Billion Dollar Business Philosophies With Hubspot Co-Founder Dharmesh Shah

Sam Parr (@TheSamParr) and Shaan Puri (@ShaanVP) talk to Co-Founder & CTO of HubSpot, Dharmesh Shah (@dharmesh), about why a bad economy is a good time to start a business, creating an alternative to Wordle, and the trillion dollar Venn diagram of success. Also, want $5,000? Check out the My First Million Clips contest. ----- Links: * HubSpot * Why to Start a Startup in a Bad Economy article * WordPlay * Maven writing course * Shaan tweet about starting the next Pixar * Do you love MFM and want to see Sam and Shaan's smiling faces? Subscribe to our Youtube channel. * Want more insights like MFM? Check out Shaan's newsletter. ----- Show Notes: (02:10) - Why renting is better than owning (25:20) - Framework for three types of employees (35:05) - Why Dharmesh built WordPlay (01:07:55) - Driving value through an intersection of skills (Trillion dollar Venn diagram) (01:12:10) - Why Shaan is starting the next Pixar ----- Past guests on My First Million include Rob Dyrdek, Hasan Minhaj, Balaji Srinivasan, Jake Paul, Dr. Andrew Huberman, Gary Vee, Lance Armstrong, Sophia Amoruso, Ariel Helwani, Ramit Sethi, Stanley Druckenmiller, Peter Diamandis, Dharmesh Shah, Brian Halligan, Marc Lore, Jason Calacanis, Andrew Wilkinson, Julian Shapiro, Kat Cole, Codie Sanchez, Nader Al-Naji, Steph Smith, Trung Phan, Nick Huber, Anthony Pompliano, Ben Askren, Ramon Van Meer, Brianne Kimmel, Andrew Gazdecki, Scott Belsky, Moiz Ali, Dan Held, Elaine Zelby, Michael Saylor, Ryan Begelman, Jack Butcher, Reed Duchscher, Tai Lopez, Harley Finkelstein, Alexa von Tobel, Noah Kagan, Nick Bare, Greg Isenberg, James Altucher, Randy Hetrick and more. ----- Additional episodes you might enjoy: • #224 Rob Dyrdek - How Tracking Every Second of His Life Took Rob Drydek from 0 to $405M in Exits • #209 Gary Vaynerchuk - Why NFTS Are the Future • #178 Balaji Srinivasan - Balaji on How to Fix the Media, Cloud Cities & Crypto * #169 - How One Man Started 5, Billion Dollar Companies, Dan Gilbert's Empire, & Talking With Warren Buffett • ​​​​#218 - Why You Should Take a Think Week Like Bill Gates • Dave Portnoy vs The World, Extreme Body Monitoring, The Future of Apparel Retail, "How Much is Anthony Pompliano Worth?", and More • How Mr Beast Got 100M Views in Less Than 4 Days, The $25M Chrome Extension, and More

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Dharmesh Shah?

  So this is what I call it, the trillion dollar Venn diagram success, right? Uh, I just made that up, but so you draw those circles of your skills and say, okay, well, I am now not like one in a million, I'm one in a billion, right? Or one in five billion, whatever that is. And if you can convert that into some kind of monetizable business thing or whatever, that's when magic sort of happens. So that's kind of thing. Number one is like, what's your thing? What are your skills? Um, and what drives the value? How much value will that intersection create is two things. One is how rare is that intersection? Whether it's two circles or three circles or whatever, how rare is it? And then the other one is.

• 0:43Sam Parr?

  So on the pod right now, we've got Dharmesh. Dharmesh is the founder of HubSpot. He's a, well, your technical title, CTO, right?

• 0:51Dharmesh Shah?

  That is correct.

• 0:52Sam Parr?

  I see you more.

• 0:53Shaan Puri?

  This means that, uh, that you have to do the ad reads for your own company today. Why are we talking about HubSpot? You do the ad reads. You tell people why to buy.

• 1:01Dharmesh Shah?

  You're talking about HubSpot because you guys do a much better job. I am terrible at that and terrible at the promotion side of things, but.

• 1:07Sam Parr?

  The Sean, do you, you're renting a house right now? Yeah. And Dharmesh, you do not rent though, right?

• 1:14Dharmesh Shah?

  Not anymore. I did for a long, long time. I'm a big believer in rentals, as it turns out, but.

• 1:19Sam Parr?

  I, uh, I'm staying in Brooklyn for the summer and I rent a furnished house and it, or apartment, and it is so much better than owning a place and having to worry about stuff all the time. It is so much better. I, I think I, I'm with the renting train, I think now, like I've kind of been there, but like, I actually love it more. Do you like it? Cause Sean, you owned a place in San Francisco for like four years and then now you rent again.

• 1:43Shaan Puri?

  Way better. In fact, every time something breaks, I now just have joy to be like, let me call somebody else. It's their problem. It's their cost to fix. They have to arrange it. They have to do whatever. And I don't have to think about it. Plus also in California, property taxes are like insane or like in San Francisco, cause the, you know, the house price is so high. So, you know, even if you try to do the calculation, it's so hard to beat just this annual property tax every single time on rent.

• 2:11Sam Parr?

  Wait, so Dharmesh, if you, if you had the choice again, I mean, I, I think maybe perhaps you bought because like your wife wanted to, or your kids wanted to, but if it was up to you, even with the family, would you be a renter?

• 2:25Dharmesh Shah?

  If it was up to me, yes, because

• 2:30Dharmesh Shah?

  just the decrease in maintenance and wear and tear on one's psyche and soul that ownership bestows upon you is just not worth it. That's my thing. It's just like, like, I don't want to worry about those things. I want to, I want to get as close to like, living in the matrix as I possibly can, right? Renting is a step closer to being in the matrix. We don't have to worry about physical things and atoms and things like that. It's like, that's somebody else's problem. Why you show up?

• 2:52Sam Parr?

  How, how many people in your socioeconomic like ballpark, like, you know, founders of multi-billion dollar companies? Or people like you, do you think also rent? Because I think that'd be a, if it were a fair amount, that'd be fairly shocking to a lot of people. But do you know a bunch of people that are similar to you that are still rent?

• 3:10Dharmesh Shah?

  I know people that are similar to me in terms of that they would prefer renting because I've talked to them about this, but almost everyone I know now, once you get a family, once you have like other things that you're trying to factor in. For instance,

• 3:22Dharmesh Shah?

  you know, one of the things my wife loves gardening and loves having a yard and that's kind of hard to do in a rental. Not that you can't do it, but it's.

• 3:29Shaan Puri?

  Right. One thing that a guy told me who's similarly, you know, I think he's probably got like a 10 or 10 or 20 billion dollar house. He was like,

• 3:38Shaan Puri?

  he's like, renting is amazing until you want, until your wife wants a specific house. And then once your wife wants a specific house or in a specific neighborhood, that neighborhood, like, like higher end neighborhoods have no rentals. So you just can't get into that neighborhood, which means you can't have whatever. So then you're forced into a different path. And so I thought, you know, it's a, it's a version of good problems to have. So we'll count it that way. All right. What are we, what are we talking about? Where should we start?

• 4:06Dharmesh Shah?

  Well, you have a few things left over from the last episode, Sean. I don't know if we want to jump into some of those.

• 4:12Shaan Puri?

  Let's do one, because I think you will have a take on this. So, so have you ever read, I don't know, do you know Paul Graham, by the way?

• 4:19Dharmesh Shah?

  I do. We're not best buddies or anything, but I do know of him. I've met him. Yeah.

• 4:24Sam Parr?

  So he's from Boston, right? Or Cambridge?

• 4:27Dharmesh Shah?

  Cambridge. Yep.

• 4:28Sam Parr?

  Yeah. So you guys know one another?

• 4:30Shaan Puri?

  He wrote a blog post back in 2008. It was October 2008. So this is like right after the, the crash. And it's, it's just if you go to paulgram.com slash bad economy is the name of the blog post. And he makes this case where he goes, the economic situation is apparently so grim that some experts fear we may be in for stretches bad in the mid seventies, which is when Microsoft and Apple were founded. And as those examples suggest, like a recession may not be such a bad time to start a startup. But he, which you've heard before, but I thought there's one interesting part was he goes, I'm not saying it's a good time either. The truth is more boring. The economy doesn't matter much either way for a founder starting a startup. And I actually thought that was a really good point because I hear this so much. It's like, I'll talk to kind of young founders and they

• 5:14Shaan Puri?

  listen to Twitter and they listen to podcasts and they listen, you know, they listen to kind of these, like a lot of it's like, you know, VCs who are, you know, also pandemic experts and also, you know, macro economists as well. And so they hear, and then they, they sort of start to adjust their plans and their mental models and like their room for everything. It's like, dude, if you're a startup, you're like an ant in this world. Does the ant care what's going on with the presidential election? No, like you basically just need to build a product. You need to carry your little piece of dirt. It's like, build a product, get a customer, get 10 customers. Like, it doesn't matter if the, if the economy is bad. If you can't get 10 customers, it's not going to work anyways. And so I thought it was a great little blog post talking about like, kind of starting a startup during the downtime, which is

• 5:58Shaan Puri?

  where I think we're about to, or we just officially entered a recession again. So I was curious, Dharmesh, do you have any thoughts on that?

• 6:05Dharmesh Shah?

  Yeah. So my position is I lean more towards kind of a polygram and the spectrum, which is I think it's either neutral, that it doesn't matter. It's one of the things you're suggesting, uh, towards positive. Um, and the positive elements of being in a, a kind of downturning economy or recession is that things become available that would not have been available to a startup before. Like talent. Um, it's like, oh, well, there are people sitting at Meta, Facebook or sitting at Google right now that maybe reevaluating their lives, or they may have just been let go from a venture backed company that raised 200 plus million dollars, right? So now you've got this talent that's coming on the market that might not have come on the market before. Things that were super expensive, like buying Google AdWords or certain marketing channels, because you have this glut of money and a glut of venture capital.

• 6:46Dharmesh Shah?

  I think of venture capital as a very efficient machine of turning like money from LPs into Google AdWords rep, you're right. That's they're just a conduit between the two. And as in a downward economy, you're going to get less of that kind of glut of money flowing in, which drives the cost overall down for certain things that I think are important to entrepreneurs. So I'm I'm generally net positive that in down economy is actually a relatively good time to start a startup.

• 7:09Sam Parr?

  For like the last 18 months, or you know, whenever like the last 24 months, whenever things have been booming. I've my wife works at Airbnb and you know, I've got a lot of friends that work at obviously Husband, all these. And Sean was at Twitch, so we have like some some perspective on how on the salaries of big companies. And I've seen some of these salaries and they're crazy, crazy, crazy, crazy, crazy. As the as like a leader and the biggest shareholder of Husband, and you like see these see these numbers. Are you thinking to yourself like this, like, we can't afford to pay someone like an entry level person $250,000 a year? I don't know how this is going to work. Like, what what's your perspective on that when when these salaries are going so high? Now it's like a little bit normal, more normal.

• 7:51Dharmesh Shah?

  Yeah, but as a startup, I mean, you can't afford those salaries anyway, right? Unless you're one of those kind of rare exceptions that has 50 plus million dollars going out of the gate, which is very, very rare. And so, you know, one of the things a founder has to kind of get good at. It's convincing really smart people to do this irrational thing, which is join you in your startup, right? And if you can't, if you can't do that, if you can't make that sale, which is the most important sale you'll make is being able to kind of track people and then it's customers. It's not going to work, so you have to do one of the two things. Either recognize kind of superstar talent and give them something they can't get. Because it's beyond competence, like, oh, you'll learn more here. Oh, you're going to do your own startup someday. This is the place to get your startup MBA, because you'll be exposed to a bunch of things. You'll meet your future co-founder of the company, those kinds of things.

• 8:34Dharmesh Shah?

  Either you have to do that, or you have to say, I'm going to be really good at. Identifying diamonds in the rough, people that have not made it to the 200 plus, 300,000 plus dollars salary yet, but they will someday. I caught them early in their kind of evolution. And so I can get them. There's that. So it has to be one or the other form of arbitrage. Otherwise, you can't play the game. That's just not, uh, like it's viable.

• 8:55Shaan Puri?

  I, I, I'm doing, uh, when you're saying that it's like resonating so much because it's basically all the three things we just talked about, I'm doing. It's like, I started the milk road in January this year. And so, you know, it's been, it's about to be six months or it's been six months. And, um, it's like, here, let me start a crypto company right when crypto crashes, you know, like 70, 80%. And at the beginning, Ben, even my co-founder Ben, he was like, you know, the only thing I can see going wrong is if crypto goes in a bear market. I go, well, crypto is going to go into a bear market. Like that's like, one of the few certainties of crypto is that it goes up and down. And when it does, it is dramatic in all, both ways. It goes from the elevator is dramatic in both ways. And I was like, you know, so it's just a question of like,

• 9:37Shaan Puri?

  do you, what do you think that kills it? Or do we just make it through? Like there's, that's really all we have to think about here. Um, so that was the first part of like, starting in a bad economy. The second one on talent was, I recently hired this guy and he quit a pretty well-known, uh, venture-backed company that I think had just raised maybe 50 or a hundred million dollars. And he joined and I had talked to him a little bit before he joined, like he was thinking about doing his own startup. He, we had traded a couple of emails, nothing serious, just he, he was wanting me to use his product. Then he took a job at this place. All right, whatever. I forgot about him. Then he emails me and I, I shared this on Twitter. He emails me, subject line, I have made an irreversible decision. And I was like, okay, I gotta click this. What's inside? And he's like, I just quit my job and I think you should hire me.

• 10:22Shaan Puri?

  And I was like, okay, direct and to the point. And then he tells me why, blah, blah, blah. And so I was like, all right, boom, I'm sold. Very bold approach. I already liked your hustle before this because when you were hustling to try to get me as your customer, I was like, this guy's good. Um, so, okay, let's do this. And I made him a job offer, which was not like, you know, a Silicon Valley job offer, but the guy lives in San Francisco. He was working for his Silicon Valley startup. So he was like, oh dude, that's like a 50% pay cut. And I was like, Um, and I didn't say this out loud, but in my head, what I, what I felt, I, I told him, I was like, that's what I can afford to pay right now. And like, look, you come crush it, the sky's the limit, but like, that's what I could pay you right now. Sight unseen. And I said, and in my head, I was about to tell him the, the line that I had heard from Warren Buffett.

• 11:07Shaan Puri?

  You guys probably heard the story, but when Warren Buffett goes and tries to work for his, you know, kind of hero or whatever, Ben Graham. And he's like, you know, I'll work for you for free. And Ben Graham goes, your price is too high, sir. Which is, which is the truth, which is the idea that you got to shadow Ben Graham and work side by side with him every day was, you should be paying for that if you really want to be like a successful investor. That's how I felt. And I didn't want to say it because it's kind of arrogant, but it's like, dude, if I take you under my wing, my team is like three people. If you become one of those three and you're working out of my, he came over to my house yesterday, you're sitting by me, we're working out of, you know, side by side every day. Like really, I'm providing more value to you than you are providing to me at that point. And like, there's still a, you know, I, I, I appreciate the, the value you bring, but let's,

• 11:51Shaan Puri?

  like the, the dollar amount is, um, like, uh, the salary dollar amount is not what, not the value you're getting. Uh, and I think he knows that intuitively, and that's why he said yes, but like, uh, that Ben Graham story always stands out to me. No, no, he's a young guy, just graduated from college.

• 12:08Dharmesh Shah?

  But here's the thing, I think people have a couple of thoughts on that. One is, the salary slash compensation is just one vector of value that you get from a company that you join, right? Another one that you get is you get the learning, whatever it is that they get exposed you to. Another one that you get is a network that you build while you're there, right? So there's all these other things that also in kind of in aggregate, and maybe, and I think it's common for people to over index on the compensation or the kind of current compensation, um, and under index on other things that, um, and then there's just the raw emotional value. Do you like being around the people that you're around? Uh, do you enjoy the idea that you're working on? Like, is it, you know, those things matter as it turns out. Um, I have a fun HubSpot story. So when we started on this compensation thing, um, you know, Brian and I had to pick salaries for ourselves, something more than zero.

• 12:49Dharmesh Shah?

  And so we picked $5,000 a month, right? It's like, okay, well, that's, it's a, it's a number. Um, and, uh, obviously below market value. We'd been out in the market for a while and had worked in our lives. Uh, so when we hired employee number three, um, we had to decide what we were going to pay them. $5,000 hired employee number four, $5,000. And so we just built like, okay, here for the salary, you're here for the wrong reason, right? That, that's not why you're going to join this smotly crew of, uh, of folks. And that lasted. For like a while, it's like we and then we and then it kind of has this inertia built in where it's like, okay, well, all of us sitting in the room chatting with you that we're trying to get you to join the company are all paying each other. I'm paying ourselves $5,000 a month. Now, what do you think you should be able to get when all of us are making $5,000? Of course, that doesn't last forever and you have to.

• 13:33Shaan Puri?

  What was the pitch at that time? So it's not like, you know, no offense to HubSpot, but it's not the sexiest idea. You're not saying we're building the electric car here, you know, like you didn't have that going for you. You know, you might've had like a, you know, your own magnetism, which is like, you know, like for me, I get this cheat code because like this guy, he listens to the podcast and this happens, this podcast is a great talent pipeline for us because people will listen to it and over time they just, they decide for themselves. Either I think this guy's a dummy and he annoys me. Or I think this guy's smart and I really like, you know, I'd love to be hang out with these guys. I think I could learn a bunch from them. And so it becomes an unfair advantage, but you didn't have that back in the day. So what was your, how did you convince people to do this $5,000, you know, Lego block of salary building?

• 14:15Dharmesh Shah?

  So we cheated a little bit, right? Because of the first eight people in the company, seven of them came out of MIT Sloan, the same school that Brian and I went to and we met in class. So it was kind of in network kind of thing. It's like, okay, well, it's just a bunch of friends that sort of know each other in network or whatever. Let's, let's go do this thing, right? And it's also, and they were kind of far enough along in their careers that they were not missing meals or anything like that, right? They had just gone to, you know, business school or relatively good business school. And, and so that was it. It's like, and then the other thing, and this is the

• 14:46Dharmesh Shah?

  part, there's equity, but there's also the, like, this is not that risky, dude. Like, let's say this doesn't work out and we end up being chumps. So the idea is really bad. Three, six months from now, you will basically be able to pick up where you left off, right? There's like, there's no loss other than the opportunity cost of those three to six months. This is not like a irreversible lifetime decision that I've made this call and that's all I'm going to have to be able to do for the next five or 10 years. And that was enough. It's, yeah.

• 15:08Sam Parr?

  Well, did things change? How many people do you think? How many people do you think at HubSpot have made like eight figures because of their equity? And once you worked with those people for a long time and you're like, oh shit, like we, the company went public and like, you don't need to work anymore, which, and, and does that change the dynamic?

• 15:29Dharmesh Shah?

  Um, it hasn't. So to answer your question, so I always have to, there's this little, it only takes like a second and a half for me to translate eight figures into what is that actually? So that's 10 million plus.

• 15:41Sam Parr?

  Yeah, like maybe, maybe, maybe five or 10 million is like the number where you're like, fuck this, I don't need this job.

• 15:48Dharmesh Shah?

  Uh, probably somewhere in the 20 to 30 range, if I had to guess of people that have made that much, um, you know, over 50, maybe even 100, like millionaires in the seven figure range. Uh, but even when that was happening, right? Like, well, a couple of things. One is it distorts it a little bit because as a private company, even though the valuation from the last round or whatever is X, uh, the shares are not liquid, right? So they're worth it, but they're worth it on paper. They can't go out and actually sell their shares. So that's kind of thing. Number one. Um, and so doesn't, even if they want to, doesn't, we can't really change behavior. You can't go off and, um, you know, buy something with, with, uh, with your shares. So that's thing number one. The thing number two, it's that, uh, we did have like this kind of spree decor, right? It wasn't really about the money. It was about winning. It was about

• 16:31Dharmesh Shah?

  kind of building something together. And I, um, I like to believe that it wasn't even really the idea that if we had taken that same early group of 20, 25 people and parachute them into some other company, into some other industry, they're still software and SaaS, that we would have likely done reasonably well as well. I think it came down to the people had good chemistry. They were focused on the right thing. I think we, um, our, our early hiring policy was, um, to hire kind of smart people that get shit done. That was kind of the, the thing, right? We want people that have high, what we call high wattage. They were like measurably smart. If you had to get, have them take an IQ test, we didn't do that, but, uh, measurably smart. Uh, but there's lots of very, very smart people in the world, but they have this kind of predilection to action.

• 17:12Dharmesh Shah?

  Like they could not help, but like if they found a problem, they're going to go try and start solving. They're going to jump in. Um, you know, feet first, and they're just going to do it or head first, whatever the, the phrase is. And that was enough. So we, and we made a deliberate decision not to hire what we call press release hires. Uh, press release hires, when you hire someone and then you feel compelled to issue a press release, say, oh, HubSpot just hired the VP of Sales from such and such company, whatever that is, a 30 year background in doing X. If we felt like we ever hired someone that was worthy of a press release, we did it wrong. Right? That's not the kind of person we were looking for because they may have done amazing things at Google, Microsoft, Facebook, pick your company of choice. But the startup is such a different context and you're you're paying for these kind of specialized set of skills that may or may not be relevant.

• 17:55Dharmesh Shah?

  Arbitrage is really, really hard. So we're bigger on the identify diamonds in the rough, people that are going to be big, you know, it's like you're buying a stock early. Versus going after the folks that already were press release worthy. So.

• 18:09Sam Parr?

  I think I that's been my skill. Sean, you've kind of seen my journey. I think my skill has been finding the diamond in the rough, diamonds in the rough. So we've had like. Well, Sean and I kind of discovered one another, but then like there's Steph Smith, who's now at A16Z. We had Trung, who's popular. We've had a bunch of people who went on and founded different companies. And what I've always looked for, like I purposely have looked for these diamond in the roughs because I was like, I can't afford, you know, to pay X, Y, and Z. So I got to hire this 24 year old who I know will be a boss in like five or 10 years.

• 18:40Shaan Puri?

  By the way, Sam, it's not just that you can't afford them. I remember once the hustle got to the point where you could afford them. You were just kind of disgusted by the concept of somebody making that much money. I remember you were just like. How much do you, how much does this kid over here work? This engineer at my office? And I'd be like, I don't know, like, whatever. He's 150, 170. You're like, 170? Oh, my God, like this is, you know. If this person left, would the company fail? No, no, not at all.

• 19:06Sam Parr?

  Well, it was.

• 19:07Shaan Puri?

  This is crazy.

• 19:08Sam Parr?

  That was 10 year or that was a year.

• 19:10Shaan Puri?

  That was 10 years ago.

• 19:10Sam Parr?

  Like, yeah, so things have changed a little bit, but also like your people would show up to work at like noon and I'd be like. What the hell, man? This guy like just waltzed in and like you're gonna, and he's like, he arrived right when they're serving lunch. But we've, we've like discovered some cool people and I always look for a couple of things. The first thing is actually this is from Paul Graham. He goes, I look to hire animals. Like people who are like, you're a little bit afraid of and they're like, just like freaks where they work a lot. I also work, look for people who are like weird. So I always want like weird people who have like fairly extreme opinions, even if I totally disagree with their opinions. I really like. That someone's like well thought, well, well researched and has a strong opinion on something. But I love like weirdos and eccentric people.

• 19:54Sam Parr?

  And I have found that if you can, at our startup at the hustle, we did a really good job of like accepting weirdos and letting them be odd. And like, we like embraced it and I always found that to be kind of like a, a, we used to say, you know, let your freak flag, uh, let your freak flag fly. And we're like, you know, I don't, I was like, we'll have, we had all types of different people. We, we had, uh, just, just every type of like person we worked at our company and they liked that we like embrace their odd, their kind of like them being different.

• 20:23Dharmesh Shah?

  Yeah, we have something simple. So we have, you know, five kind of core values as part of our HubSpot culture. One of them is, is remarkability or being remarkable. And what we mean by that is there's something noteworthy they've done in their past, or there's something quirky, something different, something that's an outlier about them. And it doesn't have to be specifically business or whatever even role that they're in. But there's like, they're just kind of like off the kind of main beat. Um, and that we've done well with those kinds of people. We give them a home, kind of let them do their thing and it tends to work out. Yeah.

• 20:52Shaan Puri?

  So Sam had weirdos and kind of like, let your free flag fly. You have the, um, the remarkability. Have you done something remarkable? We had one at Bebo that was the same as we, we used to say, we hired degenerates. It's like intentionally a, a word that's usually negative, right? Like we hired to generous and what we said, we would always ask me and Furkan. We noticed this in each other. We were like, dude, we've gone through these phases in our lives where we just got really obsessed with something that didn't have a clear payoff. Like it wasn't the popular thing to be obsessed with. Um, like it wasn't the like cookie cutter, good thing to be obsessed with. Like it wasn't like grades in school. It would be like, you know, for kind of got really into, you know, um, this video game and he was like, yeah, I became like a top hundred ranked player of this game.

• 21:36Shaan Puri?

  And like, it was a total, like, you know, in one hand, I, I knew it was like a waste of time, but like, I couldn't help it. I just loved it. And I'm obsessed with it. I became the best at it and I just wanted to win like so badly. And at some point, I even stopped being about winning. It was just like, I wanted to like, get to like the next level and, and, and keep going. And I had, I had done the same thing with poker. He had done it with poker also. So we kind of identified these. Do you, it's like, hey, do you go through these periods of like three years of deep obsession around some get competitive like thing? And, um, and then when you do, do you like, really like try to study the game and figure out how to like, what are the loopholes in the game? What are the rules of the game? You immerse yourself with other players in the game because like, well, cool. Our game now is just startups and we would try to find people who had some evidence of degeneracy.

• 22:19Shaan Puri?

  It's like, yeah, you come in at noon because you stay up till four in the morning. Like building that, uh, SoundCloud player that works like TikTok for no reason, because you're so annoyed that SoundCloud like is too slow in the way that they develop things. It's like, other people would look at that as like, oh, you're not really reliable or very structured. Or you, you know, why did you work on that? That wasn't even like the task at hand. Whereas we would see that and we'd be like, oh, all we need to do is just point this guy's degeneracy at the right direction and then we'll win. And that was like our mindset.

• 22:48Dharmesh Shah?

  Yeah, I, I, I think of that as a kind of borderline pathological obsession. Like that's like, once you attach yourself, whatever it happens to be, right? And what our job is to kind of bring it just shy of pathological where it's like, kind of harming themselves. But it's like, you can't help yourself. You're gonna like, just dig in and then whether it's video games or whatever it happens to be, people that have, I don't call it a gene, but that have that trait, um, tend to work out well in startups because you're trying to attach yourself to a particular thing of to your problem. Um, the other thing I'm just, uh, where since on the topic of talent, I've got this little, uh, mini framework, works at multiple levels of that abstraction. They're like, um, three kind of vectors of kind of measurement of people. One is that you have the creatives and these are people that start things. They have ideas, they have 180 mile, you know, ideas an hour kind of thing.

• 23:31Dharmesh Shah?

  If you sit down in a room with them, uh, then there are the, so they're the starters. Uh, then you have the completers. Those are the people that can make a list of like, here are the things that need to get done in order for us to ship our product or do whatever. Um, and often those folks are at odds, like the, the idea folks are kind of really frustrated with the, the completers. That are like, I'm just trying to check a box and make our, it's like, yes, but I'm doing this thing and it's not good enough yet. But you have that tension and that's what brings in the third person, which is the collaborator. And the collaborator is really good at communicating, is really good at bridging gaps across departments, across individual people, and kind of pulling it all together. Um, and usually you're looking for someone that has at least some, like a nine or 10 on one of those dimensions. A seven or an eight, another one, and usually very low on the third, right? It's like you can have

• 24:13Sam Parr?

  What are you?

• 24:14Dharmesh Shah?

  Creative, I'm on the creative side. I'm like, yeah.

• 24:17Sam Parr?

  For sure.

• 24:18Shaan Puri?

  Well, how have you?

• 24:20Sam Parr?

  Well, but how? That doesn't make sense to me because you lead a $20 billion software company that you've been doing it for 20 years. Like, and as a CTO, she's like, how on earth you pull that off? And it's public, it's publicly traded, which means you've got to go through all the bullshit that like is the opposite of creativity.

• 24:38Dharmesh Shah?

  Yeah.

• 24:38Sam Parr?

  How do you?

• 24:39Shaan Puri?

  Well, like, well, like, one thing you shared last time, you talked about those little like, kind of calculators or the little like, kind of growth, growth tools that you had built, which was just like, oh, I was just tinkering and I made this little like page load speed test site. And then, or whatever, I don't remember the exact example, but you had built like three or four of those that drove like a substantial amount of traffic for HubSpot early on. And like even now with wordplay, like, you know, you're just, you're still creating stuff even now.

• 25:03Sam Parr?

  Yeah, but we were just talking, we were just talking, he's getting ready for the earnings call. And like, that to me is the opposite of creativity. You know what I mean? That's like, you're, you have so many, you have such a narrow lane that you could stay within. That's like, seems so hard.

• 25:17Dharmesh Shah?

  Yeah, so I'll say this, I have done everything in my, in my power to reduce the time I have to spend on things that I'm not good at. Right, which is the things that are kind of non-creative, not a part of that. So I don't have any direct reports, which is unheard of for a company that, you know, for a founder that has 7,000 people in the company, a lot of them on the kind of product and engineering team, which presumably, you know, CTO would kind of help manage and lead. I don't do that. And so, and the only meetings I go to are where there's some creativity involved. I don't like to go to kind of status things and updates or whatever. It's like, I can read an email as well as the next person. So, but, yeah, but there are things that are non-delegatable that, one of we should, we should probably talk about it since it's on my list of things. So one is earnings calls.

• 26:01Dharmesh Shah?

  Another one is getting on to public stages, right? So for instance, we have an annual conference called Inbound that, you know, the last time it was in person, it had like 25,000 people in the live event, right? Like, it's, it's big and I have to give the keynote every year and I've been doing it for 10 plus years now, which I hate and I'm bad at. But that was one of those, because I'm founder, that was one of those non-delegatable things, right? I couldn't say, oh, well, we're gonna have someone else go do that because. You know, in my role as founder, I have a certain kind of weight to me just by virtue of the title of being a founder versus someone else. So.

• 26:35Sam Parr?

  Sean, listen to this, listen to this Dharmesh story. And Dharmesh, you could fill in the blanks as we go because you could decide how much you want to reveal. But there's been a couple different times, maybe three different times, I've introduced Dharmesh to a founder of a company who was raising money. And literally within five minutes, he replied and said, I looked at the deck, I'm in, or blank him out. Dharmesh, you could reveal if you want to say some of the, some of the times how much it was. But, and he replied with, I'm in. Just so you know, though, I've got one rule, which is I always side with the founder, and I'm always on your team. But the downside of that is like, I'm gonna make close to no time, you didn't say it this way, but is like, I'm gonna make close to no time for you. Or

• 27:18Sam Parr?

  like, you know, like, I think you said it, like, I'm totally gonna be silent, a silent partner. I'm not gonna bother you, which means if you want to bother me, I probably, you know, I'm not gonna talk to you that much. But that's like the stipulations for taking my money. If you want to take it, great, do it. I've seen that happen three different times. And do you want to reveal how much it was or no?

• 27:36Dharmesh Shah?

  I don't recall, but I will say this, I've made roughly, I think, a little over 100 investments now across my angel investment, I will call it a career, but my activities. And 80 to 90%, I've never actually talked to the founders or ever met with them. Over vast majority of my deals, I make the decision within 24 hours. It's like, like, I don't have time to go dig into do due diligence on some industry or whatever. It's like, that's not the point. My point is not that. There's only two reasons I do angel investing. And it's, and none of, neither of them are to make a return. One of them is around living vicariously through other entrepreneurs. I just like, I like that process. And this

• 28:18Dharmesh Shah?

  is, you know, predates even starting HubSpot. And the other one, quite immodestly, is just bragging rights. Is to be able to say five, 10, 15 years from now, it's like, because no one cares like how much you invest. What I was like, oh, yeah, I was in Okta back in the day. I was a Stack Overflow back in the day. I was like, you know, first money on this company, this company, this company. And that feels nice. It's, it's not such a. Kind of magnetism is giving back to the community is purely is like, oh, it'd be cool to be able to have been part of, you know, these great founding teams that went off and built great companies.

• 28:46Shaan Puri?

  I really respect that you said that part because I thought you were gonna say, like, you know, to support the causes I care about. Yeah, I just, you know, just to foster entrepreneurship or like, you know, use the D word, democratize something, something. And instead you said a true thing that I think every angel investor feels is like, it's awesome to have a notch on your belt and be like, yeah, I either I saw that or I backed that, I bet on that and it worked out and it's awesome. It's an awesome feeling. It is a perk of the job and it's a real one. So the fact that you said that to me shows me that you are a real one, Dharmesh.

• 29:21Dharmesh Shah?

  I'm what I refer to myself as like a warm-hearted, red-blooded capitalist. Right? So I have compassion. It's not like I don't like people. I'm not a sociopath, but I'm a capitalist. It's like, okay, well, for instance, this is gonna sound completely immodest, but we opened this door on the last episode, so might as well walk through it now is, so last episode, we talked about kind of putting a value on your time, whatever it happens to be. And that anything that falls below the line in terms of you can outsource a delegate or whatever for less than that, you don't do those things, right? You don't mow your lawn, whatever. And so I haven't, I should recalibrate, but you know, my number personally, the one I use just because the math is easier is like $10,000 an hour. I think that's what I, if I were on the open market, I think I could, I could make that if that's what.

• 30:04Sam Parr?

  Dude, I would have thought higher. I would have thought higher.

• 30:06Dharmesh Shah?

  It is higher.

• 30:08Sam Parr?

  Well, what do you think?

• 30:09Shaan Puri?

  That was the hottest number.

• 30:09Dharmesh Shah?

  It's higher.

• 30:11Sam Parr?

  No, but I think, I think it would be like 50 or 100,000 an hour, maybe. Like, I mean, way higher.

• 30:17Dharmesh Shah?

  One could make the case, but I couldn't make my point without having to make that particular case.

• 30:21Shaan Puri?

  Okay, let me ask you a question to make it real. So you buy something, you book a plane ticket, it's like, whatever. It didn't work out or you deserve a refund, but you'd have to go chase it down. Do you just have somebody who you're like, this is my chief of staff, my EA, that like, I just say, you do it? Or you're like, hey, it was $2,000, but it's below my hourly rate. I'm not gonna do it. I just eat the loss and move on.

• 30:42Dharmesh Shah?

  I don't do it. Because even delegating then requires some follow-up, requires some explanation, and they're going to apologize because they could only get half back, or it was only a credit. It's like, I don't, I don't care. I just honestly don't care. And so, and back to the investment thing. So let's say, you know, my, when I started, my average investment rate was, we'll call it a hundred thousand dollars, give or take a little bit. It's grown considerably since then. But if I spent like five hours doing due diligence, or having founder meetings, or whatever, I basically doubled their valuation, or halved my investment amount, right? Because like, not only did I put cash in, for which I'm going to get shares, but then I put another fifty thousand dollars or a hundred thousand dollars worth of time in, just in the due diligence, which is easier to kind of run up that bill. It makes no mathematical sense why people would do that, right? It's like,

• 31:26Dharmesh Shah?

  okay, do you really feel like you're going to? And the reason they rationalize, and this makes sense, is that if you really believe that as a result of spending that time on the margin, you're going to make better investment decisions. You're going to pick better companies, you're going to do these things. And maybe for the first hour or two, in an early-stage startup, there's just not that much diligence to do, right? Like, what are you going to dig into? It's like, you like the idea, or you don't. You like the founders, or you don't. Move on.

• 31:52Speaker 03

  Our software is the worst. Have you heard of HubSpot? See, most CRMs are a cobbled-together mess. But HubSpot is easy to adopt and actually looks gorgeous. I think I love our new CRM. Our software is the best. HubSpot. Grow better.

• 32:06Shaan Puri?

  Or the, the other part that's obvious, but worth saying out loud, just in case people are like, well, then why are you doing this podcast? Well, you also just do things you like. Those are the things that you don't do, you don't put a dollar amount on because you enjoy them, and therefore it is not a cost to you, it is like, you know, a benefit to you. So, so yeah, if you love gardening, then you garden. You don't put a ten thousand dollar an hour mark on it. Is that fair for you? That's how I think about it, at least.

• 32:30Dharmesh Shah?

  That is fair. And so, what I solve for is I like to solve for, it's a little bit of a squishy term, is just raw impact. I like scale. So if you folks were a much smaller blog, let's just say, it's like, oh, I'm going to reach fifty people as a result of this, and I have ideas that I think are worth sharing. And it was smaller, I'm like... And it's not like, oh, I don't get up out of bed in the morning unless there's at least, you know, 10,000. If this was Morning Brew's podcast, then we're not doing it. Amplify my time, right, to what little time I have left on the planet, what things that I know. So I'm always looking for to do things at scale. Like, how can I find a way?

• 33:06Sam Parr?

  Let, let, speaking of things at scale, let's talk about this thing, because like, on the surface, this thing that you recently did like a year ago is incredibly silly and not worth your time. But basically, I think a year and a half ago, Wordle, is it like a game that, an online game, it's like, a word game that went viral. You built a thing called the Wordplay. Is it wordplay.com? It's wordplay.com, right?

• 33:31Sam Parr?

  By the way, you buy domain names. So you bought the hustle.com for us. You bought me copy that.com. Thank you for that. I forgot to say thank you in person. But, uh, so you buy like a lot of amazing domains, but you have wordplay.com. And did you tweet that it was getting seven million users a week or three? What was the number?

• 33:50Dharmesh Shah?

  Well, so the, I just went and checked with the numbers. Okay. So just to kind of place the timeline in frame. So November and December of last year, 2021, is when Wordle took off. And January is when it really kind of hit its, I think, close to its peak. And that's roughly when the New York Times acquired Wordle. And a couple of things kind of, I mean, it was fine. I think it was a great outcome for Josh Wardle. But there were things that were kind of bothering me that were limitations in the game. And I was an avid player of the game. And now it's like, okay, well, the New York Times has bought it. There's no way that anything's going to happen for like years, if ever. So that was kind of thing number one. Thing number two, like it was, it had been a while since I had launched, like some simple free thing publicly, hadn't gone through the process.

• 34:35Dharmesh Shah?

  And there were other things I wanted to learn. It's like, oh, I want to learn more about Vercel and NextJS and TypeScript and things like that. So I was like, okay, well, this is a excuse. And then that intersected with the third thing, which was like the dominant variable in the equation, is my son was taking a Python programming class. He's 11, right? He's going through this process. And for him,

• 34:56Dharmesh Shah?

  It's still very abstract. He's learning programming. He enjoys everything involving technology and screens, but it was abstract. So on a Saturday night, I said, okay, well, let me build something, and Python happens to be my language, build something so he can see, because he plays World, he knows the game. And so I started on a Saturday night with a deadline for Sunday, that I'm going to launch something with him tomorrow. We're going to have Google Analytics on it. So we're going to launch it. I'm going to launch it by tweeting it. And so he knows what social media is, right? He's, you know, so I'm like, oh, we've got this thing that didn't exist yesterday. I wrote the code over the course of last night in Python, the language that you're learning, and we're going to launch it. And now you can see users coming in, right? You can see this. And so now, what

• 35:38Dharmesh Shah?

  I want him to have in his head is that when he has it through the course of his life, as he encounters problems that are solvable with software, which is a lot, like, it's actually tactile for him. It's like, oh, I don't know, I don't have the skills right now to do what, you know, dad just did. But I know it's possible. I know it's possible because he did it in the span of 24 hours, right? So if I want to go off and build a video game, I want to go off and build some tool for my school. I want to build some social network for my, whatever it is. It feels like now it's more approachable for him. He's got years to go before he'll get to that level. But anyway, so those three things sort of came together. And so we launched it on that Sunday. This is, I think, in February or so, give or take. And since then, it's had like 45 million games have

• 36:19Dharmesh Shah?

  been played, nine and a half million people have come through it. Any given moment in time right now, if I were to look at the Google Analytics, it'd be 2, 3,000 people playing, like, right now, which

• 36:30Shaan Puri?

  How did it get so much traffic? Where did the traffic come from?

• 36:33Dharmesh Shah?

  Well, it helps that I have a social media following, right? I've got a million followers on LinkedIn. I've got 300,000 on Twitter. So there's that.

• 36:41Sam Parr?

  That's, that's a lot, but that's not, I wouldn't have thought that, yeah, it's not enough for that, is it? How many users do you think got from that?

• 36:50Dharmesh Shah?

  Um, in the early days, all of it.

• 36:52Shaan Puri?

  Was it big? Was it big right off the bat? Like, the first week was it big? I know the first day, probably a bunch of people checked it out, but like, I'm sure you posted it. And that was the big surge. So what was like the first week roughly? Do you remember?

• 37:02Dharmesh Shah?

  First week was probably maybe fifty to a hundred thousand. So it wasn't, it wasn't a lot, but it was something. Uh, but then is that once you kind of get into it, this is the, you know, the kind of power of iteration is that, oh, well, one of the things that I found missing in the original Wordle was that it was a single player game. Like you played and you played once a day and that was it. Uh, so two big changes that we made in Wordplay. One was it was unlimited play. You didn't, you didn't have to play just once a day. And two, it, it allowed you to challenge your friends. So you could say, oh, I just played this word. I solved it in four turns. Here's my score and send literally a simple link to anyone or a group on, and this happens tens of thousands of times, right? Like someone will take a link that they just played. They're really proud of their score.

• 37:44Dharmesh Shah?

  And then their family, they can post it to their WhatsApp group. Uh, they can post it there, you know, wherever they want and say, I invite you to like beat my score kind of thing. Um, and so that's the viral element. And so then as more people play, you can, and I track that as you might have as a Google Analytics event. And say, how many people, how many times are people clicking that share button and issuing challenges to other people? And so that, once you can kind of get into something where there's a compounding effect on the user base, so as a user base grows. Um, and so now the thing I'm fighting though, right? Is that so that's happening. That's going well. But then the interest in Wordle, uh, in related games is waiting because everything has its kind of peak and it's, uh, and it's, um, and so, but, uh, it's been an interesting exercise. And so we, on the kind of learning path, one of the things I hadn't done in a while was like, okay, well, what's traffic actually worth?

• 38:28Dharmesh Shah?

  Let's say I had to make a living on this thing or make the company quote unquote, or project profitable. So I put Google AdSense on it, which is the easiest thing to do and discovered that, like, if I weren't bothered by the fact that there would be two ads on the main game board page, if I were solving for monetization, it was like ninety thousand dollars a month. Uh, in Google Ads.

• 38:47Shaan Puri?

  Wow.

• 38:48Dharmesh Shah?

  Based on the traffic. Yeah.

• 38:49Shaan Puri?

  Wow. I thought you were gonna say way less.

• 38:51Sam Parr?

  Yeah, I thought he was gonna say like five grand a month, but ninety grand a month and you're, you only have, your only costs are hosting, right?

• 38:58Dharmesh Shah?

  Yeah, and my time.

• 39:01Sam Parr?

  Right. And first of all, Sean, go to wordplay.com and then go to like the about page. His about page is incredibly well-written. It's wonderful copywriting. It's wonderful. You've got a wonderful voice. It says, I'll just read the first sentence, but it says, why would you do this? Or better yet, why would I do this? That's a really good question. My wife asked me the same question. And then you like go on to explain why. It just, you're quite a good writer for also being like this amazing engineer. Typically those.

• 39:28Dharmesh Shah?

  I went to a power writing course that Sean put on. You know that, right? It's like I'm not. I do get around here with my.

• 39:33Shaan Puri?

  The alumni.

• 39:35Shaan Puri?

  I like to say I taught Dharmesh everything he knows, even before he met me. I somehow taught him all that good stuff before he built HubSpot.

• 39:42Sam Parr?

  What, uh, what do you, so this is making 90 grand a month, maybe, or about? What do you?

• 39:47Shaan Puri?

  It could, it's not, right? There's no.

• 39:49Dharmesh Shah?

  I turned the ads off because that's sort of not the point. And people were asking me, it's like Dharmesh, why do you have ads on this thing? I'm like, to learn. Like, it's like I've learned what I needed to learn so I can.

• 40:00Sam Parr?

  Was tweeting and posting this on LinkedIn, the only way you got users? What do you think this could sell for right now? And is this the biggest side project you've ever created?

• 40:10Shaan Puri?

  Our buddy tried to buy it. Suli tried to buy it off you.

• 40:13Sam Parr?

  Did he really?

• 40:13Shaan Puri?

  He tweeted out, he's like, I'd like to buy this off you. I've, you know, I've built mobile games before. He was like semi-serious at least. I don't know. I don't know if you talked to him or not, but.

• 40:22Dharmesh Shah?

  I did not.

• 40:23Sam Parr?

  What do you think, like, if you cared? What do you think you could sell it for? Two or three million dollars, maybe?

• 40:29Dharmesh Shah?

  Right now that, um, let's say the ad revenue would go down to like 50,000 or something like that. Cause I haven't turned Google AdSense in a while. That's $600,000 a year. Apply a 5X multiple. So somewhere between two and $10 million would be my guess if I like, if that's what I was solving for. So it's.

• 40:46Sam Parr?

  And is this the, was posting it on LinkedIn and Twitter the only way that you got users? Or did you do some other weird hacks?

• 40:53Dharmesh Shah?

  I had my blog, uh, had my, it's like, I'm a big believer in like, you know, what folks call like the flywheel. There's all these little things that are attached to the flywheel, right? It's like, oh, well, LinkedIn helps a little bit, puts a little energy. Twitter does a little bit and I have my blog and the email goes out and there's like things that I sort of do.

• 41:10Dharmesh Shah?

  Yeah, so it helps, but it's like the hardest part is that cold start problem. Like, how do you get your first hundred thousand people, a hundred to a thousand people? And then it's a matter of like tracking the retention rate on those users. Do they come back? The other thing that's been interesting about Wordplay as far as the lesson learned is that, you know, when it started, the average time a user spent, according to Google, was roughly four minutes on the game. Okay. In the early weeks. And now that number is at 14 minutes is the average time a user spends, you know, across however many thousands of users come in a given day.

• 41:41Sam Parr?

  So, right. What, and is this the biggest side project you've ever created?

• 41:45Dharmesh Shah?

  It depends on how you measure it. So technically, no, not in terms of just like raw traffic. I've built graders and things like that before that have done better, but.

• 41:55Sam Parr?

  What have you built that, what side project have you built outside of HubSpot that gets more traffic than two or three million people?

• 42:02Dharmesh Shah?

  I don't really do side projects. This is my first one that was like clearly because it was a game. Had it been anything other than a game, I would have rationalized some way to bring it into the HubSpot umbrella because I like to have like all my eggs in that basket. But just given the circumstances here, it didn't really make sense. And even now, like I'm thinking about doing a kind of a marketing and sales related edition of Wordplay, right? It's like, oh, the entire list of words or do it based on martech companies. Like, okay, do you know the players in the space kind of thing? And then you can get sponsorships or whatever. Anyway, but yeah, yeah, Website Grader was the, this kind of a project where it was like a free, I'm, I really like low friction things that people can come to the website.

• 42:44Dharmesh Shah?

  This is why my son and I were chatting yesterday is where I'm looking at Flutter, this new development environment and language, well, dark to language, but Flutter is the, the app framework for building mobile apps across iOS and Android and things. It's what the cool new kids are learning. And he's like, no, why would I ever want to build a mobile app? That's like something people have to download. I have to get approval from, you know, Apple to kind of post my, like I, I want to like to just do it like immediately. He's got, and he's right. It's like, okay, anyway, so. That's the Wordplay story. It's been, uh, it's been a lot of fun. I've, um, and it's hard to know with these things like, like where the road leads, like, uh, Wordplay itself may or may not kind of connect back to other things, whatever, but the things I've learned through it, I think will. It's like, okay, well, here's what it takes to build this kind of thing. It's like, okay, well then, yeah, I'm using it to,

• 43:29Dharmesh Shah?

  uh, play around with communities. It's like, okay, can I take the Wordplay user base? What are the things they care about and build a community around Wordplay, you know, using one of the existing kind of community platforms? Um, and, and see if that's a thing, right? It's like, okay, if you could aggregate people with like interests, um, that in itself has value. And I want it to be something, something that kind of self runs, but we'll see.

• 43:49Shaan Puri?

  If you were, uh, I'm going to ask, Dharmesh, if Sam had built this as a side project and he was at the same point you're at right now, what would you like kind of advise him to do? If it was Sam's project and you were just kind of an outsider said, oh, that's really cool. You did that? And it sounds like you've kind of reached this point where you don't really have a direction of where it's going to go next. What would you kind of tell Sam?

• 44:09Dharmesh Shah?

  Um, decide what you want to do, which is, okay, do you want to like take this to the next level and you turn into a hundred million billion dollar business, uh, you know, spit it off? Or decide that it's just going to be a personal project and just like my personal blog is that I made that decision. It's like, I'm not going to try and monetize and hire employees. I'm not going to do any of those things, right? It's going to be, and, and my son will continue to act as head of product, um, because he's the one that tests the thing every morning. Um, and we played tournaments every evening. That's the big new feature that's coming out is a multi-round tournaments. Uh, by the way, in terms of like, I, I think half of what I know, Sean, I, I learned from you. The other half I learned from, from NFM, right? It's like, so one of the things is around chess.com, which you guys talked about, which I've been a,

• 44:51Dharmesh Shah?

  a member and player on for 10 plus years. I knew of the site, but then you think about Wordplay is like, okay, well this is chess.com, but for word game enthusiasts versus chess enthusiasts.

• 45:01Shaan Puri?

  And then like, where are all the other?

• 45:03Sam Parr?

  As a reminder to people, chess.com is like a huge business, like multi-billion dollar valuation.

• 45:10Shaan Puri?

  We talked about this when we talked about chess also, which was what other things are like chess? And we had said Sudoku and we had said, I think we had said like a Scrabble or whatever. Word is.

• 45:21Shaan Puri?

  I think they're almost as big, if not, I think it would be, I wouldn't be shocked if it was bigger than chess. I wouldn't be shocked. I would, I would be more shocked if it was like a tenth the size as the chess enthusiast audience. I would guess it's like in the range and there's very few games that are in the range. And so that alone makes it an interesting comp in that sense.

• 45:40Dharmesh Shah?

  So the, so the lessons you draw from chess.com, right? Which is relatively straightforward is you have like a rating system, right? You have leaderboards and scores. You have challenges. You have social connections where you make your friends on chess.com. So you can invite, like it's all the things, right? That these are very easily translatable into other games like wordplay, right? So anyway, so we'll pick and choose as far.

• 46:02Shaan Puri?

  Can I give you one little feature I think would be cool? Cause leaderboards are always this problem in general where like leaderboard's cool for the top 10 people. And then for everybody else on earth, it's like, oh, great. I'm player number three, 39,000. Fantastic. Right? And so there's all these like, if you, I kind of studied this once. I was like, who solved this problem? And there's really three models that work. One is more like chess and, and games do this. They, they create a rank system. So it's, it's not your number 80,000 in the world, cause that doesn't mean anything. But you go from bronze to silver to gold to platinum to master to grandmaster. And like you, you just compete to get your own level up within that to get to your next badge. And that's a karate belt, the karate belt method, let's call it.

• 46:43Shaan Puri?

  Then there's the next one, which is your social, your rank matters when it's with people you know that are either your friends, your school, your city, something like that. So you could kind of hack a proximity based thing. And then the third one, which I think is somewhat interesting, which is. It doesn't even matter what my rank is, but there's something cool. Like if I go to wordplay right now, I feel like I'm alone in this experience. I don't know that there's 3,000 other people solving this right now. And also, I don't know, I bet you there's like some celebrity that plays wordplay every day, right? Like I bet you like, I don't know, Mila Kunis plays this every day. And I think there's something really cool to like, sort of like a stars, they're just like us vibe of like, if I kind of knew that that ex-known people have solved it for today, that's just kind of interesting. And it's kind of like, you know, makes them more approachable. So I almost wonder if there was like a little feature

• 47:28Shaan Puri?

  like that, where if you're a blue check type person, you could kind of like off in and be like, I either solved it or failed today. And you could just have that as a little board. Anyways, those are my three random feature ideas.

• 47:38Dharmesh Shah?

  Good idea. The one things, and I don't, it's not surfaced on the, on the, this is a really good idea. But one of the things I do have is in the comment, there's, there's commentary. So as you're playing, the software will kind of give you little kind of sometimes snarpy, sometimes fun messages, sometimes data. It's like, oh, you're one of the few people that's ever guessed this particular word. That's not a very common word to use. Congrats. Good for you. Or this is the thousandth time you've used this particular word. You know, points for consistency. So there's this kind of running commentary, but I like the idea of like, just kind of front loading. It's like, here's a number of people that have solved this game. I give you stats at the end of the game. It's like, oh, only 14% of the people or players solved this particular word. And it took them on average seven point, I mean, 4.7 guesses. So yeah.

• 48:17Shaan Puri?

  Can I throw two more at you? This is now my, my future brainstorm for you. If you've ever played Candy Crush.

• 48:22Sam Parr?

  There's nothing more, there's nothing more than like an entrepreneur, there's nothing more than like a person who has no stakes saying, hey, have you thought of, have you thought about, have you thought about this? Why haven't you done this yet?

• 48:33Shaan Puri?

  There's nothing less entertaining on a podcast than me telling you features for wordplay, but fuck it. It's just our podcast. If you've ever played Candy Crush, they do this thing, which was they make, they, so stakes, stakes matter a lot in stories or any kind of like adventure. And so like, you know, if you open up a pack of warheads and you see a black one, oh, that's the really crazy one. Candy Crush does this in their games where if you start a level, it says this is nightmarishly hard, or this is a, you know, medium hard or whatever. So I'd like to see that in the wordplay when I come into every day. I'd like to know if this is a nightmarishly hard puzzle, or if this is just okay. It gets me amped up for my play.

• 49:09Dharmesh Shah?

  That's a really good idea. And it's combining that with your tiering idea, and then we can move on. But so imagine we had a tiering mechanism that you can go from bronze to silver to whatever, to ninja level. You know, right now, when you start the game, you get a random word that. And other people get random words as well. And there's a daily word that everybody plays together. But imagine that like as you move up the rank, it gets harder. It's like now you're a level that few have achieved, let alone solved, right? It's like no one even gets here. You're here. And then you do things for streaks. It's like, okay, well, you're the first person to have solved like 50 games in a row at this tier or something like that. I think that'd be fun. So.

• 49:42Shaan Puri?

  One last one I think you'll like, which is you are a fan of crypto. And I think you would, if you like the crypto ethos. And I think if you could advance the cause of crypto, that would be like a win for you personally. So we gave out this Milk Bunny grant, this like for the Milk, we gave out like a bunch of money to people just to build whatever they want. And one guy, this guy Dave, he built this thing that was like a Wordle game, but it was with crypto, which was just you play Wordle as is. But if you solve it, you could win like one Matic, like a tiny amount or like then he was like playing with different ideas. He's like, oh, there's actually 100 Matic jackpot for the day. And like only winners are eligible for the jackpot. You might, you might get it or you might not. And so you got a bunch of people connecting a wallet. So I think what you could do is you could actually just add that into Wordplay, which was, by the way, there is a

• 50:25Shaan Puri?

  $100 a day prize paid out in Matic or whatever. All you got to do is create a little wallet here and like you might win. And so I think a bunch of your avid players would create a crypto wallet where they might not otherwise. So you onboard new people into the world of crypto. You could create a dead simple meta, either funnel them to MetaMask or create a dead simple crypto wallet that will become like a, the play to earn crypto wallet, you know, for the future. Anyways, that's, I will now stop talking.

• 50:51Dharmesh Shah?

  Also a good idea. Yeah. By the way, I just, so I actually added the ability to connect your, um, connect your Diesel wallet or your Ethereum wallet to Wordplay. And my idea at the time was instead of turning ads off, I'm going to make that the pot. And so as ad revenue accumulates until the next payout, whatever it happens to be, and then it's like, oh, the top 10 winners are going to get this distribution. And let's start over again. So not to make money, but we'll have money coming in through AdSense and then we'll kind of.

• 51:16Shaan Puri?

  Right. A sustainable play to earn game. That's awesome. Yeah. That would be amazing.

• 51:20Sam Parr?

  So let me, Sean, this is an interesting topic, but I understand there's like laws and SEC stuff around what you can and cannot say, just tell me if like you can't. But basically, I think it was in late May, I'm looking at now in like May 25th or something like that. Sean, I don't know if you saw this, but like there was headlines that said like Dharmesh Shah, CTO, co-founder of HubSpot buys HubSpot shares. And I think it was like, was it $10 million? It was, it was a pretty substantial amount.

• 51:50Dharmesh Shah?

  It was over three. Forgot the exact amount is, but.

• 51:54Sam Parr?

  It was millions of dollars. And then suddenly like the stock like the next day like went up because it was like, oh, man, like this insider bought it. He like, he has faith in the company. That was a pretty, that's a pretty cool move. When you're doing something like that, what is your thinking? Like, are you thinking like, like, is it part of you? Like, I just want to prove to the world that I'm brave. Is it part of you? Like, oh, no, this is just undervalued. Like, they're foolish. I mean, like, what's your, what's your motivation there?

• 52:24Dharmesh Shah?

  It's exactly what you said, which is, I just thought the company was undervalued, given the long-term potential. And I've done this before. I did it a couple of years ago, and bought a bunch of shares, I think even more at that time, like at $125 a share, right? I'm like, okay, well, and this is when HubSpot stock had dipped over the ensuing, I mean, the prior two or three months. I'm like, I understand the market's more like it's, but this doesn't make any sense. Like, you know, HubSpot stock to me was worth more than, at the time, $125. Turns out I was right. And so it's, it's a similar thing. It's like, and it does signal belief in the company, right? But it's what I, it's what I believe. And there are regulations around it. And, you know, people ask, like, well, why did you buy at that time? As it turns out, it was the exact window of time. I had to wait a certain period

• 53:09Dharmesh Shah?

  since my last transaction to when I could buy. And the day that I was eligible to buy, I bought. And it's like, okay, the price is low enough. I still have conviction that over the long.

• 53:18Shaan Puri?

  Are you also buying with money that, like, where did this $3 million come from? Let's say, isn't that just stock you previously sold that you now are buying? Or it's not like you have some other huge side.

• 53:27Dharmesh Shah?

  That's exactly right. Yes, yes, yes, yes.

• 53:30Sam Parr?

  Or can you, can you take a loan against your HubSpot shares to buy more?

• 53:34Dharmesh Shah?

  There's like 100 things you cannot do. That's one of them.

• 53:39Shaan Puri?

  Wow.

• 53:39Sam Parr?

  No, I think I saw that the other day and you've done, you've made a few decisions like every once in a while you do something and I'm like, oh, this guy is nutty in a cool way. And that's not exactly nutty, but it's like a pretty bold move. I thought it was a pretty cool move and I, and I saw that and I was wondering what, what was going through your head when you did that. Cause.

• 53:59Shaan Puri?

  What's the psychology like when, uh, I don't know, HubSpot talks like, I'm just rounding. I think it's down like 40, maybe 50%, something like that from the all time high, like during the, the last, kind of the, the peak of the peak last year or whatever.

• 54:14Shaan Puri?

  And so, you know, we come on here sometimes and I'll be like, uh, all right, guys, you know, you know, Sam will be like, dude, how are you? And you lost a bunch of money today. I'm like, yeah, yeah, I lost like a million dollars today and like, you know, ETH, ETH is down and I'm, I'm down a million dollars. I'll share my psychology of like dealing with this, this travesty of a loss or whatever. And I'll, I'll be like, yeah, you know, here's how I think about it. You play that game at like a thousand X higher stakes where like, you know.

• 54:40Sam Parr?

  More like he lost 500 million.

• 54:43Shaan Puri?

  Yeah, exactly. I'm losing 500,000, you're losing 500 million or whatever, you know, something crazy like that. What's, what's your psychology like? Uh, I don't know. Like, I think you know what question I'm trying to ask, even though I don't have the word.

• 54:55Dharmesh Shah?

  How does it feel to lose half a billion dollars is what you're asking me.

• 54:57Shaan Puri?

  Yeah. And how do you deal with that? And like, yeah, go, go.

• 55:00Sam Parr?

  Is that how much you lost, you think?

• 55:02Dharmesh Shah?

  It's more than that, but yeah, who's counting?

• 55:07Shaan Puri?

  He's like, this podcast was fun when we were talking about wordplay.

• 55:12Dharmesh Shah?

  Actually, fine. Like I'm, I'm not really, and I'm not just saying this, uh, but it's true. It does not faze me like one bit because the reality is, um, it does not change my life one iota, right? Other than like, okay, well it impacts, you know, HubSpot employees and children. And I get that, but in terms of me individually, like nothing changes, right? Like I wasn't off planning to buy small, small islands or take over governments or something like that. Or buy Twitter, right? I was not, I didn't have any of those kinds of plans. And so absent those kinds of plans, uh, like I feel sorry for the nonprofits that I would have invested in, but you know, uh, my wife continues to invest. There's, you know, we have, uh, plans to do the philanthropy we want to do.

• 55:55Dharmesh Shah?

  And so it's like, okay, well I still will wake up every day then do the same things I did before. And I'll look at the wordplay things and respond to user emails or what's like, and do my HubSpot stuff. It's like, okay, like what's really.

• 56:04Shaan Puri?

  So you don't even have. You don't even have the self-talk in your head where you kind of need to like, because for me, when it happens, I'm like, you know, I have an instant reaction as I go look at a chart or a price or whatever. And then I give myself a little self-talk and I'm good. Like it lasts 17 seconds, but I do have those 17 seconds. It sounds like you don't even have those 17 seconds because you're like, well, I've already been over this before in my head at some point in my life and I just decided it doesn't matter.

• 56:29Sam Parr?

  Let alone the self-talk. The self-talk is one thing, let alone like that. But and then there's also this other thing that you and I have, Sean, which is like, if the markets are shit for a year or two, like we will change our day-to-day actions. Like, you know, we may not buy X, Y, and Z, or like we might, you know, we're not to that point where it's like, it doesn't matter.

• 56:46Shaan Puri?

  Major cutbacks at the Puri household right now. Major cutbacks.

• 56:50Sam Parr?

  Yeah, it's like, well, we'll maybe change behavior, but you don't even change.

• 56:55Shaan Puri?

  I laid off my son.

• 56:59Dharmesh Shah?

  They change in the other direction, right? So as the market has dipped, my kind of average check size has actually gone up. I've made bigger bets and things because I think valuations are starting to adjust, you know, slowly. So I think there are better deals now. Good entrepreneurs, starting companies. So, but overall, like the psychology of it has just, just does not like have any impact. And like over the long term, you know, I didn't make this up, but is that the, you know, the valuation of a company, which is like the market price, will oscillate around the value, right? And value is like the revenues you have, the products that you build, what are you actually doing for your customers? And so that, you know, if our revenues had dropped off, you know, before something like that had happened, that'd be a different story. But it's like, okay, well, that hasn't changed. We are the same business

• 57:44Dharmesh Shah?

  today, if not better than we were three months ago, six months ago. And the valuation over time will kind of self-correct. It's one of the things I like about the market is that I think things will kind of wash out and we'll see. Yeah.

• 57:57Shaan Puri?

  And a lot of HubSpot's customers are kind of like, you know, medium-sized, let's say, businesses.

• 58:03Shaan Puri?

  So do you like, do you spend much energy being like, okay, where is the economy going? What's going to happen to my customers, which will have some knock-on effect of like, what's going to happen to our business? Do you care or spend energy there? Because I find myself, for the reason I ask, because I find myself. Sometimes going down these rabbit holes of like, okay, what do I think is going to happen? Then a part of me is like, well, does any of that really matter or affect me? Or, you know, is this energy useful? Or is this just sort of nervous energy that I'm wasting thinking about this stuff?

• 58:29Sam Parr?

  And is HubSpot's customer base even? How many customers does HubSpot have? Like 130,000?

• 58:34Dharmesh Shah?

  Yeah, somewhere over that, yeah.

• 58:37Sam Parr?

  Yeah. And I think when I sold, it was 100,000 or just crossed 100,000. In the grand scheme of things, the one of the reasons I sold, I'm like, well, 100,000 customers, that's like, kind of a lot, but that's not that much. I was like, the market's way bigger than 100,000 people who would want to buy this. And so is the, is 100,000 or 150,000, whatever it is, is that number even big enough to have the needle moved significantly when the economy is shit?

• 59:03Dharmesh Shah?

  On a percentage basis, like it's, I'll answer it this way. So I'll answer the first question, then we'll kind of move to the second one, which is, you know, do I spend time thinking about this? Do I do anything about it? And the answer is yes. At HubSpot, we will try to model out, here's, here's the impact we think it could have on our business. But there's two sides to it. There's the kind of defensive side of it. It's like, we want to make sure that we have enough cash in the bank to weather the storm. We don't know how long the storm is going to last and we have models for how, you know, how long it's going to last, how deep it's going to be, those kinds of things as far as impact. But then the other part, which is to me much more exciting, which is, okay, given what we know, what can we do to capitalize on this crisis, right? And this is what's happening right now. What can we do to make this net positive for HubSpot?

• 59:45Dharmesh Shah?

  And we had something similar happen in 2008 at the last, HubSpot was much earlier. So things, even when the pandemic started, well, the things we did is like, oh, there's lots of uncertainty, businesses are struggling, everyone's kind of batting down the hatches. And so we said, okay, we're going to give even more value. We're going to, for our partners, we're going to front them the cash for the revenue we know is coming over time because cash is a, is an issue and we had a bunch of cash in the balance. So we did things that kind of made us stronger, helped our customers. And, and so we're looking for those same kinds of opportunities. I was like, okay, now that everyone's kind of looking at the P and L and looking at all their line items or whatever, is, can we benefit from this? Because HubSpot in some ways is counter cyclical. It's like, okay, well, instead of buying the big incumbent and spending hundreds of

• 1:00:27Dharmesh Shah?

  thousands of dollars, maybe now people that might not have considered HubSpot a year ago would now consider it because there'll be more value conscious now than they were historically. Yeah, so.

• 1:00:38Sam Parr?

  When you were starting the company, so like there's a, you know, if you just look at the math, there's a world where HubSpot in the next five or 10 or who knows how long can be worth like $100 billion, which is, you know, one of the biggest top 200 or something companies in the world. When you were starting the company, did you have a number in your head where you're like, man, I think this, I think this can make $100 million a year, or I think this might be a billion dollar company? Or was it as big as, man, I think this could be worth tens of billions?

• 1:01:07Dharmesh Shah?

  We didn't have a specific number in our head, but we had, um, I'll say comparables for lack of a better term, which is, okay, there are successful software companies that have done similar or related things, either they're in the same market or in the same target customer base, that had achieved it. It's like, okay, well, and this is what we told to VCs at our pitch. We're like, okay, we're not, we think at the time we were just in marketing software. So here was, I'll give you the first 30 seconds of the pitch, is that in the history of software, no one has ever really built a 10 plus billion dollar household name, global brand, marketing software company had never been done. Omniture was the greatest one at the time, with a billion and a half dollar, um, you know, price tag at the time. And we're like, and the reason people, you know, companies have not been built in the marketing tech space

• 1:01:51Dharmesh Shah?

  is because marketing is an arts and crafty kind of discipline. It's about the shade of your logo and you're outsourcing a bunch of creative stuff or whatever, but it's not the kind of problem software solves.

• 1:02:00Dharmesh Shah?

  And our belief was that marketing was increasingly turning into the kind of thing software does solve lots of data coming in. You're trying to make decisions around all this stuff. It's look exactly like an industry that software can help with. And so our thesis was that someday someone will build 100, 200, 500 billion dollar software company that's doing the thing we're trying to do. And we said, it might as well be us. We're relatively nice people and we're, uh, and we're kind of committed to this and seeing it through. So, you know, do we think the odds were relatively high that we would pull it off? No, but did we think there was an opportunity to do the kind of thing that you're talking about? Yeah, others had done it. We were not putting someone on Mars, right? That was not, um, it's like, okay, well, people have done this before and this is just a different time. And maybe now the time is right for a new company to do something that.

• 1:02:43Dharmesh Shah?

  You know, has been done, but but better. This goes a little bit to your Pixar kind of vision. Sean, it's like, OK, well, you know, people sometimes give us like, OK, well, you know, what are you going to do that's different? And why is this? You know, what is the world? The answer is the world does need more Pixar's. And so, you know, saying to you like, oh, you don't really need to do that. It's like telling Elon Musk, does the world really need another car company? And like, they kind of downplay the fact that it's like, yeah, it's got four wheels. I guess you from point A to point B. But it's all like, there's just one interesting element about it makes it completely different, right? It's like, it's the same thing. Like, most ideas that have been super successful are not complete new from whole cloth cut, right? They're like, and I don't like the cliche of building on the shoulders of giants. But it's like, like, just about everything that's ever been done is derivative to some degree. It's just based on your level of abstraction, how many

• 1:03:28Dharmesh Shah?

  steps back you're willing to go. So it's like, OK, yeah, I can see someone building something massive here. It's like, I'll get off my rant. It's like, so we had Facebook did awesomely well. Then Twitter comes along and people said, oh, well, that's just Facebook. Well, you have shorter messages or something like that. It's like Facebook with constraints. With less. And then Instagram comes along. It's like, well, you can post photos on Facebook. Why would anyone ever use Instagram? That's like Facebook with all the other cool things that I like as well, right? No messenger, none of that stuff. And then TikTok comes along. It's like, well, that's just kind of videos that you can do on Facebook, you can do on Instagram, you can do on Twitter. But it's this, it's like, just different enough in a compelling enough way where and it's still a video social net, social

• 1:04:10Dharmesh Shah?

  based video app. And you know, lit the world on fire, right? Like, so even something as old as video or as photos, it's still not over. It's just not over. It's just part of the kind of the human condition right now. Anyway, it's, Sean, if you go off and want to do another Pixar, and if you're ever looking for an investor that will make a decision 24 hours, I'm your guy.

• 1:04:30Sam Parr?

  What was that tweet about, Sean? That was out of left field. What are you saying?

• 1:04:35Shaan Puri?

  Uh, okay. So all my tweets are out of left field. So that's just Twitter. That's what Twitter is supposed to be, right? Just a bunch of left field shit that all gets put in a feed. I was watching, I don't know what I was watching. My nieces were over and they were watching Toy Story and I was like, Toy Story is amazing. Pixar is amazing. And I was like, why is it like, I was like, I want to do something amazing. This is literally how my brain works. It's like, oh, that looks so awesome. That's like an awesome end output. I would be so proud if I had made something like that. I bet I could, right? Like, it's this combination of like, seeing something that is really appealing and then having the delusional belief that like, of course I could do it if I just tried. And so I just thought it to myself. I was like, you know,

• 1:05:17Shaan Puri?

  that would be a fun company to build if you could just make great stories, great movies, and put them out there into the world. That would be so fun as a thing, if that's like the thing you did. And like, hundreds of millions of people, not just like use your product. There's one thing to use your product. There's another thing to like, love it, grow up on it and have like, you know, like this extreme like, nostalgic emotion around, around like these movies, right? Like if I see, you know, for everybody, it's a little bit different, but for me, it's like, I don't know, Home Alone and Mighty Ducks. And then, you know, Lion King. There's like a couple of movies that just like, uh, they meant a lot at the time and they still mean a lot, even though I don't interact with them.

• 1:05:54Dharmesh Shah?

  So I have, otherwise I'm going to forget. There's one thing I need to say on this particular episode because otherwise it'll keep me up at night. So I have like a handful of like frameworks and things I think about the way I think about the world. And this ties back to Sean's next trillion dollar company thing, Pixar, which I think it can be, by the way, Sean, just so you know. Okay. So imagine, let's take a step back. I'm on a whiteboard and the whiteboard, it's the universe of all possible people, everyone on the planet, and he draws a circle with one of your skills. So in Sean's case, let's say we put copywriting as one of the skills that he's in the top 1% or top 5%, whatever number you want to associate with it. And so that's the circle. It's like, okay, X number of people are at Sean's level or better and at copywriting.

• 1:06:34Dharmesh Shah?

  Awesome. Let's say we draw another circle. That's, um, we'll call it crypto. Knowledge is just how crypto works. And that's a group of people. Awesome. Rarer skill, because it's newer, there's fewer people that know how to do that versus copyrighting. We can accept that it'll be a smaller circle. What happens, though, is if you intersect those two circles and turn into a Venn diagram, the number of people that know copywriting really well and also know crypto really well is 100 times smaller than either of those circles combined, right? And this is, we see the same effect like in standardized tests. If you took the SAT or the GRE or the GMAT, there are people that are really good at English portion of the test. There are people that are really good at math portion of the test. But the ones that score really, really well are the ones that are good at both. They don't have to be the best at both,

• 1:07:18Dharmesh Shah?

  because that's the thing that's actually rare, is the combination of the English and the quant. Same thing here. So now imagine,

• 1:07:25Dharmesh Shah?

  so this is what I call it, the trillion dollar Venn diagram success, right? I just made that up. But so you draw those circles of your skills and say, okay, well, I am now not like one in a million, I'm one in a billion, right? Or one in five billion, whatever that is. And if you can convert that into some kind of monetizable business thing or whatever, that's when magic sort of happens. So that's kind of thing number one is like, what's your thing? What are your skills? And what drives the value, how much value will that intersection create is two things. One is, how rare is that intersection? Whether it's two circles or three circles or whatever, how rare is it? And then the other one is how,

• 1:08:04Dharmesh Shah?

  how much does it kind of reinforce the other skills that you already have? So for instance, I'm a software developer. That's one of my, that's my core skill. I've been programming for like 30 years now. That's my thing, deep down inside my core. If I combine that with, I'm going to go off and which I could never do, become an Olympic level swimmer, let's say. Like, also very rare. The intersection of that is like, okay, well, the opportunity that it reveals, because the two things are so unrelated, it's like, I don't know how I would take my ability to build a web app and intersect it with my, like, yeah, there's some things I could do, but I don't know if that would be that huge. But software development is applicable to lots of, if I was going to be an academic researcher, if I was going to go into music, if I was like other things, there's a lot more overlap, to a degree that in fact those two, they reinforce each other. So software helps me do this and that helps me do this.

• 1:08:47Dharmesh Shah?

  And this is one of the reasons, so my advice here was as you're picking skills to acquire, acquire skills that are both rare, but also reinforce things that you're already exceptional at. That will kind of drive that kind of that rarity and that's what drives, drives the overall value, which kind of brings me to is like, And so when I think of things that I want to learn, it's like, okay, well, this is why I got into copy. It's like, if I can, and copywriting is another form of, this is communicating at scale is what copywriting is, right? Like it's in usually textual form. It's like, okay, well, I don't know that many software engineers that can copyright really well. Like literally, other than that have started companies, right?

• 1:09:25Dharmesh Shah?

  It's like, they don't exist, but very rarely do you get like really, really good engineers that went off and read six books on copywriting and took Sean's class. That's not a common occurrence.

• 1:09:34Sam Parr?

  You weren't, you weren't a good writing, a writer before you got into this?

• 1:09:38Dharmesh Shah?

  No.

• 1:09:39Sam Parr?

  Oh, wow. I mean, your writing is great. And by the way, Sean, let's, what's, you gotta pimp it out. Maven.com slash power writing? Or just go to Maven.com and you see it.

• 1:09:48Shaan Puri?

  Yeah, yeah, just go Maven.com, M A V E N dot com. I'm on the homepage. Starts in two weeks. All right, so the, what you said is great. I would add one more circle to that.

• 1:09:57Dharmesh Shah?

  To your Pixar thing, by the way. The reason you might pull it off is because you have a very weird and unique and related level of skill. So yes, there are people that are better, maybe better creatives, better animators, better entertain, whatever. But they don't know crypto. And maybe that's the thing that unlocks the next trillion dollar company is entertainment intersected with crypto. It's the Netflix for the blockchain, whatever it is, right? Something like that, where two things combined that never had been put together in that way before.

• 1:10:22Shaan Puri?

  The, the, the other circle that I would add, that I think people underestimated. So I tweeted this out, right? So people, I didn't explain what the tweet is. The tweet was, I said, the next company I build is gonna be like a new, new age Pixar, like, like the next Pixar. And I think, I think I would work on that project for 30 plus, like 30, 30 plus years. I just keep going with that company. I wouldn't be trying to sell it or flip it or get out of it or whatever. So that was the tweet. And then a bunch of people, I basically had two reactions. One reaction was, awesome, like, where can I sign up? How do I work for this company? That's, that sounds awesome. I love Pixar, you could do it. And those are like fans of MFM type of thing, or people who themselves had been thinking, God, that would be awesome to create another like Pixar type of company. You know, because I love Pixar.

• 1:11:06Shaan Puri?

  Then there was the other half of people that were like, What makes you think you could do this? You know, like, you know how hard it is to make a movie? You know how expensive it is? You know how, how unique, you know, Steve Jobs and, you know, whatever, Lassiter and Catmull? Like, how rare those talents were when they came together? That's a once in a generation company. And then other people were like, one guy had this amazing burn. He was like, check, Aqua Hire, like, green check mark, Aqua Hired, power writing course, podcast, next Pixar. And I was like, oh, thanks. That's, that's pretty solid, actually. And so, you know, a bunch of people were sort of all in the same bucket of like, this is so hard, this won't work, what, you, you can't do it, that's some version of that.

• 1:11:51Shaan Puri?

  And so the third circle, one is like, I'm really great at X, I'm really great at Y. The third is just, I have the courage to go do a thing. And like, Tim Ferriss once told this story. He goes, I went to a business school class, a Harvard Business School class, I gave this talk, and then the talk, I go, oh, by the way, guys, I'm doing this challenge, only for you guys, you know, whatever. I want to get in touch with either Bill Clinton, Jennifer Lopez, or, you know, some sports person, you know, Michael Jordan, or whatever. If anybody here can connect me over email with them, like, you know, just reach out to them, and if you get ahold of them, connect me over email, I will buy you two round the world plane tickets, you know, for, you could fly business class for a year around the world anywhere on my dime. All right, guys, thank you very much.

• 1:12:36Shaan Puri?

  And he told that to one class, and he's like, you know, you have 30 days to complete this challenge.

• 1:12:43Shaan Puri?

  And then, I think, I forgot what it was, it was like, he did it to two classes, but he gave a slightly different message in each. The first one, he just, just said that, 30 days go by, nobody did it, sorry, nobody completed the challenge, he's like, ah, what happened to you? Turns out, nobody even tried the challenge. The perceived difficulty was so high that nobody did it. So in the next one, He told that story and I think he added a twist, which was whoever gets the closest to it wins and all of a sudden like everybody tries and in fact, I think somebody did get in touch and actually successfully completed the challenge. And he was like, he had this principle, which was sort of like, you know, everybody wants to fish where everybody else is fishing because they think it's so easy to catch fish there.

• 1:13:24Shaan Puri?

  He's like, in actuality, often it's easy to just go, go catch a fish where the fish actually are and you, you don't have to base it on how, how many people, how many other people you think have tried something or how what the perceived difficulty is. And in fact, sometimes the bigger you go, the easier something can be because nobody else is even trying to do it. And so I would say like, you know, this Pixar thing, who knows if I'm going to go do this or something else. I tweet things just almost to my prototype. It's like, let me say this out loud. Let me see how that feels. If I sleep and to wake up tomorrow, do I want to tweet five more ideas about that? Or am I over it? It was just a passing fleeting moment. But, but the, the core ingredient, I think most people lack is courage to actually go and do the thing.

• 1:14:04Shaan Puri?

  And I think that's the, the, people put way more emphasis on what skill am I top 1% in? They kind of, they, they under credit themselves. One, one skill you could just have for free. You just got to go, it's like at the sand, the, the deli at the, at the grocery store. Go pull the number is, yeah, I have the courage to actually go do it. Like, you know, I'm, I will go do, pull the trigger on this thing and not wait for other people to kind of like reinforce that it's a good idea to me.

• 1:14:29Dharmesh Shah?

  Yeah. And this is, I could not agree more. And so, and I think people conflate sometimes skill versus talent. And they believe they don't have the talent for entrepreneurship or for design, for programming, whatever it is. In my mind, so skill is something that's learnable. That's an easy definition. Talent is the rate at which you could acquire a particular skill. So if you have a talent for music, that means you will acquire musical skills faster than someone that doesn't have a talent for music. It doesn't mean that someone that doesn't have a talent for music can't learn it. So they may have a ceiling as far as how far they can go. Fine. I get that. But this doesn't mean they can't do it. And so one of the big lessons kind of in my, in my life, in my professional career is that most things are actually skills, not talent. Mostly like it's like you can start with zero like I was I would have been voted

• 1:15:13Dharmesh Shah?

  least likely to ever start a company in my entire like generations of family, right? And that's not a talent I ever had, like until I went off and did it. Like, public speaking was not something that's like, oh, that's a skill. And you and then there's this thing from software engineering. I think it's worth sharing. I think some of the best ideas are we take stuff from other industries and pull them into this thing and apply it here in a weird way. But in software engineering, there's this thing called functional decomposition, which is take a problem, be able to articulate well. So a function that has a set of inputs and an output and what it's supposed to do. And really, all software problems are being able to take the highest order function is, let's say you want to grade a possible investment based only on the website. It's like, oh, I'm going to give you a domain and you're going to give me a score from zero to 100 as to how good this is.

• 1:15:58Dharmesh Shah?

  Okay, well, that function is easy to define. Like, domain goes in, score from zero to 100 comes out. What other functions does that function need in order to pull that off? It's like, okay, I want a function that looks at the domain and looks at the level of SEO they have. That's one layer down. The person that's writing the SEO function goes down levels. Like, I'm going to look at the on-page SEO and see how good they're doing at meta tags and H1 titles. And I'm going to look at the off-page SEO and their link acquisition and that kind of stuff. That's it's like, so if you roll it all down and you go down far enough, individual functions at the atomic level are so simple as to be trivial. What matters is the fact that you were able to abstract it down to that simple thing, right? And so most things can be broken down that way. So so if you look at, oh, I want to become someone that can give a talk in front of 25,000 people on a stage.

• 1:16:42Dharmesh Shah?

  That seems like an insurmountable task for someone like me that's never done that. And that's not my that might not my thing. It's like, oh, well, what does that involve? Number one, you have to have kind of overcome. I didn't have like stage fright. I had severe stage anxiety, right? Stage fright is like, oh, there's a ship that's going to come down from space and just suck you up because you you were so bad. And stage anxiety is like, man, I wish a spaceship would come down and suck me off this stage right now. I want to get off. So there's that, like, don't you know, don't pass out on stage. And then there's the, oh, you learn about storytelling. You'd learn about writing. You learn about slide design. You learn about humor. And I did all those things, right? Read books, took classes on all those components of public speaking. In aggregate, I'm okay now, right? Like, I can do that.

• 1:17:25Dharmesh Shah?

  And then again, then it's practice and you do it over time. So anyway. My point here is startups, whatever skill startups are a skill, figure out what set of skills you need to acquire. Some you'll be good at acquiring because you have the talent. The other one, you're just gonna have to grind it out more than others made, but it's doable. It's a doable thing.

• 1:17:42Sam Parr?

  One question that I had-

• 1:17:43Dharmesh Shah?

  If I can do it, anyone can do it. That's my point.

• 1:17:45Sam Parr?

  I love that. So Sean, Sean kinda, Sean kinda added this thing to your, uh, to your Venn diagram of like, just people brave enough to get started. And would you add another thing, like, with, with the hustle? We sold in year four or five, and I'm, I don't regret it. I'm very happy with that. But I actually, like, we, I looked at the numbers this year, and I was like, oh, wow, we would have made like, maybe like, it's, it was close to the point where like, you could have potentially next year, made more revenue that year than all the revenues, uh, combined. And I'm like, whoa, that's kind of crazy. Like, I, again, I'm happy with it, but like, real value, like, I guess, for me, I was like, real value was created in year like five, six, seven, eight. Of course, you probably could

• 1:18:28Sam Parr?

  say like, when you're in year five, six, seven, eight, you're like, whoa, wow, it's really created in 10, 11, 12. But, um, do you think that, um, what portion of HubSpot and your success has been, well, I'm just real, I'm just willing to shut up and focus on this for 20 years as opposed to, uh, you actually being amazing or good at product and marketing and things like that?

• 1:18:50Dharmesh Shah?

  Um, yeah, here's how I think about it. I think the outcome is a combination of like, dreaming really big and like iterating really small and having tight feedbacks, feedback loops. So the dream really big is you have to have something that can someday translate, and it doesn't have to be as clear a vision as, as, you know, Sean has kind of laid out as far as, oh, it's gonna be, um, Pixar for the new generation. Um, but you have to kind of have, start with something roughly big in mind, um, at least at some level. But then it really comes down to the, the iteration, right? It's, um, I think, and others have demonstrated this through data, is that the quality output is almost, I won't say always, but frequently a function of the number of iterations, not the quality of the, you know, the people. For instance, the one, the common example that's thrown out is, and I've heard it with a pottery class or a

• 1:19:32Dharmesh Shah?

  photography class, but it's like, oh, one set of students divided class in half, uh, let's say it's a photography class.

• 1:19:39Dharmesh Shah?

  One set of students is like, okay, every day you have to submit a photo for the next thirty days while this class is running. The other one is like, at the end of the thirty days, you're gonna submit your best photo. And then your grade is gonna be based on the quality of that best photo. The first class is like, as long as you submit a photo every day, you're gonna get an A at the end of the thirty days. The other one is like, as long as your is a quality material, that photo is going to win. And what's been proven out across disciplines is that the class that did the multiple iterations had a better output than the one who was trying to solve for quality. But the argument, the first one's like, oh, all I really had to do was like submit a photo. It didn't have to be like world-class quality. It's not the best I could do. But just by virtue of doing it, they're gonna make it better and make it better. At the end of the thirty days, they produced a better photo and they produced a better clay pot, if it was a pottery class, than the other one that was solving for quality.

• 1:20:24Dharmesh Shah?

  And they were like too much in their heads trying to say, oh, I'm gonna do the best I can do. Like, no, just do it repeatedly. Uh, but the key to that, it has to be meaningful iteration. If you're just iterating and doing the same thing, you're not learning anything, there's no feedback loop, then the iterations have no value. But if you're, if you have a tight feedback loop, like I'm gonna do this thing and I immediately get response back that tells me whether I got better or got worse. That is amazingly like powerful to be able to do that and compound it over time. So, so I think my, I'm not that special, candidly. It's like, I'm willing to grind it out more than people that are smarter. And I'm a little bit smarter than people that are willing to work, uh, grind it out. That's my Venn diagram.

• 1:21:02Shaan Puri?

  That's awesome. But have you, you've probably seen this, or maybe you guys have done this. But there's this group of like consultants that created this thing called the Marshmallow Challenge, which they go to a company and they give you like a bunch of, um, sticks, uh, one marshmallow, some tape and like a string or something like that. Have you seen this, Dharmesh?

• 1:21:20Dharmesh Shah?

  I think I have, yeah.

• 1:21:21Shaan Puri?

  But I'll kind of summarize for this.

• 1:21:23Dharmesh Shah?

  It's worth sharing, yeah.

• 1:21:24Shaan Puri?

  Yeah, there's, you have it. Basically, they give, they give you this, these set of, um, tools. And they say, okay, your goal, the game is you need to get a marshmallow. The winning team is gonna have a marshmallow like as high above this table as you can. So build your tower as high as you can. If you can, whoever gets the highest marshmallow, whoever's tower has the highest marshmallow at the end, wins. We're right, we're gonna stop the clock after thirty minutes, we're gonna say, hands up. And, you know, your marshmallow, whoever's marshmallow is standing the highest wins. Okay, good, good. So they go and they do this test with like a bunch of different types of people. They do it with consultants, they do it with like kind of doctors and they do it with, um, you know, engineers. They do it with, um, whoever, creatives, like ad agency types. And they're trying to see, okay, which group is gonna perform the best at a challenge like this?

• 1:22:07Shaan Puri?

  And basically across the board, what they found is that they suspected maybe engineers are going to do the best and the engineers do on average do a little bit better than than others, but not by much. They actually are all pretty horrible at it. And I think like, you know, whatever 80, 90% of the groups at the end of the challenge, their marshmallow is on the ground. It is fallen over. It never even, you know, got up at all. Like if you had just put it, if you had just taken like, you know, two sticks and put up one marshmallow on top, you would have won the challenge. And the reason why is, and they did this test with kids and kids actually are phenomenal at this. Kids on average will beat the adults at this game. And why is that? Well, because what happened is that they would give the project to the adults and the adults would spend the first five minutes like delegating roles. Like, okay, you're going to be the person who does the planning. You're going

• 1:22:50Shaan Puri?

  to be the one who you work on the sticks and the bottom structure. We're going to do this over here. Then they would just like, kind of draw out like, okay, let's do a teepee. No, let's do a ladder. Let's do this a cube or shape or whatever. And they would do all this. And at the very end, they would try to stick the marshmallow on. And what they don't realize is the marshmallow is a lot heavier than it looks. And it will outweigh the sticks and it'll all fall over. And because they're doing that thing where they wait till the very end to like, ship the final good product, they don't even realize where the flaw in their plan until like, it's too late essentially. Whereas what kids will do is kids will immediately grab the thing. They'll stick the marshmallow on. And it's like, if the kids don't eat the marshmallow, the marshmallow will like, get into the structure very quickly. And they'll see, oh, it falls over. Okay, it falls over. That means we

• 1:23:33Shaan Puri?

  need to iterate and we need to do things differently than we would have otherwise assumed. And that like one lesson I've done at pretty much every company I've ever started because it's the only way I can get engineers and designers who by nature are often like, sort of like perfectionist or quality and like they in their associate, they in their mind associate, the longer we work at this, the better the quality will be before we ship it. And I'm always like, dude, let's ship it today. Let's see how bad it sucks. And then let's remove some suck from it. And like tomorrow it'll suck a little less and then tomorrow it'll suck a little less again. And the best way I've been able to drive this point home is to give them the marshmallow challenge and not just like, watch the video, watch the TED talk. It's like, no, go fail at this so that you taste defeat and then you will actually learn this lesson.

• 1:24:17Sam Parr?

  Dude, that's like the greatest CEO thing that you've ever done. That's a good one. That's a really good one is to make people do this and then make them watch the TED Talk. That's like, that's a really good leadership tactic. I'm 100% gonna steal that one day.

• 1:24:28Shaan Puri?

  Yeah, it's, it's, it's an awesome one. Um, all right. I know we, we went kind of long. I don't know if we were good to keep going or not, but.

• 1:24:35Sam Parr?

  Ben's telling me, uh, wrap up, but, uh, but, uh, Dharmesh, this is awesome, man. I love having you around. Are you, uh, you, um, the last time you were on was like a year ago, I think. And I've been like, I've been like begging you. I'm like, man, just come on. And so we messaged him today and he goes, I'll just come on today. And I was like, all right, cool. Are you, uh, I actually, I have a quick question. What, you know, people ask me about selling to HubSpot and they're like, has it been good? From a creative perspective, it's been awesome. You guys haven't like, we haven't been told a thing on like what we can and cannot do. Of course, I don't think we do anything where anyone would ever tell us you can't do that. But, uh,

• 1:25:16Shaan Puri?

  Dharmesh, do you ever get complaints about anything we say?

• 1:25:19Sam Parr?

  That's what I was gonna ask. That's what I was gonna ask. Is there anything that like so far? I guess there's nothing that's crossed the line because we've not heard a thing. But like it, we, it's been crazy how productive, uh, this relationship has been. I did not think that because you know, uh, people say one thing and the reality is different, but it's not been that way. That's been pretty cool.

• 1:25:41Dharmesh Shah?

  Yeah. Thank you. I'm glad, uh, glad that's working out in your teams. Have I, it's, you folks have been kind of great for HubSpot. Um, and I know this keeps you up at night in terms of valuation. I've thought about that a lot. Um, might not as much as you have, but at the time, I, I would not beat yourself up over it. I think it was a fair deal. I, I don't know that. And even at that, just so you know, uh, even at that price, uh, and not nothing to do with you, but like it was a board level discussion. We had to just like, okay, it was, do we really want to, is not that it wasn't worth that, but was it worth that to us at the time? Because it was a relatively new, um, new thing that we were doing, but, um,

• 1:26:15Shaan Puri?

  I think there's

• 1:26:16Dharmesh Shah?

  Both sides, but.

• 1:26:18Sam Parr?

  Yeah, for sure. I think there's a world. I think there's a world where in one to three years, the podcast alone is worth more than the deal.

• 1:26:26Dharmesh Shah?

  Yes, I definitely see that. Yes. Yeah. But in the same way to kind of, well, we can kind of wrap on this is that when we were talking early in the beginning of the episode around kind of compensation as being just one of the kind of dimensions of value. In a acquisition, the kind of the valuation that you get, the price tag is just one dimension of value. Then the rest of it is how happy are you? How happy is the team? Did you meet people that will kind of, you will enjoy working with in your future years? Are there your future co-founders? That kind of thing. It's like, we know that this is not forever. We know that going in with, even with people we hire, especially with M and A. But, yeah, hopefully the in aggregate, you know, HubSpot delivers a bunch of value. That's my pitch for why it's okay to join HubSpot if you're ever out there looking, but.

• 1:27:08Sam Parr?

  No, it was awesome. Well, thank you. This is awesome. Phil, what do you think?

• 1:27:11Shaan Puri?

  Yeah, great episode. And I'm glad you used our line against us. I emailed us something. I was like, oh, you should come back on sometime, which is like the sometime is like one of the most dangerous words in the English language. Yeah, because it's like you think it's soon and in reality, it's never. And you pulled a great move, which was what we talked about, which is like, forget scheduling stuff. Like either I want to do it and if I if I can do it right now, let's do it right now. And if not, like the let's not schedule it for the future because just because we didn't want to do it right now. And you were like, how about today? And we were like, all right, let's do it. Perfect.

• 1:27:45Dharmesh Shah?

  And I intentionally made it like open. It's like, okay, I knew when my last meeting was. It's like anytime after this. So it's not even like, oh, like I could have made it work this afternoon, but I was only available for the small window. It's like, no. Any time between 2:00 PM and midnight, if you had come back, I would have been, let's do it. It's, yeah.

• 1:28:02Sam Parr?

  That's awesome. This is awesome.

• 1:28:03Shaan Puri?

  Well, it's a lot of fun. It's a lot of fun. Thank you for coming on.

• 1:28:06Dharmesh Shah?

  All right. Thanks for having me.