enterprise in a small number of
01:12categories yeah right and so the um the
01:15idea that you'd sell software for smbs
01:19to manage an online presence and do
01:21social like that that felt unclear that
01:25you'd become a you know $25 billion plus
01:28business it was clear to us
01:31that's what makes you the founder okay I
01:32have another question for you you you
01:34referred to us a hero company by the way
01:36I'm honored like what's number one on
01:38your hero list oh man I'm I feel like
01:41I'm gonna offend friends if I choose
01:43one what's your criteria if I think the
01:47product has changed the world if I think
01:49like the the people just made really
01:51interesting decisions okay I'd probably
01:53say like but this is just cuz it's the
01:55one I'm closest to figma yep I have a
01:57lot of admiration for Dylan and Evan and
01:59like I think they changed how a lot of
02:00people worked and it was also like not
02:03obvious at the beginning no no I am with
02:05you on that but yeah good questions I'm
02:08supposed to be asking the questions this
02:09supposed to be easy for me
02:11Brian all right fire away okay so Brian
02:15you you actually started I think as a
02:17sales leader for PTC like famous
02:20Enterprise sales organization in Asia
02:23how did you go from that to the founder
02:26of HubSpot I actually started as ptc's
02:29first and its headquarters in Boston and
02:32moved into sales and channels and then
02:35they they were the company was going
02:37incredibly well and they moved me over
02:39to Asia to start it so I mov to Japan
02:41and I Liv in Hong Kong for a while and
02:43um yeah I worked there for 10 years it's
02:45a really good run um but I just think of
02:48my I have three chapters in my story
02:50chapter one was PTC Enterprise sales eat
02:54your young really a hard charging
02:57culture sales-driven culture
03:00um terrific company in own ways U
03:03unusual culture tough place to work I
03:05left there and I had a second chapter
03:08that couldn't be more different started
03:09the sales organization for a company no
03:11one's heard of anymore called Groove
03:12networks and groove's famous for its
03:15founder a guy Nam Ray AI who's the
03:16father of Lotus Notes and it did okay
03:19like we got the 20 million in revenue
03:21and Microsoft bought it and it's like a
03:23little part of SharePoint now but it
03:26really didn't tip and and what was was
03:29interesting about that company and
03:30learnings for me was Ry was a product
03:34person and the company was very much a
03:35product company and he referred to
03:37himself as a social Anthropologist which
03:39I thought was really interesting he sort
03:40of watched where technology was going
03:42and he thought about how human behavior
03:44would change and then he tried to create
03:46something kind of in the future to to
03:48match it and he did that with notes sort
03:51of hit the nail on the head he did it
03:52with groov was a little early Groove was
03:54like a little bit of Dropbox a little
03:55bit of slack a little bit of notion it
03:57was PE on peer-to-peer platforms just a
04:00Microsoft bought it but I learned a lot
04:02how to Envision and build compelling
04:04products he was very early on product
04:06like gross premium model and I don't
04:07know anybody else in BB was really doing
04:09that at the time and so I get to we
04:11didn't figure it out by the way but we
04:13got to learn a lot along there and then
04:15I went back to business school and those
04:17three sort of you know this sort of
04:20right- wiish PTC the sort of left- wiish
04:22GrooVe and the sort of Back to Basics
04:26MIT came into my head and really
04:29influenced me personally and I think
04:31still influence HubSpot in a lot of ways
04:34when I say unlikely I just think it's
04:35actually amazing that there was this
04:38idea that was happening out in the
04:40market like a change in the world you
04:42should describe it but the way I think
04:44of it is like people don't want to be
04:47advertised and sold to right they're out
04:49hunting for solutions they want to be
04:51educated and this thing around inbound
04:54marketing around creating a presence for
04:55people to come find you and and giving
04:57that value to your customer your end
05:00users like you really created that
05:02category like how did you even discover
05:04the idea um tell us about the beginning
05:07we started in business school um there
05:10were two ahas that led to it and I have
05:13terrific co-founder Dar mes had one and
05:15I had one mine was while I was in B
05:19school I was sort of an eir at a little
05:21venture firm that was going nowhere in
05:25Longworth and they had me working with
05:28their startup to help them teach them
05:30the PTC way you know how did you build
05:32PTC can you show us the Playbook and
05:34they all were doing the PTC Playbook
05:36they were all buying lists and cold
05:38calling they were all buying lists and
05:40spamming people they were all doing
05:43other people's straight shows they were
05:45hiring PR agencies buying ads and it
05:48just didn't seem like it worked at all
05:49like people were immune to marketing at
05:52that point they had caller ID all of a
05:53sudden they had ad blocker they had DVRs
05:55like none every humans got really good
05:58at that point at block traditional
06:00marketing out and so I was kind of
06:02wallowing in like my playbook doesn't
06:06daresh blogged his way through business
06:08go he was an early Tech blogger he had a
06:10Blog called onstar.com it's a Pity he
06:12didn't keep it going but anytime you
06:14heard an interesting lecture he would
06:15write about it and I was looking at his
06:18Google analy reports and comparing it to
06:20all my wealthy Venture back startups
06:22with like money and teams and expertise
06:24he's crushing them like by two orders of
06:27magnitude more interest in his crappy
06:30and I started describing the world as
06:33well my folks are doing outbound
06:35marketing and his he's doing inbound
06:37marketing and you've got to match the
06:38way you market with the way humans
06:40actually shop and buy and humans
06:41starting to use Google they stopped
06:43subscribing to magazines they started
06:44subscribing to blogs they started using
06:46the Social Media stuff and so we sort of
06:49captured that shift and then said well
06:52let's build a platform to help marketers
06:55move from the old school outbound way to
06:56the new school inbound way that was the
06:59basic basic foundational idea and that
07:01was kind of chapter one we've had a lot
07:03of chapters yeah well one thing that's
07:05stuck through many chapters has been the
07:08inbound conference a conference that
07:10over a 100,000 people go to you can give
07:12me the stats like people like Barack
07:15Obama speak at it it's sort of a
07:17pilgrimage for people who work in
07:19marketing like uh how did this happen
07:21why did you do it so in the early days a
07:23hub spot the way we described ourselves
07:25to the venture capitalist like yourself
07:27was at the time Salesforce at SFA
07:30salesforce.com is to sales as hpot is to
07:33marketing and the good thing about that
07:35is it's stuck on BC's heads it's like oh
07:38that sounds like it could be a good
07:39thing like we would go to dream Force
07:41every year and by the way we would sit
07:42at dream force and sit there being like
07:45God I hope they don't announce a
07:46marketing product this year literally
07:48the chos sit there like please
07:51don't announce a marketing product
07:52anyway we would go and we said that
07:54seems like a decent idea but it's more
07:57user conference let's create like a
07:58community thing that people will come
08:00even if they're not HubSpot customers so
08:03we said let's create this in down thing
08:05and we just gave it a go we and we had a
08:07room of 400 people in the marot in
08:08Kendall Square we invited Seth Goden and
08:11David mirman Scott and Brian soless
08:14these folks are still floating around
08:15where who are early sort of acolytes
08:17they may or may not call it inbound but
08:19basically the same ideas were coming out
08:21of their mouths and we sold out in like
08:245 minutes and it was really good and so
08:26then we sort of got on the treadmill and
08:28just kind of kept doing it every year I
08:29really enjoy it like we had my I'll tell
08:32you we had some amazing speakers like
08:34Reese Withers spoon and Guy RZ and
08:36people like that but my favorite speaker
08:38I got to interview one of my heroes
08:39Andrew hberman who's he's on my Mount
08:43Rushmore these days and then we have you
08:45know 12,000 people live couple hundred
08:47thousand people um listen and over time
08:50what it's kind of turned into like it's
08:52like it's reminds me of a Grateful Dead
08:54kind of thing like the parking lot
08:55outside the Greatful Dead Greatful Dead
08:57concert it's a community and it's very
08:58much community and the thing that people
09:00value most aren't those big sessions
09:02it's the smaller sessions on like the
09:04hell are we what the hell is AI and how
09:06do we get our arms arounded as Market or
09:08stuff like that and people really
09:10connect yeah that's uh that's very cool
09:12I know you wrote a whole book about this
09:14but I think uh for anybody who is not a
09:17dead head right like the The Grateful
09:19Dead are as much about like Community
09:22human connection collective experience
09:24as as music so few people know this but
09:26the Grateful Dead were founded in
09:28paloalto and little music shop in
09:29paloalto did their first studio
09:32recording at Stanford University so it's
09:34actually a child of Silicon Valley oh
09:37interesting yeah it was in San Francisco
09:39later they later went to San Francisco
09:41and then they they ended up in Marin
09:43they but yeah they're child of pal yeah
09:45doesn't strike me as the most
09:47counterculture starting point but we'll
09:49we'll take it now one of the things
09:50that's interesting that that about
09:52inbound you thought about that word
09:53there was a huge debate in the early
09:56days of HubSpot what is this thing and
09:59half the people were like you know it's
10:05was and a couple of us were like it's
10:08inbound marketing software and
10:09everyone's like what the hell is inbound
10:10marketing one of the early battles and
10:12decisions we made is let's try to create
10:13a category around this idea of inbound
10:16versus outbound and that did work and we
10:20still have the inbound conference I
10:22would just say we tried to do inbound
10:24sales failed uh very difficult to create
10:29category it turns out I tried to create
10:30this thing called instead of the funnel
10:33flywheel I don't know why it worked but
10:36some of the things we did that seemed to
10:38resonate was there was an enemy outbound
10:41and I think it always helps to have an
10:42enemy it was a little catchy it seemed
10:45to stick on people's minds a whole bunch
10:47of other people like Seth Goen and David
10:49mer Scott Brian sess were kind of
10:51talking about similar things and we just
10:53kind of stuck a word on it and then we
10:55just worked it we wrote each wrote two
10:57blog articles a week someone invited us
10:59to like a flea market we would go and
11:01speak we uh wrote a book which is a crap
11:06ton of work uh nights and weekends so
11:09anyway we did that and we created a
11:11category it's and for those of you
11:13listeners going through that battle I
11:15would say it worked and it's been one of
11:18our Keys's success but it was a ton of
11:20work and it's very hard to pull that off
11:23were there a few things that made sort
11:24of the sales terminology not as
11:26successful because like we should talk
11:28about in a second the sales product for
11:30husb was incredibly successful sales
11:32products on fire that's our kind of
11:35second act we tried to call it inbound
11:37sales but sales leaders are like no no
11:39no no we do outbound sale you don't get
11:42it we do outbound sales that's like what
11:44we do and marketers they're like no no
11:46no no we do outbound marketing and the
11:49thing is marketer the marketer bosses
11:52like I I searched on our company in
11:55Google and I couldn't find us you know
11:58and I went on this this this's this
11:59thing called Facebook I got an account
12:01there they were getting asked about it
12:02but I don't think the CEO was asking the
12:06head of sales about why are we getting
12:09more inbound leads and then they kind of
12:11put that in marketing anyway it was sort
12:13of it was pushed back on by sales people
12:16we really had to support outbound
12:18selling um to build a viable and and big
12:21business on that side we have some
12:23friends in common Alias and David who
12:25were acquired into HubSpot via their own
12:28up at the time for performable I don't
12:31know if you guys did any other
12:32Acquisitions that were important this
12:33one felt important what what did you
12:35learn about Acquisitions from this that
12:38one was important and I could kind of
12:39give you the background on that we when
12:41dmes and I started it we were really
12:43about the top of the funnel how do we
12:45helped people turn total strangers into
12:47visitors to their website and then turn
12:49them into leads but we hadn't really
12:51thought of like a database segmenting
12:53the database strip campaigns via email
12:57um honestly weren't that passionate
12:59about it at the time we didn't have deep
13:01domain expertise about it and so little
13:04known fact at the time we actually
13:06closed around with seoa and some of the
13:09proceeds we're going to use we're going
13:10to acquire a company in what we call
13:12mofu middle of the funnel the databased
13:15size segmentation trip marketing all
13:16that stuff uh we made a bid for par dot
13:20couldn't get to a number I went out to
13:22maretto CEO and proposed marbot to merge
13:25the companies merger of equals I of the
13:27CEO gig they weren't interested in the
13:29time too bad I know I think that would
13:31have been interesting and then you know
13:33DAV and Alias were well-known quantities
13:35we knew them in Boston and they were
13:37passionate about this middle of the
13:39funnel stuff it was an aqua hire we
13:41acquired them and their team and it
13:43worked they we they sort of built that
13:45middle of the funnel I would say we
13:48haven't done many since at all none of
13:50that scale it's hard to get the cultures
13:53to match and I think if I had it to do
13:55over with David and Alias I think it
13:57could have done a much better job of
13:59sort of assimilating them and partnering
14:01with them I was pretty Junior at the
14:02time so I am kind of but we've only done
14:05very small Acquisitions like I'm a big
14:08believer in the Peter talism of you've
14:11got to be right about something that
14:13everyone else thinks you're wrong about
14:15and you got to be right about it for a
14:16long time and you've got a zag when
14:19everybody else says you're going to zag
14:22and we've had a few of those in our in
14:25our history okay the first one was SMB
14:28uh and I kind of think of us as the M
14:30andb we're sort of the startup scale up
14:33that's what we sell to we don't sell to
14:36Enterprises everybody thought it was a
14:38bad idea every venture capitalist we
14:40spoke to we got lots of notes from
14:42venture capitalist and the reason was
14:43they didn't like that idea and the
14:45question they would all ask is well who
14:47else had done it and at the time it was
14:48into it and they'd say who else and
14:50literally there was no one else and
14:52they're like why and we explain well
14:55historically you couldn't get your cost
14:57to acquire a customer d because you
14:59needed humans to do it and there's new
15:00ways to acquire customers using you know
15:02inbam marketing and then you're going to
15:04lose customers so you need to up sell
15:06your existing ones you got to get your
15:07total lifetime value up and your Revenue
15:09retention rates over 100 and if you get
15:11that math to work you can build a
15:12scalable business but the people were
15:14very skeptical our board members were
15:16very skeptical even we went public
15:19people were very skeptical about it I
15:21still get asked about it all the time um
15:23but we Zig when everyone else zagged and
15:25I you know we duded a lot more than we
15:28would have we just went to the
15:29Enterprise like maretto did everyone
15:31wanted us to be maretto just be like
15:33maretto and Ela we were like well
15:34there's they're already there why do we
15:35want to be like them the world doesn't
15:37need a third one of these things um the
15:40second kind of Zig when everyone else is
15:43zagging was I described earlier how
15:47dares and I would sit in the audience at
15:49at dreamforce hoping that salesforce.com
15:53didn't wake when I wake up one day and
15:54say we're going to be the salesforce.com
15:56of marketing and of course they did one
15:59day um and we saw that coming so they
16:01bought four marketing companies in one
16:03year and we went from being their best
16:05uh uh partner to kind of an enemy and we
16:08pivoted you know we had been talking
16:09about pivoting to CRM uh but we pivoted
16:12and we said let's let's go to CRM let's
16:14come underneath them let's Zig when
16:16everyone else is zagging let's not make
16:17it like theirs let's make it incredibly
16:19easy to use and let's make it premium
16:22and everybody thought it was a terrible
16:24idea investors are bored most of our
16:27employees but we saw we use Salesforce
16:29it's hard it's expensive and we were
16:31like let's make an easy in expensive one
16:35and that was her second product sales
16:37product that was almost 10 years ago and
16:40now we got a we have a marketing Hub
16:42sales Hub service Hub Ops Hub CMS Hub
16:45Commerce that we have all Suite now but
16:47we drew on a whiteboard at an offsite
16:49that we were going to transform the
16:51company from a marketing app to a CRM
16:53platform and we drew on a whiteboard we
16:55were going to go from a pure inside
16:56sales organization to we called it
16:58premium them people call product like
16:59growth and honestly we're still on those
17:02Journeys N9 years later we're filling
17:04out that platform and we're getting
17:06better and better at that plg motion but
17:07I'm a big fan of zigging when everyone
17:09else is zing so I have to uh stop you
17:12here because it feels um uh so like it
17:16is not under I mean it is under your
17:19control but it's certainly not
17:20deterministic in terms of launching a
17:22fium product especially as a company
17:25that didn't start exactly that way yeah
17:29how did you have the confidence to say
17:31like we can get something organically
17:33adopted and we're going to stick with it
17:35and can you can you talk about that
17:36because you know when when the sales
17:38product uh for HubSpot did work it it
17:41really worked like it grew faster and
17:43was more profitable than the original
17:44marketing business it made you guys
17:46really important and strategic the story
17:48played out as your strategic offsite
17:50described yeah but I think most people
17:53most product teams most companies would
17:55say like you can't just make a premium
17:57product right or if you know you can you
17:59should call me right I think what's kind
18:02of interesting about that pivot uh we we
18:07were eight years in and we pivoted we
18:09wanted to build a West Coast company in
18:10the east coast we wanted to build a
18:12multi-billion dollar company we were the
18:14one thing dares and I had in common we
18:16had been somewhat successful earlier and
18:18we wanted to swing for the fences so we
18:19were willing kind of risk-seeking a
18:21little bit and a lot of people ask me
18:23like how do you become a multi-product
18:25company how do you go from app to Suite
18:26how do you go from sweet to platform
18:28and the the answer is with great
18:31difficulty so back then we wanted to do
18:33both things we wanted to build a sales
18:35application and we wanted to build a
18:37fremium motion so it's kind of two
18:39changes at a time which may maybe not
18:42wasn't a great idea the way we did it
18:45was like a lot of things that Hub we
18:46copied apple and there's so many stories
18:48about how Steve Jobs built the mac and
18:50they had a separate building and they
18:52had separate log into that side of the
18:54building and a separate stack and
18:55everything was different over there we
18:57said we're going to have to do that CU
18:58it's such a big change so we had a whole
19:00separate start of the building then we
19:01took three leaders inside of HubSpot
19:04Brian balfor who people probably know
19:06guy named Christopher donnal who people
19:08may or may not know R product for us for
19:09a long time and a guy named Mark Rober
19:12who a lot of people know he's kind of a
19:13sales professor at HBS now and I jammed
19:16them together and I said let's go let's
19:19build this thing and I'll I'll I'll help
19:21I'll do whatever I can to help it but
19:22let's keep I'll keep you isolated from
19:27PS the truth is those three couldn't
19:31come to grips on what the vision of the
19:34thing was they disagreed on what the
19:36vision was and one of my lessons learned
19:38there is people need to really want to
19:40come together you can't kind of mush
19:42people together think they're immensely
19:43talented but that there wasn't the
19:45Alchemy with the three of them so anyway
19:48we found other gigs and some of them
19:49left and what ended up happening is I
19:51became the co-founder with Christopher
19:53odonnell and we made a couple decisions
19:56on what the strategy would be and we
19:57just kind of ran fast and it took us a
20:01good two and a half years to get a half
20:03decent sales product out there and a
20:07motion and the and we kept it separate
20:09so we had separate sales team selling it
20:11it was plg motion and the Marketing
20:13sales people are like you know we really
20:15just want to sell that thing we're like
20:17no you can't sell it you can't sell it
20:19we had a separate instance of hub spot
20:21to manage all Le everything and then one
20:22day we're like okay we're ready let's
20:23merge them back together and we did a
20:25counterintuitive thing we took the sales
20:26business and we acquired the marketing
20:28business so we took that premium plg
20:31motion and we applied it to marketing we
20:33took a bunch of the leadership and
20:35applied it over the marketing side and
20:37so I say with great difficulty like
20:39individually for me dealing with the
20:42Fallout of those three trying to figure
20:44the strategy out having patience through
20:46it like I've made a lot of mistakes and
20:49I made a lot of mistakes in there but I
20:52maybe if not maybe my best chapter
20:55inside HubSpot is pulling that off yeah
20:57it's extraordinary you you just said you
20:59wanted to build a multi-billion dollar
21:01company like a West Coast company on the
21:03East Coast so uh I also happen to know
21:05Christopher odonnell and he said the one
21:08question to ask you was how HubSpot
21:10succeeded more after the IPO when so
21:13many Boston based companies have
21:14struggled yeah see Tom is a very smart
21:17man okay couple thoughts on that I
21:19listened to a podcast with Mark andreon
21:22the other day he's obviously big SE
21:24count Valley booster and he talked about
21:26he's not crazy about investing in
21:28Silicon Valley because the companies
21:30tend to optimize for like a local
21:34maximum like you want to be the biggest
21:35tech company in Boston or you want to be
21:37the biggest tech company in Austin
21:39whereas companies in Silicon Valley want
21:41to be the biggest tech company you know
21:43want to beat Apple want to be Google and
21:44I think he's right I and I never heard
21:47anyone say that before when we build
21:49hpot we always say we want to build a
21:50West Coast company on the East Coast so
21:53we like once a year we would drive the
21:55entire management team out to the West
21:56Coast and visit a whole bunch of people
21:58that we respected that would push our
21:59thinking we were really built like a
22:02West Coast company and East Coast
22:03companies were just thought a little bit
22:05differently I think one thing we did
22:06around the IPO is we always said the IPO
22:09is starting line not the finish line
22:10starting line not the finish line
22:11starting line not finish line we just
22:14said that a million times and I meant it
22:16do you know how much this worked Brian I
22:18think it was my very first conversation
22:20I have no idea how this came up but my
22:22very first conversation with Chris he
22:24brought this up and he said starting
22:26line not the finish line and I was like
22:28inter it has permeated uh you know at
22:30least your your leadership incredibly
22:32deeply interesting Chris and I work
22:34really close closely together um so I
22:37wouldn't be I'm not shocked the other
22:38thing we did is when you go public
22:41companies change a lot the biggest
22:42change that happens to startups when
22:44they go public is you need to name like
22:46five officers and these are five people
22:48who have access to all of the
22:50information in a given time in an
22:51exchange for all those information
22:53rights they're locked into trading
22:55windows that they can trade the stock in
22:57and then you have to block lots of
22:59important information for the rest of
23:01the employees we flipped that and we
23:03said every every employee the
23:05terminology different but basically
23:06every employee at help spot frontlight
23:08support person anyone they're all
23:10officers so they all have the same
23:12access to information everyone's locked
23:14into certain trading windows so it
23:15didn't feel like a big change when we
23:18went public and I think that helped a
23:19lot the other thing was it was quite
23:22clear that we were heading towards being
23:24a a a CRM platform we had our second
23:27product in the market on the IPO Roo was
23:29super awkward because you know we had a
23:32whatever $200 million marketing business
23:35and we had this like $1 million sales
23:37business and it was like the last slide
23:39and everyone just was like yeah whatever
23:41why don't even bring that up the bankers
23:43like don't even bring it up because no
23:45no one gives any credit for it but it
23:47was a big initiative inside the company
23:49so people could see it I think that
23:50helped as well and people believed it
23:52and they were they were like working on
23:53that despite you know yeah I think
23:55everyone believed Us in that that
23:58both dsh and I wanted to build something
24:00big and special there's a line we always
24:02use that we want to build a company our
24:04grandkids would be proud of and like my
24:06dad had a really interesting career he
24:09worked for BBN you know uh in his early
24:12career he worked for GE when I was cool
24:14to work for GE and I brag about him and
24:16I want my son Luke to brag about my
24:18career and hopefully he has kids someday
24:20and they brag about my career and be
24:21proud of it and so that's sort of what
24:23we that's the Mantra we use over and
24:24over again uh I want to ask you one or
24:26more to one or two more questions about
24:29um about leadership and then I want to
24:30talk a little bit about AI so we're just
24:32walking through all of my favorite
24:34HubSpot people so JD Sherman um your CEO
24:37for a while at certain points managed
24:39you know large Parts entire organization
24:41at HubSpot um and was there for a long
24:43time in terms of all the founders that
24:45listen to the podcast many at some point
24:48think about hiring a COO how did you
24:50guys decide to to do this what advice
24:52would you have for for people we hired
24:56so after we closed our Koy around we
25:00performable and we stopped like tracking
25:03expenses we just started spending like
25:06soldiers and we just got distracted it
25:08was a really good round we had seoa
25:10Google and Salesforce in the round and
25:14we just kind of took our Eye Off the
25:15Ball we had never missed a a quarter and
25:18we missed that quarter on the revenue
25:19side and missed the expense Side by a
25:22country mile we had a couple longtime
25:24board members Larry and Dave Larry from
25:26General Catalyst and they were like you
25:29what you could use some
25:32help I was like what do you mean like
25:35yeah me think you should hire a COO and
25:37I pushed back I was like nah I got this
25:39i got this like not really and so
25:43they're like go see if you can find one
25:45and so I interviewed a bunch of people
25:48and I met JD and JD was a longtime IBM
25:51person which is like oof and and then he
25:55was at aamai for a long time C CFO wait
25:58is it oof like PTC people are oof I mean
26:01IBM is just huge slow company like we we
26:04were a very fast we were the the
26:06antithesis of IBM but he had spent a
26:08bunch of time in aai which is a scale up
26:10we admired in Boston he was CFO and and
26:14he was trains on time type of person and
26:17he's just a wonderful funny great
26:20culture ad and so we convinced him to
26:22join certain times he manage small parts
26:25of the organizations certain times he
26:26manage a lot of the organization it was
26:28a really good call um and I thank my
26:31board members for that heads up uh later
26:34on my board also advised me to get a
26:36coach so I hired this guy who's like a
26:38psychology Professor coach from Columbia
26:41who was really useful in coaching me
26:43over time and then more recently I
26:45decided to step down you know we got to
26:47two billion in Revenue I really didn't
26:50think the road from 2 billion to 20
26:53billion was my forte I didn't know a lot
26:55about that maybe a little less
26:57passionate about that part of the
26:58journey and we had a wonderful woman
27:00yamani that was run and go to market and
27:03so she's the CEO now and I'm the
27:05chairman so I think CEOs need to be
27:07open-minded about their strengths and
27:09their weaknesses and fill them in I
27:10think a lot of CEOs probably need a COO
27:13and a lot of CEOs should probably not
27:16retire but move into the chairman role
27:18and let somebody else run the day-to-day
27:20of the company and they might be
27:23surprised how much how happy they are
27:24when they do that so as chairman now you
27:27still know a lot about and are very
27:29engaged in HubSpot HubSpot has committed
27:32to I think big investments in AI in in
27:34my discussions with your leadership team
27:36like what are you guys doing here um and
27:38when did when did you start to think
27:40about it we've had an AI team for a long
27:42long time but it's more an ml team it's
27:44interesting we had a call with Sam
27:47wman two and a half years ago I got
27:49connected with him and I'm like would
27:51you mind if I just picked your brain on
27:53AI because at the time there was like an
27:55arm trace for AI people that cost a
27:57million dollars your higher amount of
27:58MIT now it costs two yeah and this is
28:01before Sam Alman was Sam Alman you know
28:04uh he actually this before he levitated
28:06and walked on water and he said first of
28:10all don't hire don't go hire a bunch of
28:11phds you'll never keep up with the arms
28:14race he's like we're at open AI we keep
28:16losing people to Google the second thing
28:17he said is AI is progressing in a pretty
28:20linear way now and it's getting better
28:22but it's getting better slowly he said
28:24at some point in time in the future and
28:26he said I'm not sure what that point in
28:28time is going to be it's going to go ASM
28:31totic it's really going to get a lot
28:33better and so he said keep chugging away
28:36and wait till that happens basically
28:39what we did and man was you right the
28:41second we saw chat PT we tried to invest
28:45in in open AI D Ria got early looks at
28:48it and we tried to get in the round with
28:49Microsoft and had a bunch of discussions
28:51with him and they BL the end of the day
28:52they wouldn't let us in which is kind of
28:54a bummer but uh yeah we were on pretty
28:57early and as soon as we started seeing
28:59it and D started playing with the early
29:00stuff uh we started pushing that hard on
29:02the engineering product work that you
29:05know certain things that come along
29:07blockchain came along and crypto comes
29:09along mobile comes along that are
29:11interesting this is a big shift that's
29:14incredibly relevant to CRM incredibly
29:17relevant to the way humans will shop and
29:21buy and this wasn't something we could
29:23kind of half measure in so we we kind of
29:26pivoted right into it right right out of
29:27the gate when chat team first came out
29:29you've been looking at how businesses
29:31engage with customers for for 20 years
29:33and you've been really really right
29:35about some of the macro shifts like how
29:38what do you think is going to happen
29:39about how we engage or how how customers
29:41buy I think one of the obvious things is
29:44how much better these things are getting
29:45and how quickly they're getting better
29:47and everything you've got on your
29:49website and every social post you've
29:50ever put out there it's consumed and
29:53understands it and so I think of Google
29:56someone goes to Google they ask question
29:57it gives you a list of Blue Links click
29:59that blue link that that Prospect lands
30:01on your website um but you think of chat
30:03gbt yeah know they keep asking a
30:05questions about you they don't
30:06necessarily have to go to your website
30:09um and so I think that'll be a big shift
30:11in having lots of high quality content
30:13is going to be important but I think one
30:15of the things is not going to work is
30:16using AI to just create tons of content
30:19I think Sam Alman and all the people
30:22building the the other models are going
30:25to look at similar signals to Google
30:26they're going to say how many links are
30:27into the site with the power of the
30:28links other signals of credibility
30:31you've got to create really really
30:32really high quality content if you want
30:34to get found in there the other thing I
30:36think people need to do is give folks a
30:38reason to come to your site and I've
30:42of ungate everything you know you used
30:45to have all this white papers all this
30:46crap behind um Gates and I'm like put it
30:50in your blog whatever I actually think
30:52maybe Gates come back a little bit
30:53because what's a reason to go to your
30:55website unless there's some additional
30:57content you get beyond that
30:59login um and I think plg and all that
31:01still is very very viable but I do think
31:04the world for marketers and sellers
31:05going to change a lot uh how do you um
31:09how does AI change like what you build
31:10at HubSpot how are customers using what
31:13you have already built yeah we built a
31:15bunch of stuff sums in beta sums in V1
31:18um and it's getting nice adoption like
31:21the really obvious thing we did is
31:23content assist so you're writing a Blog
31:25article and you want to write it for you
31:28you want an image uh landing page um
31:32that's got really nice adoption we built
31:35like a campaign Builder so I think of AI
31:38at large in workflow apps it used to be
31:39like humans go and create all the
31:41workflows and now ai can just look at
31:44what's going on and create a better
31:45workflow for you so sort of campaign
31:47assistant has been super popular we have
31:50a thing called chat spot which is
31:52basically a layer on top of uh open Ai
31:57and we use cloud we use anthropics
32:00models we use different models for this
32:01and then our API so it kind of pulls all
32:04this information together and we're
32:06seeing a lot of people particularly
32:08casual users of HubSpot not want to you
32:11know go through 10 clicks to to build
32:12that donnut shape report inside a
32:14HubSpot but just say hey give me the
32:16donut shape report about leads last
32:17month from geography just a whole new UI
32:19for this stuff I think is quite
32:21interesting we're just starting to build
32:23agents um we definitely got bought so a
32:26lot of our customer are starting to use
32:28are bots on their website for support
32:30for marketing I think what'll be
32:32interesting for companies
32:34is support organizations and and like
32:37bdr and Sr organizations getting are
32:39going to get incredibly efficient as
32:42these Bots get smarter uh and they're
32:45just going to be able to answer so many
32:46more questions 24 hours a day they're
32:48not going to be tired they're not going
32:49to be hung over not going to make
32:51mistakes they going to make mistakes but
32:53um I think the world's going to shift a
32:56lot in CRM for gr to Market
32:57organizations mostly a positive ways uh
33:00I I feel like I've also seen uh you know
33:02a dozen companies in each of the domains
33:04that you mention how do you think about
33:06you know now being I'm sure you still
33:08feel like the rebel but like being an
33:10incumbent versus what advantages
33:12startups have in most disruptions I
33:14think the the the rebels have the
33:17advantage I don't think that's the case
33:20here like we have so much data over so
33:23many years about so many customers and
33:27that's what makes this stuff really sing
33:29and as a brand new startup in the
33:33space you got to get data it's hard to
33:35get data and so I do think incumbents
33:37like CB SWAT like Salesforce have kind
33:39of an unfair Advantage I think the fact
33:41that we lean into it and we move fast
33:43helps and there there's approximately a
33:46thousand CRM companies out there I
33:47wouldn't imagine they're all moved as
33:49fast as Salesforce in helpspot did but I
33:51do think incumbents in this very rare
33:53case do have kind of an advantage funny
33:56to refer to H spot is an incoming
33:57company at this point yeah you're 20
34:00years in and 26 s billion of market cap
34:03right yeah okay we had dinner at some
34:05point where you talked about the
34:06investment in culture at HubSpot and how
34:08you and daresh thought about it it shows
34:11up in the results you you guys are
34:12repeat winners on glass door in terms of
34:15both like CEO to work for and best place
34:17to work how Okay the early days of
34:22um we didn't want to talk about culture
34:24HR any of that stuff the first three
34:26years like culture was a fourl word no
34:29one should bring it up you can't measure
34:32soft and then I joined a CEO group about
34:37in and I largely joined that CEO group
34:44members uh was a guy named Colin Engel
34:46who is the CEO of ir robot that makes
34:48those Ruma vacuum cleaners I would
34:50describe my relationship with Colin in
34:53two words the first is man the second is
34:56crush a major man crush on them I showed
35:00up for the first meeting there's nine
35:01CEOs around the table and uh sat right
35:05next to Colin uh and I didn't know this
35:09but they picked a topic and they would
35:10just go very deep into one topic all day
35:13and it's like CEO couch toown and the
35:16topic of the day was culture I was like
35:19is that what this this is such a waste
35:21of time can't believe I spend all day
35:23talking about culture and so I didn't
35:25say anything all more morning and
35:27sitting next Colin at lunch asking him
35:29question of product and
35:31Innovation and Colin said
35:34uh you don't like this culture topic do
35:36you I said no I think it's a waste of
35:39time he said culture is how you scale
35:42your company culture is how people make
35:45decisions when you're not in the room
35:48okay took no participate in the
35:51afternoon and then that next day I saw
35:53gash in the office and he said uh has
35:58meeting said fantastic I loved it he
36:01said tell me about it I said well it was
36:02all about culture he said that's that
36:09daresh culture is how you scale the
36:12company culture is how other people make
36:15decisions when you're not in the
36:17room and so we started chatting about it
36:19and I said why don't you be the cultures
36:21are and in a very weak moment dares said
36:23sure uh because he's not one to take on
36:27initiatives like that uh and we actually
36:31hired a terrific professor of ours from
36:33Sloan to do a project to survey our
36:36employees about the culture and she
36:38didn't have promoter she said on scale 1
36:40to 10 how likely you refer HubSpot why
36:43to a friend and we got the results back
36:45almost everyone said they like the
36:47culture which is a real surprise to us
36:48because we didn't allow people to to
36:50talk about that and then we said can you
36:52build this like a version one of a
36:54culture deck which was like describing
36:57our culture what it's like to work here
36:58the relationship between employees in
36:59the cult company and that was our
37:02culture code and we totally ripped off
37:03Netflix at the time had something called
37:05the culture code and really work for
37:08them and Netflix had a very very unique
37:11culture and we built the same type of
37:14deliverable very different than Netflix
37:17but the same format we posted up and man
37:19it got a huge uptick and it still does
37:22we'll link to the presentation we had
37:24two products we have a product that we
37:25sell to customers and if that product's
37:27high quality and unique relative to
37:29competitors it'll be like a magnet that
37:30pulls customers and retains them and we
37:33have a second product that's our culture
37:35and if it's Unique relative to the
37:37competition in really high quality it'll
37:39be like a magnet that pulls into
37:41employees and retains them so we really
37:42took it quite seriously uh we edit that
37:45culture document every six months to
37:47keep it fresh and make sure we're
37:48walking the walk on it we still do a net
37:50promoter survey once a quarter we
37:52publish every answer that doesn't
37:54include really bad swear words or things
37:56like that that in there on our Wiki so
37:58everyone can see what everyone else is
37:59saying we address many of them often
38:02times like Hey we're not going to do
38:04this but we heard you and so we take it
38:07very very very seriously are there uh
38:09answers from those surveys that have
38:11surprised you over the
38:12years I mean you're in a any company
38:15people are going to complain about
38:17virtually everything uh everything it
38:20one point we put we had a uh we put a
38:22smoothie bar we had a Smoothie Bar you
38:25are a Silicon Valley company totally
38:27smooth bar yeah and I don't know why
38:30this was the case but we we didn't have
38:34protein powder for it and I don't know
38:37like who the person in charge was just
38:40it was too expensive or hard I don't
38:42know why but for some reason there was
38:44no protein powder there was like a
38:46thousand complaints about the lack of
38:50powder it was we called it smoothie
38:55gate the other thing I think we did
38:58right by the way Sarah was we um at
39:00least for us we didn't hire someone who
39:02was a career HR person we are woman in
39:06marketing who just was a dog and a bone
39:09about people issues all she talk more
39:11about people issues than marketing
39:13issues and we said to her like why don't
39:14you just come and be our first HR person
39:16I don't want to do that I want to be HR
39:18I'm a marketer and we really it took
39:20weeks months of convincing her she
39:22finally did it Katie Burke she still
39:23runs our U people Ops um and she's the
39:28one who caused smoothie gate and still
39:32will not give in on the protein
39:35powder there's no protein powder it's
39:38still the Smoothie gate it's like eight
39:41years later persists HR people are
39:44tricky to hire because in HR you've got
39:47recruiting people you got compensation
39:50people you've got culture people you've
39:52got dni people you've got benefits
39:54people and you you know if you've got a
39:57person who runs HR they likely grew up
39:59through one of these things and doesn't
40:02others very unlike sales or service
40:04where they really rhyme most of those
40:06things in HR They Don't Really rhyme
40:08that much and so it's the one place
40:10where you can take a real athlete who's
40:13smart that can think in first principles
40:15and figure it out and that that was the
40:17that was the route we took uh okay let's
40:20talk about how you know your you're
40:22spending time now you co-founded um a
40:25firm called propeller Ventures which
40:28focuses on developing ocean related
40:30Climate Technologies why' you do that I
40:33got in a terrible snowmobile accident
40:35two years ago and I broke 13 bones I had
40:38five surgeries and I was lying there in
40:41the snow thinking I was going to die
40:44uh I I actually was like I don't enjoy
40:49running the day-to-day of HubSpot
40:51anymore I don't think I'm as good at
40:53this size as I was earlier sizes
40:57is if I make it through and live I'm not
40:59going to come back and do it and I and
41:02very shortly thereafter be like I'd like
41:03to get into the climate game it's the
41:05existential crisis of our life I'm sort
41:06of a mission driven type of person and
41:10uh once I got healthy yam took over a
41:13CEO I started meeting with climate
41:17people you know Founders
41:19VCS um professors and
41:23whatnot everyone in climate's depressed
41:26ing like not optimistic in depressing so
41:29I sort of did a road show and then one
41:31day I visited a place called The Woodle
41:33oceanographic Institute on Cape Cod
41:36surprisingly oceanographers are really
41:38optimistic about climate change like the
41:39ocean absorbs much of the carbon dioxide
41:42from the air absorbs almost all the
41:44excess heat we're producing it got us
41:46out of the last ice age it's the only
41:49thing of scale that can really get us
41:51out of the pickle we're in doesn't
41:53matter how many trees we plant we can't
41:54get there with trees they die and give
41:56their carbon a lot of the carbon dioxide
41:59so all right and so I I started
42:02volunteering for them and helping them I
42:04was like you know we need Venture
42:06involved we need money and Venture not
42:08just research so we started a venture
42:11funds called propeller $120 million fund
42:13where we back startups at the
42:16intersection of climate change in the
42:18ocean and I did did that a little over a
42:20year ago going great so far so good we
42:22made about 10 Investments amazing um
42:25we're out of time here is there anything
42:28that you were hoping to talk about that
42:30we didn't or anything you want to add no
42:32I want to say I think you're doing a
42:34great job I'm really happy you started
42:35your own fund I'm really happy you're
42:37focus on AI I'm really happy to be an
42:39investor in your fund I really wish I
42:41invested more and I'm proud of you oh
42:44that's very kind all right thanks thanks
42:47Brian find us on Twitter at no prior pod
42:51subscribe to our YouTube channel if you
42:52want to see our faces follow the show on
42:54Apple podcast Spotify or wherever you
42:57listen that way you get a new episode
42:59every week and sign up for emails or
43:00find transcripts for every episode at
