EP 57: Brian Halligan (Co-founder, HubSpot) - The Path to Building a $20B Business

In the 57th episode of The Logan Bartlett Show, HubSpot Co-founder Brian Halligan joins to discuss his near-death experience, building a $20B company, and how Apple and Grateful Dead have influenced HubSpot. (0:00) Intro (2:15) Snowmobile Accident (15:36) HubSpot Going Public (26:57) Inbound vs. Outbound (32:54) HubSpot vs. Salesforce (39:10) iPod Influence (43:10) Grateful Dead and Black Licorice (58:01) HubSpot Culture (1:04:44) Learning from Mistakes (1:11:02) Brian’s Schedule (1:14:45) Climate Mixed and edited: Sam Dewees Produced: Rashad Assir Executive Producer: Josh Machiz Music: Griff Lawson 🎙 Listen to the show Apple Podcasts: https://podcasts.apple.com/us/podcast/three-cartoon-avatars/id1606770839 Spotify: https://open.spotify.com/show/5WqBqDb4br3LlyVrdqOYYb?si=3076e6c1b5c94d63&nd=1 Google Podcasts: https://podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5zaW1wbGVjYXN0LmNvbS9zb0hJZkhWbg 🎥 Subscribe on YouTube: https://www.youtube.com/channel/UCugS0jD5IAdoqzjaNYzns7w?sub_confirmation=1 Follow on Socials 📸 Instagram - https://www.instagram.com/theloganbartlettshow 🐦 Twitter - https://twitter.com/loganbartshow 🎬 Clips on TikTok - https://www.tiktok.com/@theloganbartlettshow About the Show Logan Bartlett is a Software Investor at Redpoint Ventures - a Silicon Valley-based VC with $6B AUM and investments in Snowflake, DraftKings, Twilio, Netflix. In each episode, Logan goes behind the scenes with world-class entrepreneurs and investors. If you're interested in the real inside baseball of tech, entrepreneurship, and start-up investing, tune in every Friday for new episodes. Executive Producer: Rashad Assir Producer: Leah Clapper Mixing and editing: Justin Hrabovsky Check out Unsupervised Learning, Redpoint's AI Podcast: https://www.youtube.com/@UCUl-s_Vp-Kkk_XVyDylNwLA 🎥 Subscribe on YouTube: https://www.youtube.com/channel/UCugS0jD5IAdoqzjaNYzns7w?sub_confirmation=1 Follow on Socials 📸 Instagram - https://www.instagram.com/theloganbartlettshow 📱 X - https://twitter.com/loganbartshow 🎬 Clips on TikTok - https://www.tiktok.com/@theloganbartlettshow About the Show Logan Bartlett is a Software Investor at Redpoint Ventures - a Silicon Valley-based VC with $6B AUM and investments in Snowflake, DraftKings, Twilio, and Netflix. In each episode of The Logan Bartlett Show, we sit down with the people behind today’s most important startups and extract the tactics, lessons, and frameworks they’ve learned the hard way. Conversations span hiring to GTM, product, growth, fundraising and everything in between - collectively forming the ultimate playbook to make you a better CEO, investor or board member. Tap follow and enable notifications to stay ahead of the game.

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

• 0:05Logan Bartlett?

  Welcome to the 47th episode of the Logan Bartlett Show. I am your host, Logan Bartlett. On this episode, you're going to hear a conversation I had with co-founder and former CEO of HubSpot, Brian Halligan. For folks that aren't familiar with HubSpot, it's a 20 billion-ish market cap company in the marketing automation space that has since expanded into sales as well as customer service, basically competing with Salesforce.com. Really fun conversation with Brian. We go in a bunch of different directions. He about his decision to step down as CEO and the nearly life-ending incident that led him down that path, as well as founding of HubSpot in the

• 0:47Logan Bartlett?

  early days, partnering with his longtime co-founder, Dharmesh, and what their business marriage has been like over the course of the last 18 years, or whatever it's been. Brian was a very gracious guest. He answered all the questions and was very thoughtful about how to build a company, how to find product-market fit, HubSpot's journey along the way, among a bunch of different things. So trust will enjoy that conversation. Before we get into it, just a brief reminder, like, share, plug, all the usual stuff. We really appreciate all the support in continuing to grow the podcast. And so, without further ado, Brian Halligan, co-founder and former CEO of HubSpot.

• 1:24Speaker 01

  Starting with COVID, it's been black swan event after black swan event. It's just like completely never-adult moment. And before that, there was weird stuff that happened, but nothing like what's happened.

• 1:36Logan Bartlett?

  From a society standpoint, I'm actually interested which one you're referring to, if it's just like societal stuff between COVID and the...

• 1:44Speaker 01

  Societal stuff comes right inside companies. Yeah, COVID, the disease, yeah, COVID, the recession, COVID, the boom, COVID recession number two, which we're in, you had all the social issues. You had a war, doesn't really affect companies as much, but a little bit.

• 2:00Logan Bartlett?

  Good.

• 2:02Speaker 01

  And you have a banking crisis, all within like a couple of years.

• 2:06Logan Bartlett?

  Well, you had an interesting personal

• 2:08Speaker 01

  Yeah.

• 2:08Logan Bartlett?

  timing, COVID too. That was actually my first, I guess, diving right into the meat of it. So you, when did it, when did all that happen? You got in a snowmobiling accident?

• 2:17Speaker 01

  That happened two winters ago. I had a really, really bad snowmobile accident and didn't, didn't think I was gonna live. I didn't think it was gonna live through it.

• 2:27Logan Bartlett?

  You were up in Vermont with your son.

• 2:29Speaker 01

  Up in Vermont with my son. We went kind of off the trail, went down about a mile and slammed into a tree.

• 2:37Logan Bartlett?

  He confused the, the buttons or something? I mean, not that there's culpability in this, but...

• 2:42Speaker 01

  Let's not get into that. But anyway, we went off the edge of a

• 2:46Speaker 01

  small cliff, small cliff, not, not, you know.

• 2:50Logan Bartlett?

  I think a cliff is a cliff. Certainly when you're flying off of it in a projectile.

• 2:54Speaker 01

  And I don't remember it. We both passed out and we're kind of lying in the snow, passed out. And I'm gonna say something I was ever said in your show in a minute. Uh, and

• 3:06Speaker 01

  we woke up and we're both, you know, I had a lot of broken bones as.

• 3:11Logan Bartlett?

  Are you wearing a helmet?

• 3:12Speaker 01

  Oh yeah, helmet cracked. Uh, we both smacked our heads in a lot of pain. And it's 4:30 in the afternoon in Vermont, middle of February, freezing cold day. And I never bring my phone snowmobiling, cause there's just no signal in the whole darned state. Never mind, the snowmobile trails. And so it was about 45 minutes of sitting there in the cold. And I was like, well, maybe if you have my phone. And I reached in, pulled, kind of semi-pulled my phone on. I had just enough signal. No one knew where we were. I had just enough signal to go 911. I never called 911. 911, by the way, that's the killer app.

• 3:54Speaker 01

  That thing works. And the lady called the two local fire stations. They're both volunteer. Fire station people called the volunteers at their home. They took their snowmobiles. Took them about an hour to find us. Pitch black by the time they found us.

• 4:09Logan Bartlett?

  Are you guys talking?

• 4:10Speaker 01

  Yeah, but we, I was in and out of consciousness, just in a lot of pain. And a lot of pain.

• 4:16Logan Bartlett?

  And, and he broke his femur?

• 4:19Speaker 01

  He broke his femur.

• 4:20Logan Bartlett?

  Which I've done.

• 4:21Speaker 01

  His kneecap and hit his head pretty bad.

• 4:23Logan Bartlett?

  And he was 17?

• 4:24Speaker 01

  Yes, 16 or so. He guess who was 17 at the time.

• 4:28Logan Bartlett?

  And you, what were your injuries? Concussion, obviously?

• 4:30Speaker 01

  I broke 13 different bones. Um, I ended up, I got metal. I have, I have three plates and 30 something screws in me. I'm, I'm a walking metal factory.

• 4:44Logan Bartlett?

  When you go through the airport, are they?

• 4:46Speaker 01

  No, they're nonferrous. Zip right through them. Um. And then they sort of drag you like if you get a ski accident and like they wrap you in a toboggan, drag you up and then helicoptered us to Dartmouth University Hospital. And I love Dartmouth University Hospital. They saved our lives. It's a trauma center. I had five surgeries in there for a long, long time.

• 5:07Logan Bartlett?

  So you're sitting there and you're drifting in and out of consciousness. You think you're not gonna make it.

• 5:12Speaker 01

  I was pretty sure we weren't. I was like, we're gonna freeze to death. I didn't think like a coyote was gonna eat us. I thought we would just die of exposure. And then I remembered I had a phone. And the thing that I'm gonna say that no one, I'm sure no one's ever said on your podcast is AT&T saved my life.

• 5:29Logan Bartlett?

  Cause of the cell service.

• 5:30Speaker 01

  I had cell service and it's rare to have cell service in my mind. I just had enough cell service. It saved my life. Now that would be different because you know, the phones and the iWatches have that collision signaling that will happen. But back then it didn't have that. So that was a dark moment. I was like, I don't know how we're gonna get through the night. We were too badly injured to move.

• 5:52Speaker 01

  But yeah, very, very thankful I made it through.

• 5:54Logan Bartlett?

  And the volunteer firefighter that came and got you recognized, or he was the guy that like clears your driveway or something?

• 6:01Speaker 01

  Small world, but the first person who found us, so they sort of spread out to find us. He's asking me questions and he's like, Brian, is this Brian Halligan? I'm like, yeah.

• 6:13Speaker 01

  I'm Joe. I'm your driveway guy. I'm like, Joe, thank you.

• 6:20Logan Bartlett?

  It'd be better that than like, I went to inbound 2014, right? Brian Halligan. Wow. So you're sitting there. What's going through your head?

• 6:31Speaker 01

  What's going through my head is life's short. It could be very short here. And then if I get out of this alive, I don't want to just keep on the path I was going. I want to zig off that path and. And live a different life and make some big decisions in my life. That was going through my head.

• 6:50Logan Bartlett?

  And so then that led to, how long were you, you had five surgeries?

• 6:55Speaker 01

  Yeah, it's in the hospital for a while, rehab for a while, then was in a wheelchair for a long, long time. And I'll tell you, we did something, turns out kind of smart at HubSpot. We had a board meeting two weeks before the accident. And we had the conversation of what happens if Brian gets run over by a bus or, you know, that expression, run over by a bus. And we said, well, Yamini will take over. We all agreed. It wasn't a debate by any means.

• 7:21Logan Bartlett?

  Was that just coincidental that it happened two weeks before you had this like?

• 7:25Speaker 01

  Obviously coincidental, yeah. It wasn't like a plan.

• 7:27Logan Bartlett?

  But it's not like something you do every year or like a refresh on, hey, this contingency of?

• 7:33Speaker 01

  Maybe we do. I don't remember.

• 7:35Logan Bartlett?

  Yeah.

• 7:35Speaker 01

  But we definitely had just finished it. And so I wasn't able to talk to anyone or anything like that. It was COVID. People couldn't visit me. And so it's kind of break glass. So Yamini took over.

• 7:50Speaker 01

  And I was pretty much out of commission for six months and I had a pretty bad concussion. I couldn't work. And so she, she ran and did a fabulous job while I was.

• 7:58Logan Bartlett?

  How long has she been at HubSpot?

• 8:00Speaker 01

  She had been at HubSpot. She started like three weeks before COVID.

• 8:06Logan Bartlett?

  So she hadn't been there that long?

• 8:07Speaker 01

  No, but she was doing great. She helped us get through COVID. The deep, deep down and the up, up, up of it. When she took over as CEO, things were smooth. She did a great job.

• 8:20Speaker 01

  And so when I came out of it, one of my, I didn't want to go back to being public company CEO. I've been doing it for a long time. It's rewarding to a certain extent, but I wanted to do something new.

• 8:31Logan Bartlett?

  Approaching 10 years in the public markets, right?

• 8:33Speaker 01

  Some, I think.

• 8:36Speaker 01

  And I was just ready for a new challenge and that was kind of clicking around the back of my head, but I wasn't planning on doing anything about it. But I'm like, this is, this is the, now I'm going to do it now. And so as I'm getting ready to come out of my. What do we call it? My medical leave, I called my co-founder Darmesh and I told him, I'm not coming back as CEO, I'll come back as chairman, but not coming back. What do you think about Yomini as CEO? He's like, he was super cool. He's like, sure. And then I remember a bunch of conversation, but I had a conversation with Yomini about it and she did not see it coming and didn't want it. It was actually a struggle to convince her to take the CEO gig. She's like, I know you've been through a lot, but let's not

• 9:19Speaker 01

  rush this. You know, I'll be a COO, we'll work together, side by side and we'll build up to this. I say, you basically have two choices. You can be the CEO or going to go find some schmuck from the outside to be the CEO. I think you should do it. You're ready. And so fortunately she did and she did a really nice job.

• 9:35Logan Bartlett?

  That's amazing. I, what, what happens as a public company CEO? I guess Bill McDermott went through something as well when he was, when he was at SAP. What actually happens to the stock price when this happened? Was there anything like, being a public market company versus a private company, like, was there anything that, that ended up happening from a share price standpoint as you're going through all of this?

• 10:04Speaker 01

  I actually don't know.

• 10:05Logan Bartlett?

  Yeah.

• 10:05Speaker 01

  I've never even.

• 10:06Logan Bartlett?

  You'd have to think so.

• 10:07Speaker 01

  I never looked back at it.

• 10:08Logan Bartlett?

  Yeah.

• 10:08Speaker 01

  I actually don't know. It took a couple of days, I think, for people to process how seriously the accident was because no one could call me, no one could come in the hospital. It was like, it was tough to get info. And so I think they actually had to wait a couple of days before they got their arms around how serious it was. And then, then they could tell the street and tell everybody at the same time when it happened. I never looked back to see.

• 10:31Logan Bartlett?

  Yeah, you weren't involved in that.

• 10:33Speaker 01

  I don't know if Wall Street gave a hoot.

• 10:34Logan Bartlett?

  Yeah.

• 10:35Speaker 01

  Maybe the stock price went up.

• 10:36Logan Bartlett?

  Yeah. It's interesting. Wow. What, what an amazing story. And so, so when you, when you were thinking about the transition, you thought through, there's some things I like doing, some things I don't like doing. How much was, hey, I want to get rid of the one-on-one meetings and all the stuff associated with being a CEO within HubSpot. That's what you wanted to remove versus free up time to go do things outside of HubSpot?

• 10:59Speaker 01

  Both. I wanted to get out all the one-on-one meetings.

• 11:04Speaker 01

  And so many other things, the day to day of running a public company, being a public company CEO, it's very hard work. And at times it's really fun, at times it's a drag, but overall, I would say it was great. It was eight years as great, it was just time for me to move on. I wanted to get into climate. One of the things about HubSpot I loved is we have a big impact on our customers and our community and our partners and all that. I'm like, what can I do in climate? That was going to be my next, you know, my next adventure and I wanted to make room in my life to do something in climate.

• 11:35Logan Bartlett?

  At a personal level, it sounds like people recommended you started meditating. Was like universal? Anyone you consulted with sort of seemed to suggest that as something that you should do? Why was that the case and is it something you've actually taken on?

• 11:51Speaker 01

  I think the funny thing that, well, I had a concussion, which I don't recommend for you at home. And I spoke to neuroscientists about it. I had a shaman come and visit me. I spoke to, of course, psychiatrists, psychologists, and no matter who I spoke with, they all said the same thing, meditate, just meditate and you'll get through it. And so, all right, I'll learn to meditate. And so I started meditating back then, helped a lot, I still meditate today.

• 12:19Logan Bartlett?

  Was there anything that they, any reason or rationale behind all this stuff?

• 12:25Speaker 01

  Apparently it's super helpful if you have a concussion. Part of the problem I had when I had a concussion, I was having panic attacks. Meditation is really good for something like that. And they said, hey, you want to go, this panic attack's under control, meditation's kind of the way to go. And they were right, it took a while before they got under control, but it worked. Ironically, like, I just think of my own mind and like, when I'm in the best.

• 12:55Speaker 01

  You know, mindset and happiest and most fruitful part of its meditation. I started after I got healthy exercising every day, you know, weights one day, cardio the next. Even a bigger impact on my psyche and my happiness and my clarity of thinking. Ironically, I think exercise helps your mind as much if not more than meditation.

• 13:18Logan Bartlett?

  I I I've actually found, I've started to do that as well, just like exercising very regularly and kind of getting in a cadence of actually, I went to the gym for, you know, whatever, my entire life, but never actually tracked incremental gains and stuff and really tried to, and you can't really manage what you don't measure, and this is true of companies as well, right? And so actually starting to track, hey, what's my weight? What weights am I doing? How much can I bike? And any, for whatever reason, just being able to see incremental progress or whatever has been super helpful.

• 13:45Speaker 01

  I did. The other thing that happened to me is just I got the new I, the iWatch and started tracking, the iWatch is interesting, but the app, the health app on your phone. My goodness, can you measure a lot of interesting things? And I saw the improvement and I'm very data oriented and it really motivated me to see that improvement, obviously my weight and all that. But I think the biggest return has been in between my ears.

• 14:07Logan Bartlett?

  Mentally?

• 14:08Speaker 01

  Yeah.

• 14:09Logan Bartlett?

  I, it's amazing, all the health, I have one of the eight sleeps that you put on your bed and track, and it's, it's such a snitch anytime I have wine before I go to sleep or a beer or coffee. It calls me out every single time and it's, it's amazing, like all the different things.

• 14:23Speaker 01

  Like half your listeners, I'm obsessed with Andrew Huberman. We're on the, people don't know this, we're on the seventh floor. If Andrew Huberman told me to dive out the window of the seventh floor and land flat in my face on the sidewalk and said it was good for my health, I'd probably do it.

• 14:36Logan Bartlett?

  It's amazing, yeah.

• 14:37Speaker 01

  I, I feel like he's got a whole generation of people who would do anything.

• 14:42Logan Bartlett?

  I had, I tweeted recently that like he could probably convince a lot of adult men to wear diapers and he said it was, he said it was productive. And I, he actually liked it, which is good on Twitter. I was like, good, he at least has a good sense of humor about, about all this stuff. We, we touched on the public market thing. I've, a lot of CEOs, certainly private company CEOs.

• 15:03Logan Bartlett?

  Seem to have some apprehension about going public and say, hey, they're going to be short-term focused and it's going to change the stock price of the culture of the company or the stock price is going to change every day and that'll change the mindset of the employees. And I know it's been very helpful. You all went public at $800 million market cap?

• 15:22Speaker 01

  Yeah, something like that.

• 15:23Logan Bartlett?

  And now, I mean,

• 15:25Speaker 01

  18, 19.

• 15:26Logan Bartlett?

  18, 19, at the peak of everything, it was north of 30, right?

• 15:30Speaker 01

  Yeah, I don't even remember.

• 15:31Logan Bartlett?

  Who's counting? That's probably when you got hurt.

• 15:35Speaker 01

  That was after, actually.

• 15:36Logan Bartlett?

  Yeah, yeah. Did you find going public helpful for HubSpot, culturally and execution-wise?

• 15:47Speaker 01

  I think we did a couple, we do a lot of things wrong. A couple of things we did right, leading up to the IPO for like a couple of years, we, the mantra was IPO is the starting line, not the finish line, starting line, not the finish line. We just repeated it. Like, people were so sick of hearing it. And then, once we went public, if anyone was talking about the share price or looking at the share price in a meeting or putting it on a slide, that was like, don't do it around Halligan. He doesn't want to hear about the stock price. We don't want to be reacting to short-term things moving around the stock price. We did some things internally also that enabled us to keep the level of transparency inside of the company. And I'm not going to get the terms right, but effectively inside

• 16:32Speaker 01

  a company, you have to name a certain amount of officers who can see everything and then the rest of the employees can't see everything. Those named officers can only trade within certain windows because they can see everything. We set it up such that basically everyone's a named officer in the company. And so, everyone can't sell within those windows. And so, that allows us to be a little bit more transparent and act more like we acted pre-IPO. So, we did a series of things that helped HubSpot continue to operate like it was a private company. And we didn't have a whole, it didn't feel that different to the employees, I don't think.

• 17:06Logan Bartlett?

  What about, what about the investor base and setting expectations? Obviously, you went from very charismatic, friendly VCs who have

• 17:15Logan Bartlett?

  Not me personally, but other other VCs that were on the board too. I guess, I mean, the shareholder base diversified, right? And you got much more finance hedge fund, mutual fund, all that.

• 17:26Speaker 01

  It didn't diversify, it totally changed over.

• 17:27Logan Bartlett?

  Yeah, flipped over.

• 17:29Speaker 01

  I would just say that our VCs, I don't have a lot of complaints about our VCs. A lot of people complain about their VCs. My only complaint, by the way, about VCs is every time I come out here, so we're a Boston company. And every time I come out here to the West Coast, we'd go up and down San, this would be before everybody was in San Francisco. We'd go up and down Sand Hill Road and we would get crushed. Like, we just got nosed up and down Sand Hill Road every time. And so I remember those trips very well and I like shudder when I go by Sand Hill Road. But we had a good set of VCs who were super supportive and helpful. They were slightly misaligned at times, but they were generally good.

• 18:06Logan Bartlett?

  Where was that, where did you feel that misalignment?

• 18:10Speaker 01

  We had one particular investor who really wanted us to go bam, Fortune 500. You know, go do the Fortune 500, go do the Marketo, what, go play the same game Marketo is playing. That's the right game to play. That's an example of where, we had a bunch of attention from one particular board member about that. I won't say who it is.

• 18:29Speaker 01

  And different, you know, I kind of think of a board meeting with VCs is you have five, four, let's say four VCs around the table. I used to joke, we needed seats for the four VCs and they each needed an extra seat because they all had their pet rock. And they brought their pet rock to every meeting. You knew what the pet rock was, you knew when in the meeting the pet rock was going to come up. And so we were generally aligned, but there was some misalignment on that.

• 18:51Logan Bartlett?

  Pet rock was just like the whatever their.

• 18:53Speaker 01

  Like that particular example, like why aren't we going? Everybody goes to the enterprise, the play is the enterprise. You guys are missing out, this mid-market doesn't exist, you know, that, you know, don't sell the startups. You got to sell the enterprises.

• 19:04Logan Bartlett?

  That was a very counterintuitive, at least to me, you all, and to some extent, I guess, I mean, Zendesk was kind of in the mid-market as well. Shopify, Toby, they've done a good job at the lower end of the market. But it was an adage of, hey, money is made in the enterprise, right? And that was definitely the pull that Pardat saw, right? These are, these are names long gone. To the average listener that but part of that was a business that Salesforce ended up buying for $110 million or at Exact Target ended up buying, right? And then it got part of Salesforce, Eloqua is now a part of Oracle, probably $800 million acquisition, something like that. Marketo, people maybe you're more familiar with, it was a public company. Ultimately, Vista Equity took it private, then sold to Adobe as well. But those, all those players were more mid-market enterprise focused.

• 19:50Logan Bartlett?

  What was the appeal to the more SMB part of the customer base to you? Because it was definitely a counterintuitive thing to what was consensus at the time, at least among, you know, the VCs that all talk to each other.

• 20:03Speaker 01

  It was an incredibly unpopular decision with investors. It was a big reason why we got our butts kicked on Sand Hill Road. We would own a lot more of HubSpot through those rounds had we, you know, done what they all wanted us to do. We had a counterintuitive opinion on it where we thought that the internet at the time, and this is 100,000 years ago in 2006, disproportionately benefited small businesses relative to large businesses. I actually think this is very true today as well.

• 20:36Logan Bartlett?

  Why do you think that's the case? I agree with you, but what the shift online and how it actually benefits small versus big?

• 20:43Speaker 01

  Just, just if you think way back then, 2006, prior to that era, the people who had marketing leverage in the market, we grew up in marketing, we're totally CRM now, but we grew up in marketing. But the marketing leverage really came with money, like Super Bowl ads, TV ads, radio ads. And your success was very much about the width of your wallet. But as the internet came on and people stopped subscribing to magazines and started subscribing to blogs, they started using Google, and they stopped watching ads on TV and they used DVRs and so forth and so on. There's a whole wholesale change in the way humor behavior was happening. Your success turned into much more about the width of your brain than the width of your wallet. And

• 21:25Speaker 01

  And it was about how nimble and how fast and how smart you can be, not how much money you had. And it was like a wormhole that opened up in the economic engine that you could create a lot of leverage by writing great blog content, create great social content, great video content, you know, starting a podcast, whatever it would be, you can gain a lot of leverage quite quickly.

• 21:47Logan Bartlett?

  And no one knows you're a dog, right? There's the old, you don't know the size of the company because who, you know, it could be one person.

• 21:54Speaker 01

  Okay, let's clarify that because probably a lot of people don't know. So there's, by the way, that, this cartoon I'm going to refer to was in every slide deck we had with the VCs.

• 22:03Logan Bartlett?

  Oh, is that right?

• 22:04Speaker 01

  Yes.

• 22:04Logan Bartlett?

  Oh, that's funny.

• 22:05Speaker 01

  And it's a picture, one picture of a dog typing on the internet and there's another dog, it's a New Yorker cartoon, another dog looking over the shoulder of the dog and the dog typing on the internet looks at the other dog. He says, you know, the great thing about the internet? Nobody knows you're a dog. And it's kind of true.

• 22:21Logan Bartlett?

  Yeah, totally. They don't know the size of the company. Websites all look the same. I mean, it used to be you would go to an office and see how, whatever, luxurious the spaces and see people bustling around. And now you don't know. I mean, you can sort of obfuscate. It's the original catfishing of B2B, I guess, is people don't know. And that was one of the ideas when you were founding HubSpot, Dharmesh had his blog at the time, right? And you were talking to VCs and trying to help them in sales and marketing. So what were those two insights that came together at the genesis of HubSpot?

• 22:53Speaker 01

  Yeah, there were two ahas that led to HubSpot. I was, I was spending a lot of time in startups, helping them with sales and marketing because I had grown up at this company, PTC, that was, you know, back in its day. It was a pretty good company, but back in its day was really good at sales and marketing.

• 23:06Logan Bartlett?

  I want to talk about that because that's like the iconic sales culture, I feel like of, I mean, that manifestation has made its way through Okta and Snowflake and you sort of go through Confluent and like a bunch of the, I mean, that is the med pick, medic, all that stuff. Yeah, that is the, so I want to talk about the influences there, but you had had that experience and.

• 23:27Speaker 01

  And so VCs and startups all were like, can you come in and help us and you talk to us? And I just remember I'd spend time with the founders and the head of marketing, head of sales, and I'd be investigating what they're doing. And they all did the same stuff. They bought a list and they cold call. They bought a list and that's an email. They hire expensive PR firm that do a trade show and that advertise as much as they can. And as I investigated their programs and the way they were doing this stuff, it was pretty similar to what I had done at PTC. It wasn't like we were 50 times better. In fact, I was placing PTC people in these companies. And I was starting to just get kind of negative, like, marketing

• 24:11Speaker 01

  doesn't work. People are blocking this stuff out with caller ID, with spam protection, you name it, just hard to interrupt people. While I was wallowing in some negativity, Dharmesh started blogging his way through B-School. And every time he heard an interesting lecture, he had a little domain on startups.com, he would write a blog article. And this, he was an early startup blogger. And he had 100,000 times more interest in his crap little blog than any of my wealthy venture-backed startups with all these talented people in them. And that's where the original idea came of, like, there's a new way to market, there's a new way to sell. We're going to call it inbound marketing, pulling people in, matching the way you market with the way people buy. And contrast it with the old school way, outbound marketing, which is kind of crappy way to market anyway. And

• 24:56Speaker 01

  that was an idea we kicked around, inbound versus outbound, evangelizing it. And then people said, well, it's hard to do. We have to buy, you know, a marketing automation system, a blog, a website, SEO tools, social media, we have to hire a bunch of consultants, we have to put a CRM system in, like, it's too hard. So that became HubSpot. We built an all-in-one system to enable meal mortals to market online.

• 25:20Logan Bartlett?

  And so 2006, there was websitegrader.com, which maybe you all still own that?

• 25:25Speaker 01

  We do. It's still out there.

• 25:27Logan Bartlett?

  But was that the original product that led to, okay, that was just an ancillary thing to the side?

• 25:32Speaker 01

  A lot of people do. Our original product was HubSpot.

• 25:34Logan Bartlett?

  It was, okay.

• 25:34Speaker 01

  And it was an all-in-one marketing tool. And the value prop was very much around this idea of inbound, like, how do you transform your marketing and get really good, your website and your blog and social, how do you get really good at that? And the way that Website Grader tool came about was I would go on, go visit a potential customer. And before I went to visit that potential customer, I'd be like, hey, I'd interrupt Dharmesh and be like, How does their website code look? And do they have their RSS set up right? And like, I'd ask them a bunch of technical questions.

• 26:09Logan Bartlett?

  SEO tags.

• 26:09Speaker 01

  Yeah, like, how many backlinks are there? Or whatever. And it would bother them. 15 minutes, like, four times a day. And he's finally like, yeah, I'm just gonna, tired of this. I'm just gonna build Brian a little tool so he can.

• 26:23Logan Bartlett?

  So you can scrape and say, hey, we can come help you and figure this out.

• 26:27Speaker 01

  So I just started doing it on my own. And then I was like, you know, it'd be cool if I could just email this out. It would be even cooler if we just put it on the web and people can do it themselves. And so it was really a lead gen tool and a way for us to gain credibility in the market and credibility in the United States of the Prospect that we actually knew what we talked about, which we actually did know who we were talking about. And it spread quite nicely and that became a really good tool to pull people into HubSpot. It was an early freemium offering effectively of HubSpot.

• 26:54Logan Bartlett?

  And, and so there was a decision, though, a debate in the early days of whether or not to call it inbound versus internet marketing. And sort of the branding of category creation, right? Versus be much more, I don't know the right term, objective in how you described, because it was internet marketing, right? But you actually chose this more category creation path. It sounds like that was a little bit of a contentious discussion or something you guys batted around quite a bit in the early days.

• 27:18Speaker 01

  It was, I wouldn't call it contentious, just, we just.

• 27:21Logan Bartlett?

  Iterative?

• 27:22Speaker 01

  Back and forth on whether we should call it internet marketing software, which it was, you know? That's what it was.

• 27:28Logan Bartlett?

  It's a descriptive term.

• 27:29Speaker 01

  And if you said it, people are like, yeah, that's a thing. You're one of those things. Great. Or should we call it inbound and create an enemy called outbound? And we ended up going with that. I think that turned out to be a good call. I would say for those of you listening at home or on your Peloton or wherever you are, it is not for the faint of heart. Like, we put 90% of our marketing muscle behind inbound to the expense of HubSpot, the brand, for many years. We wrote a book called Inbound Marketing. By the way, don't recommend writing a book. It's a lot of work.

• 28:08Speaker 01

  We started a conference, which is a ginormous project around inbound and ran that conference. We wrote two blog articles a week for years about the topic and everything ancillary around the topic. Like, we put our back into that category and it worked, but it's hard work and it doesn't always, doesn't always stick. In fact, we tried that again when we moved from, we moved from being a marketing application company to a CRM suite company and we tried to create inbound sales, inbound selling, inbound sales. We tried all kinds of stuff. Didn't stick.

• 28:42Logan Bartlett?

  Interesting.

• 28:43Speaker 01

  Yeah. It's hard to create a category.

• 28:45Logan Bartlett?

  And, and picking inbound as a, as a category, you're sort of othering outbound, right? Like, that's not what we're gonna stand for.

• 28:51Speaker 01

  You always wanted an enemy.

• 28:52Logan Bartlett?

  You always wanted an enemy and punching up in some ways against that enemy because outbound was the way sales was done. It was sort of the, the vast majority of everything else.

• 29:01Speaker 01

  Everybody was doing outbound and outbound was kind of sketchy. No one really liked cold, receiving cold calls. No one really liked getting cold emails. No one really liked watching those TV ads. Like, it was a good enemy to pick on. It was not a well-liked thing.

• 29:16Logan Bartlett?

  And, and in creating that polarization and, I mean, thinking back to Marc Benioff and the no software

• 29:22Speaker 01

  Totally.

• 29:22Logan Bartlett?

  thing, like the, for people that don't know, I mean, there was a bunch of stories in the late 90s, I guess, early 2000s of Marc Benioff creating a no software logo and doing protests outside of Seville and whatever, all that stuff.

• 29:33Speaker 01

  I think that stuff worked.

• 29:34Logan Bartlett?

  It works. But i- in terms of thinking about inbound as a category, how did you actually resource against HubSpot's brand versus this category creation?

• 29:44Speaker 01

  We starved HubSpot's brand, really starved it.

• 29:46Logan Bartlett?

  Just, hey, we'll evangelize this category and then HubSpot will be the beneficiary of this category.

• 29:50Speaker 01

  Not only that, but like our, we were really early active bloggers. We got quite good at it and when people would visit our website, they wouldn't know we were a software company and that, that was irritating to, to us. They'd think we were a media company and we were like, oh, they have this website creator and they have this blog and, oh, you get software? What does your software do? That took us, yeah, we really suboptimized HubSpot for inbound.

• 30:15Logan Bartlett?

  I aspire to the days that people think of me as a podcaster and not a VC.

• 30:18Speaker 01

  I bet people do, by the way.

• 30:20Logan Bartlett?

  Yeah, actually, the podcast guy.

• 30:22Speaker 01

  Walking into the strip today, I didn't glue you. I didn't know if you were like the hired podcaster for Red Bull. Or if you were.

• 30:29Logan Bartlett?

  If I.

• 30:29Speaker 01

  You now, I know that you actually, you're running the joint.

• 30:32Logan Bartlett?

  It depends. It depends how my investments go. I might end up being the hired podcaster over time.

• 30:37Speaker 01

  I didn't know that you were running Red Bull.

• 30:38Logan Bartlett?

  Yeah, your words, not mine. I think my partners might disagree with that at times. But so you did that. And so then the conference and obviously that became a movement. How did you think about that? Was there always this vision of being a suite of? Because the other thing you all have done very well is you had this wedge. What was the product initially?

• 30:57Speaker 01

  It was an SEO blogging, social, all in one thingy.

• 31:01Logan Bartlett?

  And so there was the marketing automation component, I guess, but you did.

• 31:06Speaker 01

  We didn't really do that.

• 31:07Logan Bartlett?

  You didn't do it.

• 31:08Speaker 01

  In fact, we purposely stayed out of email marketing and marketing automation. And we didn't win that for many years.

• 31:15Logan Bartlett?

  And who was that was that was Marketo and Elacua?

• 31:17Speaker 01

  Well, email marketing was constant contact and exact target and vertical response. And then marketing automation emerged out of that. So that was Marketo, Elacua being the big players. Pardot was in that space. Yeah.

• 31:31Logan Bartlett?

  And at one point you thought about maybe merging with Marketo. You guys did one side and they did the other.

• 31:37Speaker 01

  Yeah, they, Phil Fernandez, the CEO of Marketo and I oddly became really good friends.

• 31:43Logan Bartlett?

  Great guy.

• 31:45Speaker 01

  And even back then, people used to refer to us as doppelgangers. But the truth is, we were top of the funnel, like, you know, pulling people in. They were much more about, oh, I've got a lead. How do I segment those leads and nurture those leads? And so we were about to go into that middle of the funnel, go into marketing automation. We wanted to make a big bet there. And, and we were getting very creative about it. In fact, we visited part, we had a couple of meetings with Pardot about potentially acquiring them. Couldn't get there. We pitched, I pitched Phil on the idea of making MarSpot, HubSpot and Marketo combined. I was declined and we ended up buying a little startup called Performable, who was building kind of a new type of, of a marketing automation system.

• 32:30Speaker 01

  They were a tiny little company at the time, really no sales marketing capabilities, but they had good developers, good product people. So we ended up injecting that into the company and then adding that automation capability.

• 32:41Logan Bartlett?

  Was that David Cancel's?

• 32:42Speaker 01

  Yeah.

• 32:42Logan Bartlett?

  Okay.

• 32:42Speaker 01

  Cancel.

• 32:43Logan Bartlett?

  Who CEO of Drift as well.

• 32:45Speaker 01

  Yep.

• 32:45Logan Bartlett?

  So, so then in that shift, I mean, it sounds like you had some tools, right? I guess, I don't know if that's the right way of describing it. And HubSpot, over time, has iterated quite a bit on building a big product surface area. Now it's marketing automation and customer service and sales and all of that. Was, was that a, the ability to execute on this wide, to kind of go from an individual point solution to essentially a platform today, right? That actually has an integrated suite of stuff that competes with Salesforce and can do whatever, all of that. Was that a, were there architectural decisions that really enabled that? Was that a cultural thing? Was that, like, how were you able to actually build out? Cause so many companies struggle with just getting the first act, right?

• 33:28Logan Bartlett?

  And then the second and third obviously seemed like, you know, pie in the sky dreams. What would you say you guys did uniquely well?

• 33:35Speaker 01

  I'm glad you brought up Salesforce, because we had in our mind that we wanted to move from marketing to sales, eventually build a suite. Our hand was forced a bit. We were, we were a good partner with Salesforce, but they bought Exact Target and Par Dot at the same time, because Exact Target owned Par Dot. And then they bought Radiant Six and Buddy Media, a whole bunch of other companies. And one year, all of a sudden, they went from being, we used to have a funny saying that, that in our pitches to VCs, we used to say Salesforce.com is the sales, it's up to what, it's west to marketing. It's a pretty good, stuck on people's heads.

• 34:05Logan Bartlett?

  Until they buy.

• 34:06Speaker 01

  And we used to say under our breath, like, until Salesforce.com was the sales market. And then they decided they wanted to do that. And all of a sudden, bam, you know, we have a new competitor and it's a really well-run competitor. And so at that point, we said, okay, we've been thinking about doing this. Let's pivot and let's go from being a marketing app to a full front office suite. And the way we did that was unique. We knew we wanted to build sales and service and all kinds of front office applications, but sales would be first. And to do it, we took a team of co-founders. One of them was Brian Balfour, who you probably have interviewed. One was Mark Robert, she might have interviewed.

• 34:50Logan Bartlett?

  Sure, no, I know Mark though.

• 34:51Speaker 01

  And one of them was Christopher O'Donnell, is a HubSpot person. And anyway, that team went through a couple machinations, but it ended up, the team ended up being Christopher O'Donnell and I, being the co-founders of that team. And we separated into kind of a separate part of the building. We allowed them to use a whole different tech stack and to kind of reinvent everything from scratch. And the job of that team was to do two things. One, build a sales application. And two, to build a freemium business model. To that point, our business model really wasn't, people think we started freemium. It wasn't freemium. And so they iterated, we iterated on that over the course of about a year and a half. And we were getting nice market traction on this little, small app we had.

• 35:36Speaker 01

  I wouldn't even call it SFA at the time. And we're getting really nice traction on the freemium motion. And we said, okay, it's time to combine the two.

• 35:44Logan Bartlett?

  Combine the two, marketing and sales?

• 35:46Speaker 01

  Yes. And then what we tried to do is have the sale, the startup inside of HubSpot acquire the bigger company. It's the way we sort of described it. So the guy who ran sales for that group came and ran a big chunk of sales for the marketing. We tried to get the marketing organization to do freemium and all that. So we kind of did a reverse.

• 36:06Logan Bartlett?

  How many people were on sales by the time you did this reverse merger?

• 36:09Speaker 01

  There was probably six, 70 or 80 sales reps on the marketing side, and there were probably 10 on the sales.

• 36:16Logan Bartlett?

  Okay, so in the full team on sales, how many people did you put on product and engineering, focused on sales?

• 36:23Speaker 01

  Oh, and the, oh, so the sales group was probably 20, 12, yeah, 30 people, maybe?

• 36:30Logan Bartlett?

  30 people of a company of 500?

• 36:32Speaker 01

  Yeah. And so that 30-person company, we tried to get them to acquire the other company. I wouldn't say we necessarily pulled that off, but the idea of, oh, we're changing the business model, it's going to be a freemium business model, much lighter touch model, much more disruptive in the industry, because no one in CRM had thought about doing anything like that before. And merging those products was really key.

• 36:54Logan Bartlett?

  And you did this, were you public at the time?

• 36:57Speaker 01

  This is the interesting thing. We did this about a year before we went, we started this about a year before we went public. And so the, on the IPO roadshow, we had a decent marketing business, 100 and something million in marketing revenue, growing pretty fast. And like, oh, by the way, we have this million dollar sales business that we think could be huge one day. And it was just sort of brushed off. And now it's a huge, huge business, but totally brushed off. We didn't get any credit for this second thing. But it was a very awkward time to go public because we had a huge initiative going on around this new sales business and it was the future.

• 37:31Logan Bartlett?

  Did, did, from a product standpoint, did you guys, you said you restarted, gave everyone the autonomy to make all new technological product decisions? How did, because actually merging those two together and bringing them back in, because I think of HubSpot as an integrated suite, one of the things you haven't done that Salesforce has done is acquired a lot of different companies of scale. And that's one of the benefits is you're tightly integrated in a way that they're not. And so how did that merger from a tech code base and all that work?

• 37:57Speaker 01

  Okay, I just remember the early discussion on, this wasn't my decision, but it was an early discussion. The sales org had built a workflow tool, an automation tool. And obviously, the marketing team had an automation tool. It was like, well, which one should we use? And then we were starting to think about the third product, service product. And they were talking about a third automation tool. It's like, wait a second. We just need one automation tool here. We don't need three. And so we made a big decision. You can't see it on your Peloton right now, but like, if I think of HubSpot, like, on the app level, we get five apps, your marketing, sales, service, ops, website. And that's maybe 15, 20% of the developers. The

• 38:41Speaker 01

  rest of the developers are kind of below the line. And we built a set of shared services, you know, automation, website pages, messaging, you name it.

• 38:51Logan Bartlett?

  So you had the UI that faced the customers, but then all the other underpinnings were...

• 38:55Speaker 01

  And then each of the owners of the hubs on top would basically use those shared services. And that enables the whole thing to feel like an Apple-type experience where they all rhyme together. I don't think of HubSpot as even integrated. It's one thing. So then we never really had to integrate stuff together.

• 39:10Logan Bartlett?

  You mentioned Apple, Steve Jobs, what was the story of you going to the iPod as an influence for HubSpot in the early days, which is an interesting thing. I don't know if people realize that the B2B software company influenced by Steve Jobs, but I guess he cast a big shadow.

• 39:25Speaker 01

  Very large shadow. Okay, it was one of the most formative days in HubSpot history. I was in the Sloan School studying. So HubSpot was founded at Sloan.

• 39:36Logan Bartlett?

  You and Dharmesh met there.

• 39:38Speaker 01

  Basically founded in there. And we had a field trip. And the field trip, we went to the West Coast, it was a three-day field trip, and there's probably 80 of us. And in the morning, we visited Apple, and this is 2004 or 2005. And in the afternoon, we visited this little startup called Salesforce.com, and Marc Benioff. In the morning, I remember we walked into Apple. And this is an interesting time to visit Apple because the iPod, it was like Generation 2 of the iPod, it just came out. It was on fire. I mean, he was walking on water when he walked in the room. And he was in a surly mood when Jobs walked in the room. And he was like, how did you get on my calendar? And he was not, he just

• 40:22Speaker 01

  got up on the wrong side of the bed that morning. And then I remember he kind of glared out in the audience. And one of my classmates, JP Gorski, raised his hand, and he said, Mr. Jobs, we're from MIT Sloan School, and we're here to study disruptive innovation, and we can't think of a better person to talk about it than you. And he just, it just melted. I don't know what it was. JP melted him. And Jobs got up there and just talked for an hour and a half straight. And the thing that stuck in my head was, he said, you know, I really built an MP3 player, and there's lots of those on the market, but they're really hard to use. You know, you have to be kind of technical to set them up and get the music synced to them. And then he built this freemium iTunes thing, and then

• 41:02Speaker 01

  I had 99 cents a song. So it's sort of this 1 plus 1 plus 1 equals 10 effect to transform the music industry. And I just was sitting there, I'm like, this is just like the marketing problem. You have to hire an SEO consultant, some social media tools, they put in email marketing system, blogging software, website, CRM. You have to buy like 17 apps to do a proper job. Why can't we build an all-in-one, easy-to-use, you know, system to do that? So that was super formative in my head. We took a bus up from the valley to San Francisco to Salesforce.com. And I'm from the software industry, so I'm very familiar with Salesforce.com. Most of my classmates were not. It was a small startup at the time. No one heard of Mark Benioff for Salesforce.com.

• 41:47Speaker 01

  Mark was really late. And Teen Zuo, who's the

• 41:53Logan Bartlett?

  Zora.

• 41:54Speaker 01

  Zora CEO was like an intern at the time and stepped in for him and did a valiant job. And then Mark kind of came in late and Mark was very generous at his time. And he did a little, you know, his thing. And then the end of his thing, he said, are there any questions? I'm in the front row and I had a lot of questions. And so I raised my hand.

• 42:12Logan Bartlett?

  Everyone else is falling asleep.

• 42:14Speaker 01

  Everyone, no one's falling asleep, but no one's like, I don't, why is this relevant? This startup, this, this company's, you know, whoever. And it's like right on point for me. And Mark talked about how he was going to go to the enterprise and how he was going to go very wide. And I remember, I just remember having a back and forth with him about that, thinking, huh? I wonder if he goes to the enterprise. I wonder if someday someone, and I'm reading, of course, Clay Christensen's Innovator's Letter book. Somebody eventually will come underneath. I wonder if that will actually happen. So those two meetings were quite formative in the history of HubSpot. And I thanked Sloan School for a lot of things, but setting up that day was really, really.

• 42:49Logan Bartlett?

  It's incredible to have both of those.

• 42:50Speaker 01

  On the same day.

• 42:51Logan Bartlett?

  The same day.

• 42:52Speaker 01

  Yes.

• 42:52Logan Bartlett?

  I, whoever the booking event person was for.

• 42:55Speaker 01

  Steve Saka.

• 42:56Logan Bartlett?

  It was Steve Saka. Hopefully, hopefully he had a very good career of getting, you know, he could probably do my job pretty well as well. Now, it's, it's super interesting that, that, that all happened in one day. So another thing, I guess, Grateful Dead. So you wrote a book about Grateful Dead.

• 43:12Speaker 01

  Yep.

• 43:13Logan Bartlett?

  And Grateful Dead also was an influence in a bunch of different ways, I guess. But one was the concept of Black Licorice and how that was how they, they framed what their music was like and who it appealed to. So how did Black Licorice and their distribution strategy, where did that fit in to HubSpot? You have all these like very interesting formative things that sort of influenced the business.

• 43:34Speaker 01

  Yep.

• 43:37Speaker 01

  Grateful Dead was incredibly influential on the formation of HubSpot. It wasn't so much the black licorice thing. I'll tell the black licorice thing, but that wasn't what influenced us. Somebody asked Jerry Garcia about their rabid fans, like, why are people such rabid fans of Grateful Dead? And he said, you know, the Grateful Dead's like black licorice. And the interviewer's like, what? He said, 10% of the world loves black licorice. 90% of the world really does not care for black licorice. We're like black licorice. And that's sort of the internet. And that was something we were calling out at the time of the internet. Like, you have to be a little polarizing. Now, it turns out that happened in spades on the internet and turned out to be a very bad thing. A bad aspect of the internet, the polarization.

• 44:22Logan Bartlett?

  Social media in particular amplified that.

• 44:24Speaker 01

  Incredibly well, but we were advising boring old security software startups to be polarizing.

• 44:30Logan Bartlett?

  Take a stand.

• 44:31Speaker 01

  Yeah, take a stand on something, differentiate yourself. And little did we know what would happen over time.

• 44:36Logan Bartlett?

  So, so what element did influence?

• 44:40Speaker 01

  A lot, but one of the things the Grateful Dead did was they were very much contrarians. They had no, in every way, they didn't like conventional wisdom, in every way. And I wrote a whole book about it. And I'm surprised you weren't one of the five people who read it. But they were actually brilliant in a lot of ways. So they fought conventional wisdom every way. And one of the ways they did that was, let's just go, let's do a little role play, you and I.

• 45:11Logan Bartlett?

  Yeah.

• 45:13Speaker 01

  I know that you're a huge Beyonce fan, right?

• 45:16Logan Bartlett?

  Sure. Who isn't?

• 45:18Speaker 01

  When you go.

• 45:19Logan Bartlett?

  That's a good way to get canceled online, is saying you're not a Beyonce fan, so let's go with this.

• 45:23Speaker 01

  When you go to your Beyonce concert and you show up in San Francisco and you go, and you bring your giant camera and your giant microphone and all your recording stuff, and you show up at the front door, what happens?

• 45:35Logan Bartlett?

  They do not let you take that in.

• 45:37Speaker 01

  They do not let you in. And why would that be?

• 45:42Logan Bartlett?

  Protective of licensing rights and content and all that.

• 45:46Speaker 01

  It makes sense. Now, if you showed up at a Grateful Dead concert and you had giant microphones set up and a big camera and all your gear. What happens?

• 45:57Logan Bartlett?

  Pull you forward and it ends up on nugs.net or whatever.

• 46:02Speaker 01

  It does now, but back in the day, they gave you really good seats in what's called the taper section and everyone set their microphones up and people would record the concerts. And then they get back, let's say to their dorm room and they make recordings of those concerts. And usually people would go to several concerts in a row and we can get into why that is. But you recorded the concerts, you went to 10 in a row, you picked the best one, you record it, you make 10 copies and you give them out. And then let's say you and I were at some party and people are dancing to this strange gypsy music and, and you say to me like, what is this music? It seems great. And your next, your answer is, well, why don't you come check it out? They're going to be playing at Madison Square Garden next week. Come on the road with me and we'll go to Philly and we'll go on tour with them. They were the original like viral marketers. They gave away their content marketers, inbound marketers.

• 46:47Speaker 01

  They gave away their content to pull more people in. That was very influential on us.

• 46:52Logan Bartlett?

  And so, so that coupled with Darmesh's blog, I assume you realize that there's a different way of reaching people and let us, let us enable that.

• 47:00Speaker 01

  Yeah. And the early, the other early blog that influenced was 37 Signals had a really good blog 150 years ago and they stopped it, which was like, oh, I can't believe you stopped it. Uh, but they were, they had so much momentum to their blog and they were terrific bloggers.

• 47:14Logan Bartlett?

  Talk about polarizing on the internet.

• 47:15Speaker 01

  Yeah, they are a little polarizing in the internet. Uh, they were less polarizing back then.

• 47:19Logan Bartlett?

  Yeah, they've gotten.

• 47:19Speaker 01

  And Joel Spolsky was another early business blogger.

• 47:22Logan Bartlett?

  Sure.

• 47:23Speaker 01

  That, that had a lot of traction.

• 47:24Logan Bartlett?

  Joel was at, I guess he was Trello or whatever, that whole family of stuff.

• 47:30Speaker 01

  I lost track of Joel, but we loved his blog and we were like, that's the way to market now.

• 47:33Logan Bartlett?

  Yeah, reaching people. I mean, I guess, I guess this is an element.

• 47:36Speaker 01

  This is it now. You start a podcast or a video or you get good at Tik Tok or whatever, whatever.

• 47:40Logan Bartlett?

  On the, on the product side, so we talked about the evolution of, of HubSpot, but I think a board member said to you, uh, you were more sizzled than steak at one point from a product standpoint, that you had a lot of splash and pizzazz and content, but, uh, and I think I read that you were a 30 NPS, uh, which is, which is actually pretty good in B2B, but not where you ended up.

• 48:05Speaker 01

  So I don't remember what we were, but it was well south of that, more like 15.

• 48:10Logan Bartlett?

  15.

• 48:11Speaker 01

  Yeah. And then we got it up, you know, in the 50s, but, uh, he was right. I remember he said it and it hurt. Um, he's like, you're more sizzled than steak. You got this awesome conference and you had your blog and. You know, you're writing your books, but like, you know, word of mouth isn't good enough in your product, you know, you're losing in the market to Marketo, et cetera, et cetera. That amongst a lot of other data points influenced us and we turned the company into a company that was obsessed with how do you turn a perfect stranger into a paying customer to a company that's completely obsessed with how do you turn a paying customer into a delighted customer that's telling all their friends? And it was a sea change of shift.

• 48:54Speaker 01

  And the way we did that was numerous ways. We changed the bonus incentive plans and comp people on NPS. We started measuring NPS obsessively.

• 49:02Logan Bartlett?

  As like a percentage of management bonus.

• 49:05Speaker 01

  Yeah. We really moved the geography around the P and L, like really the sales and marketing line on the P and L shrunk and the R and D line really grew. And that's still been going on, like as a percentage of revenue, sales and marketing has been shrinking. You would think a company our size, R and D would be shrinking. That's kind of what happens 16 years into a startup. It's continuing to grow as a percentage. We really put our money where our mouths were, really invested in usability, really invested in growth.

• 49:33Logan Bartlett?

  Did that come at the expense of near-term revenue?

• 49:37Speaker 01

  Yeah, definitely. And I'm a big believer in you've got to be able to take two steps back so you can take four steps forward. And there's a million times where we took two steps back to take four steps.

• 49:45Logan Bartlett?

  Did you communicate that to, like, I mean, the investor said this, and so there must have been a recognition. Did you tell the board, hey, we're going to do this and we're going to pick some point in the future? How far in the future was reasonable enough timeline to feel like you could make change around this? Did you think sort of a in-year milestones? Was it six months?

• 50:00Speaker 01

  I remember we started to see the results. We had an outage. That was the thing that really did it. We had an outage on the last day of the quarter. This is many moons ago and.

• 50:15Speaker 01

  I remember there were tears over it.

• 50:21Speaker 01

  Because you're really impacting your customers' lives and that kind of thing happened. It was the worst day.

• 50:27Speaker 01

  And that's when we really had to come to Jesus of we need to change. It wasn't that board member's comment. It was more that outage. It was like, we need to change everything. We need to change the way we build products. We need to change. We put this thing called Compass in and we put in this thing called Main Sale to make sure that never happened again.

• 50:45Logan Bartlett?

  Were those, those are infrastructure monitoring type?

• 50:48Speaker 01

  Yeah.

• 50:48Logan Bartlett?

  Products?

• 50:48Speaker 01

  Basically, but Main Sale is something where at the very bottom of the Main Sale is the app can never go down. And then we go up through several layers and you can't create a new feature unless below the line, you're at A plus status and all the things under that line. And so we continue to do that. And if any teams having stability issues, we put them in code red. They have to get cleaned up down below the line. So we changed the culture of the company in addition to the P and L and the way we build products and that really paid off. We became, we're a very product centric, customer centric company. We didn't used to be.

• 51:21Logan Bartlett?

  Did, did that happen? One of the things, I know Jay Simons is on your board and Jay's a friend and you would do field trips, right? Maybe it was a vestige of your Steve Jobs and Marc Benioff single day, but you were very much a Boston company, right? Which maybe was a ding for a lot of the Silicon Valley companies.

• 51:44Speaker 01

  Definitely a ding.

• 51:44Logan Bartlett?

  But there's, there's advantages there, right? There's two at least very good local schools that you can hire from. And at the time, you're probably competing with not Facebook and Google. You're competing with Akamai and Wayfair and whoever else, right? So you're able to poach talent. But how were you able to internalize aspects of being a Silicon Valley company and doing it in Boston?

• 52:06Speaker 01

  Yep, we used to always refer to or still refer to ourselves as a West Coast company on the East Coast. And I used to run and very much inspired by that Steve Jobs, Marc Benioff trip, a field trip to the West Coast. And I met Jay Simons on one of those field trips. One of the early field trips was on. Um, freemium. Yeah, we want to get really smart about freemium.

• 52:28Logan Bartlett?

  For people that don't know Jay, he's, he was the president of Atlassian for a long time. Now he's, he's unfortunately a VC, but.

• 52:34Speaker 01

  And he was sort of the grand poobah of lightweight go-to-market models and he was.

• 52:38Logan Bartlett?

  He was originally VP of Marketing and then worked his way up as Atlassian got bigger and bigger.

• 52:43Speaker 01

  He was really big on that. And Atlassian, if you look at their geography and their P and L for a B2B company, that's, I kind of think it was mid-market, like they spent nothing on sales and marketing. It's very product-driven. And anyway, I got some time in his calendar with the team. We asked him a lot of questions. I thought he was freemium. He wasn't. He was a master of the trial. Um, but then we visited DocuSign, we visited Dropbox, we visited Google, maybe one or two others. And we all as a team internalized the lessons together. And then when we came back, we're like, okay, we got it. Here's the takeaways. Here's all the changes we need to make. And we did one of those a year on a different topic and that helped us, the whole teams, they plugged into the West Coast. Helped us think like a West Coast company, stay on the cutting edge.

• 53:25Logan Bartlett?

  How do you actually, like, in that shift and being more bottoms up and what you were able to internalize from Atlassian? And maybe it was a part and parcel to the MPS thing that you guys did as well. But what were the, the kind of shifts that, that you actually were, that came away from those Dropbox and Atlassian and all those discussions?

• 53:42Speaker 01

  And this goes back to earlier in the conversation, we started our sales business and it was a freemium model. Um, and then we were trying to apply that to the main business. And we're trying to convince the rest of the organization that this thing's going to work. It's hard to convince them because our model worked already on the marketing side. It was an inside sales-based model. It was a heavy-touch inside model. And so it was an effort to convince them. And so just hearing Jay and all these other really impressive folks talk about how it can work in B2B, um, was convincing. And then we got into more details of like, how do you measure this stuff? Is it weekly active users, daily active users? Like, we get into the minutia of the early parts of product-like growth on that that helped us get educated.

• 54:25Logan Bartlett?

  So one of the other things, I guess, is you've talked about one of the big shifts for a company is going from, or for HubSpot specifically, was going from kind of, I guess it was moving from being employee focused to being customer focused.

• 54:39Speaker 01

  Yeah.

• 54:39Logan Bartlett?

  What, maybe this is related to all of these things, but what was being employee focused? Because I've heard you say that your product is both, you have a product for your customers, which is actually your product. And then you have your culture, which is a product for your employees. And so how do you think about the tension and what was that shift that you guys thought through of going from customer centric, or employee centric to customer centric?

• 55:02Speaker 01

  I remember, well, we also measure NPS of our employees and we always have.

• 55:06Logan Bartlett?

  E N P S.

• 55:06Speaker 01

  E N P S. And we use.

• 55:09Logan Bartlett?

  And you always rate very highly on culture and best place to work and win all these awards, right?

• 55:14Speaker 01

  There's a reason for that. We really think a lot about it and try to make an amazing, we try to make an amazing place to work.

• 55:19Logan Bartlett?

  It's not the massages?

• 55:20Speaker 01

  Uh, there are no massages.

• 55:22Logan Bartlett?

  Yeah.

• 55:23Speaker 01

  And I don't think ping pong massages and any of that really matters in those things. I think it's about, do people resonate with the mission? Do they think management's making smart decisions? And it's more that stuff than the ping pong and the massages. But we, I can tell you a story on how we got into all the culture stuff.

• 55:43Logan Bartlett?

  Yeah.

• 55:44Speaker 01

  The first two years of HubSpot, we didn't, culture was, was a four-letter word. Like, we weren't allowed to talk about it, sort of like stock price at HubSpot now.

• 55:52Logan Bartlett?

  Why? Because?

• 55:54Speaker 01

  We just couldn't measure it. We were analytical people. I don't know.

• 55:57Logan Bartlett?

  Felt too nebulous?

• 55:58Speaker 01

  Felt squishy. And then I joined, and I recommend other founders do this, a CEO group. And there were 10 CEOs that got together once a quarter and they picked a topic and went very deep. And I remember I largely joined it because of Colin Engel was on it. And Colin is the founder of iRobot that makes those Roomba vacuum cleaners. And I would describe my relationship with Colin at the time as man crush. I had a man crush on him. Like, he was, he was on my Mount Rushmore of founders. And he was like five years ahead of me on the journey. And I remember I sat down for the first meeting. I didn't know what the topic was.

• 56:40Speaker 01

  And I sat right next to Colin, of course, and it was culture. And I thought.

• 56:47Speaker 01

  I don't have anything to add. I think it's a waste of time. And then at lunch, Colin pulled me over and he said, why are you so quiet? You don't like this topic, do you? And I said, no, I think it's a waste of time. He said, culture. Culture is how people make decisions when you're not in the room. Culture is how you really scale a company. That's okay. Well, I engaged, listened, it was pretty good. Next morning, I'm in the office. I bumped into Dharmesh and he says, how was it? How's Colin? Was it really good? I said, yeah, it's really good. He said, what was the topic? I said, it was culture. He said, oh, that's really too bad. I said, no, Dharmesh. Culture is how people make decisions when you're not in the room.

• 57:33Speaker 01

  Culture is how you really scale a company. And so from that point on, we started thinking heavily about two products. A product we sell to our customers and a product we effectively sell to our employees. We want both products to continually improve. We want to hide NPS on both products and continue to involve them. We promoted someone internally who is in the marketing organization to run HR to really focus on this and still running it, Katie Burke. And that has really served us quite well.

• 58:02Logan Bartlett?

  How do you focus on culture? Like, what is it that, I mean, obviously, back to our manage for what you measure. I'm sure having E M P S and all of that. But like, did you come up with a set of values and just continue to iterate on that? Did you make sure people are heard? Did you implement a new performance management system? Like, what were sort of the tactics that you did?

• 58:22Speaker 01

  There were two, there are two basic things that founders, all founders can do.

• 58:27Speaker 01

  One is just start measuring employee net promoter scores and just send the same survey you sell to send to your customers. On a scale of one to 10, how likely are you to refer a friend to work at XYZ company? Why? And leave a form field.

• 58:40Logan Bartlett?

  And how often were you doing it?

• 58:41Speaker 01

  Once a quarter. And we've done it once a quarter now for 14 years. People will write novels. Really write novels. And the key is, we published then all of the answers on our Wiki. And we, at the time, we had the world's most, Jay would tell us, you have the world's most active Wiki. And we were publishing everyone's answers so everyone could see in a very transparent way what the issues were that everybody else.

• 59:06Logan Bartlett?

  Did you remove any names and stuff? Maybe a little bit of sanitation?

• 59:11Speaker 01

  We still remove names. We remove foul language, but.

• 59:16Speaker 01

  All 99% of it's out there. If someone's slamming me on there for some reason, it's on there. And the important part is putting it on there. And then what we used to, we used to go to this restaurant next to the house by called Similons. And Similons, it was a Thai restaurant. Like a lot of Thai restaurants, it's, it's a menu has got a plastic covering. And then there's chilies and one chili means it's a little hot and five chilies means, holy crap, that's a hot dish. And so we would categorize all of the long form responses into a Similon style menu. With like, here are the five chili ones. Here's the fourth chili. And we respond to everyone. And sometimes the response was, yes, I know you want, everyone wants double, have your salaries doubled. We're not going to do that and here's why.

• 1:00:01Speaker 01

  So we oftentimes would, would, whatever they were asking for or wanted, we would do. But many times we wouldn't and would explain why. And that over time built up a lot of trust that transparency equals trust. Transparency equals speed. And that over time really helped us. So that's one thing I would do. The second thing I would do would put together, we call it our culture code, call it whatever you want. But like a deck that describes your relationship between the company and the employee. And we did that originally. We did, by the way, Netflix did this first. They built a deck describing kind of their culture. And it was great, but man, Netflix culture was totally different than we wanted our culture to be. So we built our own, it was totally different.

• 1:00:46Speaker 01

  And we based it on a bunch of surveys and we, we hired somebody to help us put it together. And then it described what it's like to be a hub spotter. And then we evolved it over the course of 16 years. And then every six months or so, or so, we'll evolve it. And I, I sat next to Dharmesh on the flight over last night and we were debating making a change of the culture deck. So that thing's a living, it's like the US constitution. You can change it. It's kind of hard to change, but you can change it. So that's evolved quite a bit over time.

• 1:01:13Logan Bartlett?

  How many pages is that?

• 1:01:15Speaker 01

  It's 128 pages.

• 1:01:16Logan Bartlett?

  128 pages. What did it start out at?

• 1:01:18Speaker 01

  128.

• 1:01:19Logan Bartlett?

  Really?

• 1:01:19Speaker 01

  Yes.

• 1:01:20Logan Bartlett?

  You've kept it consistent?

• 1:01:21Speaker 01

  Yes. And we pulled stuff out and added it.

• 1:01:23Logan Bartlett?

  Blood in, blood out, one for one?

• 1:01:25Speaker 01

  Exactly. And the stuff that tends to get pulled out is when we talk the talk on something. And the employees are like, you know, you talk the talk on that, but you didn't walk the walk. So either walk the damn walk or take it out. And so that, that creates the debate.

• 1:01:40Logan Bartlett?

  One of the, I mean, we've had this whole bring your, bring your whole self to work element of it. And I think generationally, right, it used to be people would switch jobs every, I mean, whatever. My parents' generation sort of stayed with one job for extended periods of time. And then people now, 18 months is a good tour of duty, it seems like, in a lot of our tech companies. How did you, and the social issues that we talked about with the pandemic and all of that, obviously manifested itself in a lot of different ways for CEOs. How does HubSpot think about that, of how much of social issues are going to be something that you guys discuss en masse, George Floyd's murder, all these different

• 1:02:23Logan Bartlett?

  things? Like, were these, were these things that you had to rethink over the course of, in the handbook, over the course of the last couple of years?

• 1:02:31Speaker 01

  Big time. I just never thought of my job as the founder and the CEO as weighing in on these issues. Like, I had only worked for two other companies before this, and these wouldn't have come out of the CEO's mouth. But a confluence of just like, the just craziness of what was going on, for example, that George Floyd situation was just, you couldn't ignore it. And just being slapped in the face by it, combined with the fact, I just think modern employees have a different expectation of the relationship

• 1:03:11Speaker 01

  with their CEO and their company. And I don't think this was necessarily the case when we started HubSpot, but the employees who have joined over time, and the existing employees who are my age, let's say, there's just a totally different set of expectations on what it's like to be an employee, and that relationship with the CEO, and the relationship between the values of the company. And I think it's dangerous not to continue to evolve to match the way employees actually live and think and work.

• 1:03:39Logan Bartlett?

  And so how did that change for you all? Like, is this something that you guys made? What was implicit explicit in those 128 pages?

• 1:03:50Speaker 01

  It was exactly what we did. We were very, we reacted to it right away. We had a company meeting the next day about it. We changed the culture code and we made a series. And I remember what we said. We said, we think what's going to happen is a lot of people are going to talk the talk on this and not walk the walk. And so we're going to walk the walk. And we put in a series of long lasting, permanent initiatives that persist today. I just had a Zoom with our Black ERG last week talking about all this stuff. So we did walk the walk on it and I feel really good about that. But yeah, we jumped on it and it changed the way we thought about the role of the CEO. By the way, role of CEO is not easy. It's harder than it used to be.

• 1:04:34Speaker 01

  And the role of the company has changed. And I don't see employees joining today, lightening up on the way they think about that kind of stuff.

• 1:04:43Logan Bartlett?

  What about, there's a deck of mistakes that you all keep as well? Or does that still exist?

• 1:04:48Speaker 01

  Yeah, sort of. So what, we had a monthly, we've got that sun rises and sets at HubSpot from the very beginning, not on the quarter, but on the month. Now it's kind of the day, but sort of the month. And we used to have a PowerPoint deck that would go out. We got in Brad Coffee would produce it on the first day of every month with like, here are all the stats. There are website visitors, leads, customer, all the stuff. And we would make mistakes, you know, often. As a startup, you're going to make tons of mistakes. And I don't think it matters how many mistakes you have. It's about not making that same darn mistake twice or three times.

• 1:05:30Speaker 01

  And so every time we made a mistake, we often would say, boy, wouldn't it be nice to have known which piece of data that might have enabled us to avoid stepping in that pothole? And oftentimes we would come back to data. So we would go and think about that and say, okay, here's the report we should look at every month. So that we can keep an eye on this metric. So for example, we fell behind on hiring on support heads. You fall behind on hiring and support heads. At some point, you're going to have poor support experiences. You're going to have people cancelling like it's going to ripple. And we weren't looking that closely at that. And so then they're, okay, let's have a slide in the deck of how many support reps do we have? What's the tenure of your average support rep? What's the funnel of new candidates as support rep?

• 1:06:15Speaker 01

  And so we're just not going to step in that, that, you know, pothole again. We just call them potholes.

• 1:06:20Logan Bartlett?

  Did Brad keep this?

• 1:06:22Speaker 01

  Yeah.

• 1:06:22Logan Bartlett?

  This, and is that something that people could go reference and just make sure we're not, we're not?

• 1:06:27Speaker 01

  Everyone saw it. I mean, the whole company would get that in the first day of the month. I would definitely flip through it and I knew I could look at every slide and be like, oh, I remember that mistake, that mistake, that mistake, that mistake. And it's, it was our way of avoiding making those same errors over and over again. That was super useful.

• 1:06:42Logan Bartlett?

  Now, what about, we touched on earlier PTC as well as Ray, Ray Ozzy was the other company. You mentioned two companies you worked at, right? And one was kind of the iconic, uh, sales culture, I think. I mean, maybe along Oracle for software sales, PTC. And then the other was kind of a original, I mean, Ray Ozzy, for people that don't know, was the founder of Lotus, uh, way back when. And ultimately became the CTO of Microsoft, right? And ran a lot of productivity apps, a lot of the stuff we use today.

• 1:07:09Speaker 01

  Yep.

• 1:07:10Logan Bartlett?

  Interesting that you sort of grew up in the bottoms up world before it was even a thing, right? Sort of this PLG, uh, side of the house and then PTC as well. Can you talk about those two experiences?

• 1:07:22Speaker 01

  It actually went the other way around. I started at PTC. I was their first BDR. And PTC was a sales machine. We really got good at hiring sales reps, training sales reps, promoting sales reps, doing international.

• 1:07:36Logan Bartlett?

  What was that? What was it that just, uh, made that so good?

• 1:07:40Speaker 01

  We had a really good head of sales and a sales focused CEO.

• 1:07:44Logan Bartlett?

  Who was the head of sales at that point?

• 1:07:45Speaker 01

  It was a guy named Richard Harrison, is retired now. And then it became a guy named John McMahon, whose fingerprints are all over Silicon Valley.

• 1:07:51Logan Bartlett?

  McMahon's a, a legend.

• 1:07:53Speaker 01

  McMahon was my boss and my mentor. And I remember on this, I didn't, I had never met McMahon. He was on the West Coast and I was in. Boston and there was one day the PTC decided we're gonna do international. And on the very same day, they moved him to the Netherlands and they moved me to Tokyo. And they're like, John's head of international, you work for this guy, John. And I'm like, great. And like, we would communicate via fax.

• 1:08:16Logan Bartlett?

  That's so funny. Well, and so McMahon.

• 1:08:18Speaker 01

  I had a fax in my bedroom like all night.

• 1:08:20Logan Bartlett?

  So McMahon, for people that don't know, John was, after PTC, went to Blade Logic with David Charia was the CEO of Blade Logic. Dave is now the CEO of Mongo and John has, he's sort of the father of all these PTC mafia kind of crew.

• 1:08:36Speaker 01

  He's on a bunch of good boards, Snowflake, a whole bunch of good boards and he's, he's a.

• 1:08:40Logan Bartlett?

  He's a Jersey guy.

• 1:08:42Speaker 01

  He's Jersey, he's a boxer. He's, he's one of the more intimidating people you meet in your entire life. But he's got a heart of gold underneath those steely eyes. Yeah.

• 1:08:50Logan Bartlett?

  He's a great guy. And so, so McMahon, you sort of learned all the outbound sales things that you ultimately sort of fought against in some ways. And then what about Ray Ozzy?

• 1:09:02Speaker 01

  Opposite. I mean, if, if, I mean, the politics of PTC was very right of center. The politics of Ray Ozzy, who, he didn't found Lotus, but he's the father of Lotus Notes.

• 1:09:13Logan Bartlett?

  I guess Mitch Kapor was the founder, but.

• 1:09:15Speaker 01

  Ray was a product person in his soul. And at PTC, I learned in very, very left of center. But at PTC, I learned about how do you run a very disciplined organization? How do you build a high-performance sales organization?

• 1:09:32Speaker 01

  They were very, very good at that. And it grew, I learned how Ray Ozzy thought about building products. And I remember him describing his process for thinking about coming up with new products. How we come up with Lotus Notes, how we come up with a product we were selling called Groove, which eventually got bought by Microsoft. And it really sticking in my head. And I brought both of those lessons with me when we started HubSpot. And man, they're, they're both in, Ray Ozzy and John McMahon and PTC are in, really inside the hallways of HubSpot in a big way.

• 1:10:06Logan Bartlett?

  What was the product groove was, it was kind of like an original Airtable of some sorts, right? I mean, way too early for its generation.

• 1:10:13Speaker 01

  It was brilliant. It was just five, 10 years too early. It was Airtable slash. Slack, Dropbox, it was an all in one collaboration. And one of the things I got from him is he was very early on freemium. And we didn't have a lot of traction like it was an early product and like it never really took off. But I got to start learning about that light touch product led growth motion from Ray back in, back in my groove days. And then Ray, we got acquired, Ray took, Bill Gates job as CTO, I believe he's the one who first laid out the memo of what Azure would be. You know, he's a brilliant product person.

• 1:10:56Speaker 01

  And the way he thought about products is very much the way we think about products at HubSpot.

• 1:11:00Logan Bartlett?

  What, what about your schedule? So, so you are, I think you're self-described a prioritizer, a ruthless prioritizer. And you, but you also, even in the early days, you would take a day off from going into the office or scheduled meetings or what was that? How do you actually organize your schedule?

• 1:11:18Speaker 01

  I don't think it's that unusual today. It was unusual back then, but once a week, every Wednesday, I just would have a no meaning Wednesday so I could kind of introvert out and work on projects. I could write, I could prepare my inbound presentation, whatever it would be.

• 1:11:32Logan Bartlett?

  You do a great job faking as an extrovert.

• 1:11:33Speaker 01

  Thank you. And by the way, it's faking.

• 1:11:36Logan Bartlett?

  Yeah, because Darmesh is.

• 1:11:38Speaker 01

  He doesn't fake it at all.

• 1:11:39Logan Bartlett?

  He's very introverted, right?

• 1:11:40Speaker 01

  Yes, he wears it on as a point of pride.

• 1:11:43Logan Bartlett?

  Yeah, I guess that goes back to your meeting, right? Originally, the, his wife had to serve as a facilitator or you didn't pass the original test to, to meet with him.

• 1:11:53Speaker 01

  Well, I can tell you the whole story. It was the night before classes started at Sloan. And it's at the Marriott in Kendall Square in Cambridge and I'm on my second Sam Adams. And.

• 1:12:05Logan Bartlett?

  Very boss now.

• 1:12:06Speaker 01

  Yes, this woman walks up to me. And she's peppering me with questions like it was an I was like these MIT people are strange. She's peppering me and then kind of got up and walked away. She was polite about it, but got him walked away. And it turns out Dharmesh's strategy when he goes to a party is he finds the biggest plant in the whole room and he hides behind it. And then he sends his wife out to scout people he might, you know, want to talk to. And so she was walking, working the room. And the scouting report on me was you'll never like him. He likes the Red Sox. He worked at PTC. You two will never hit it off. So we didn't talk that day. We didn't, we really didn't talk or like click it off for quite a ways into Sloan.

• 1:12:50Speaker 01

  And the she, the three of us laugh about that all the time.

• 1:12:54Logan Bartlett?

  How, I mean, you all have been in now, I guess it's what 18 years. What, what, Hubsaw was founded in oh six?

• 1:13:00Speaker 01

  Yeah, but we were working on it in like oh four, oh five.

• 1:13:03Logan Bartlett?

  So we're approaching 20 years of what, what, what has allowed you guys to be in this monogamous business marriage for, for so long? Yeah. I mean, I don't know. Other, there are other interlopers at times, but I, I mean, it's been the two of you for, for a very long time. What, uh, to other people when they're evaluating co-founders or whatever it is, what do you think's allowed this to succeed?

• 1:13:25Speaker 01

  It's a good question. I sort of think of the two of us, if there's a Venn diagram, you know, he very much came from the engineering side and I came from the sales side. But we had an overlap in like, we wanted to, to enable, we like, we want to sell the startups. We want to help your startups and scale ups. Like, that's always been our thing.

• 1:13:43Speaker 01

  And we wanted to build a company that would be around for decades that our kids would be proud of. So we were very focused on the long term and, and not afraid to take a big swing at it. But we complemented each other really well on, on that side. So the, uh, on both sides of that equation. I think a trap some founders fall into would be like three developers start a company. They're terrific and they build a product, but there's no one kind of thinking about that other side of the equation. Or two ex McKinsey people, like at Sloan, this happens all the time. Two ex McKinsey people start a company and like, no one can really build and maybe no one can completely sell. And so I think we got that Venn diagram right. I think we like each other. I love him actually, but I think I have a love relationship with my co-founder after all these years.

• 1:14:27Speaker 01

  He's a wonderful human, huge heart. Huge integrity, very bright. Yeah, we just get along real, real well. And over time, it hasn't been a struggle. It really hasn't been a struggle. It's just kind of worked.

• 1:14:41Logan Bartlett?

  That's amazing. Now, I guess before I let you hop, two final ones. So one, climate now. So Propeller Fund, that's your, I guess, did you actually raise outside capital for it? Maybe talk a little bit about what you're doing.

• 1:14:54Speaker 01

  I did. I wanted to get into climate and I didn't know which angle I wanted to commit it, come into it with. And so I started by kind of talking to founders and investors. And the more people know about climate change, the more depressing there. I mean, it was just depressing. I did like a learning tour, like I tend to do. And there wasn't a lot of optimism. And then one of my stops on the tour was the Woods Hole Oceanographic Institution, which is like the MIT of the ocean.

• 1:15:28Logan Bartlett?

  In Boston?

• 1:15:29Speaker 01

  It's on Cape Cod, actually.

• 1:15:32Speaker 01

  And oceanographers are optimistic about climate change. And it was breath of fresh air. And I spoke to lots of oceanographers outside of there. I mean, the ocean got us out of the last ice age. The ocean is, contains most of the carbon dioxide already. The ocean absorbs 90% of the excess heat getting kicked off the earth. The ocean produces half our oxygen. Like, the ocean's kind of the, it's the unsung hero in climate change. It should be the MVP in it. And everyone kind of treats the ocean as the victim, the, the, the, the plastic issues. When I, yes, it is a victim and we should clean up the plastic. But the ocean can do a large part of the heavy lifting of helping us get out of the climate change

• 1:16:16Speaker 01

  pickle. And no one was doing anything about it. No one was.

• 1:16:19Logan Bartlett?

  How can it get us out of the climate change pickle?

• 1:16:22Speaker 01

  It can absorb way, way, way more carbon dioxide than it currently is. And it already absorbs massive amounts of carbon dioxide. That's a really, really important way of, of fixing climate change. And so we have a number of investments around that.

• 1:16:40Speaker 01

  And so I started a fund, it's a $150 million fund with a bunch of ocean people because I'm not an ocean person, I'm a software person. And we make climate investments focused on the ocean. I ended up partnering with Woods Hole Oceanographic, so they work on all the investment opportunities with us. We'll spin IP out of there. I partner with MIT, we run a thing called Ocean MBA for ocean entrepreneurs or people who want to get into the ocean and start a company around there. And we're off the races, but about a year it's.

• 1:17:06Logan Bartlett?

  I'm sure you love all your children and all the investments you've made to say, any particular one that's super cool to highlight?

• 1:17:14Speaker 01

  This one isn't a carbon dioxide one, but it's cool. It's two women founders that came from the desalination industry. Desalination is, you know, turning ocean water into fresh water.

• 1:17:24Logan Bartlett?

  Of course.

• 1:17:25Speaker 01

  And they basically built a new type of filter. There's a lot of lithium floating freely in the ocean. So they want to turn every desalination plant into a lithium mine. And so that's one of my favorites. I think it's going to be a very, very.

• 1:17:40Logan Bartlett?

  What does an investment in that look like? Do they, I mean, this is like old school CapEx.

• 1:17:45Speaker 01

  That is going to be some, I mean, lithium is going to be a good business if all this stuff comes together. But yeah, with some of our stuff is hardware, some of it's.

• 1:17:53Logan Bartlett?

  How much, how much money will a company like that raise in its initial?

• 1:17:57Speaker 01

  Oh, initially we just put in, we put in a million dollars, I think, into that company. It's called Oleken. But, you know, we'll end up putting, you know, that'll be well over a hundred million dollars of money will go into that thing.

• 1:18:09Logan Bartlett?

  That's great.

• 1:18:09Speaker 01

  Yeah.

• 1:18:10Logan Bartlett?

  Well, I can't let you hop before AI is on the tip of everyone's tongue these days. What's your perspective? I mean, HubSpot has initiatives around this. What's your perspective on that and how it's going to impact? I mean, I don't know when we're going to release this, but last week, Microsoft announced all their co-pilot stuff for.

• 1:18:26Speaker 01

  I watched a video this morning, it's sweet.

• 1:18:28Logan Bartlett?

  It's very impressive.

• 1:18:29Speaker 01

  Super impressive.

• 1:18:30Logan Bartlett?

  People forget Microsoft was, you know, a very feared and innovative company 20 years ago. And it's pretty impressive to see what they're executing on.

• 1:18:38Speaker 01

  Hats off to Satya Nadella.

• 1:18:42Speaker 01

  And how? We always talk about HubSpot, we're big and fast, they're big and fast.

• 1:18:48Speaker 01

  I mean, I think it's, I don't think this is a small thing. I think this is a disruptive innovation, kind of like AWS was a disruptive innovation that led to a million SaaS companies. The iPhone was a disruptive innovation that led to so many mobile applications. I think this is similar. And so HubSpot's got a big bet on it. And I think one of the things, so one of our investors, a guy named Pac Grady at Sequoia, and he always likes to describe the world as the new innovation comes along and you have a battle between startups who have the new innovation and no distribution capacity, and incumbents who don't have the innovation but lots of distribution capacity. And it's a race, can the startup get the distribution first?

• 1:19:32Speaker 01

  Or can the big company get the innovation first? In the case of AI, and this was very much shown in the, in basically the Microsoft Office demo that came out. There's a lot of benefits to being an incumbent in this game. And I think HubSpot will really enjoy its incumbency. If you look at what Copilot is doing, is it's using, of course, ChatGPT, but it's also using all the emails you've ever sent, all the Word documents you've ever sent. And it's like, wow, that's one plus one equals a hundred thousand.

• 1:20:06Logan Bartlett?

  And it's embedded in your existing.

• 1:20:08Speaker 01

  It's awesome. And HubSpot's got that same advantage where you run your whole darn front office on HubSpot. Every piece of content, every email, every CRM record, every chat you've got, you name it is in there. And if you combine all that HubSpot intelligence that's in there with the ChatGPT stuff, you create something very, very special. So we've done a bunch of stuff. One of the things I think super innovative is ChatSpot, ChatSpot that AI. And that thing's blown up on us.

• 1:20:34Logan Bartlett?

  What is, what is?

• 1:20:36Speaker 01

  It's exactly that. It's very similar to what Microsoft's doing. It's a chat interface to HubSpot. And so, and you can access from there.

• 1:20:48Speaker 01

  All of the OpenAI stuff in all of your HubSpot stuff. So let's say you're a casual user of HubSpot. Instead of wanting to go and click in a few five, six clicks to find a graph of how many leads do we get last month? How does that compare to the same month a year ago? Which is like 15 clicks? Just ask that question and the graph will show up. Oh, I like that. Can you show me the same information for last month over year over year? Or show me all the prospects in our database that are at a certain level in San Francisco because I'm going to visit it next week. I'd like to see that list. Or write me a blog article about AI and how it's going to impact the marketing automation industry. Make it funny and add a picture to it. Like that's the interface.

• 1:21:33Speaker 01

  So you're able to pull all your HubSpot data in and it's, it learns over time and it gets smarter. It's super powerful.

• 1:21:39Logan Bartlett?

  Very cool.

• 1:21:40Speaker 01

  Yeah.

• 1:21:41Logan Bartlett?

  It's exciting. It's a

• 1:21:43Speaker 01

  I think it's a really exciting time and like you didn't ask me about this, but like all the SVB stuff and like

• 1:21:47Logan Bartlett?

  Well, it's

• 1:21:47Speaker 01

  Yeah, I'm interested. There's been so much up and down in tech and it's, it's been

• 1:21:52Logan Bartlett?

  What's your, what's your perspective on tech as an industry and how it's viewed going forward? I mean, that's the thread that I find most interesting. SVB, it was a crazy day, right? And it was a crazy experience and I have tons of sympathy for a lot of the people in our portfolio, the people that worked at SVB, right? There's a, I mean, there's a ton of faults to be had at the higher ups, but what's your perspective on tech going, going forward at large? Because AI is an element of it. There's an element of optimism there. If I look at some of the trends that we've seen over the course of the last 15 years, to some extent, some of them are getting long in the tooth, right? Like bottoms up SaaS is, you know, I mean, we're, I don't know if we're in the ninth inning, but we're in the

• 1:22:33Speaker 01

  You want to be the 10 millionth in one SaaS company?

• 1:22:38Logan Bartlett?

  The Kanban board, like that you're doing the one more on.

• 1:22:41Speaker 01

  One of our employees, this guy, Scott Brinker, puts together, he calls it the martech landscape, which is like basically a CRM landscape and he breaks it into like 30 categories.

• 1:22:51Logan Bartlett?

  He was one of the OG infographic folks.

• 1:22:54Speaker 01

  Yes. And he put the original one together. It had 17 marketing software companies in it. And now there's north of 10,000 and it's just, and there's more every day.

• 1:23:03Logan Bartlett?

  Which is amazing because it's so cheap to start a company versus when you were starting it way back when to reach distribution, but at the same

• 1:23:10Speaker 01

  He's easier to start, harder and harder to scale.

• 1:23:12Logan Bartlett?

  Harder and harder to reach distribution.

• 1:23:14Speaker 01

  But I think it's an interesting moment. You've got headwinds and tailwinds. The headwinds are, I think that SVB crisis rattled everybody a little bit.

• 1:23:22Logan Bartlett?

  In what way? I mean, obviously, there's implications of where you manage your cash and treasuries and all that, but...

• 1:23:26Speaker 01

  I don't think that's it. It's more, it's going to be harder to tack on debt on every A round, B round like you guys. I think it's going to impact you a little bit.

• 1:23:36Speaker 01

  It maybe just rattles LPs a little bit who are thinking about investing in funds. It's just, it's a rattling. I don't think it's long term.

• 1:23:42Logan Bartlett?

  The weirdest one for me is the social element of venture capital was this weird sort of niche cottage industry where a lot of people didn't know exactly what it was. In the last 10 years, it's become central to a bunch of different, the asset class has grown, right? I don't know what people investing in Twitter or the latest strike round at a very big price. Like I'm not, that's not the venture capital industry of 20 years ago. Not to say whatever, whatever you want to say about those rounds or whatever, that's not what the industry was. So there's one element of the asset class has just been institutionalized. And there's another element of the personalities themselves sort of being better known and much more in the, the cultural center of the conversation.

• 1:24:23Logan Bartlett?

  And particularly VCs, but Elon Musk falls in this bucket as well of being very central to hosting SNL and being on the news all the time and all that. And so tech in a weird way has a focus that, from, from the mainstream that I think people didn't fully appreciate. And I think SVB really brought a lot of that criticism to light for different people, I think.

• 1:24:45Speaker 01

  I think you're right. I don't think it was a great moment for tech.

• 1:24:47Logan Bartlett?

  Yeah, and a bunch of different vectors.

• 1:24:49Speaker 01

  Yeah. I do think there's headwinds and tailwinds. I think the headwinds are, I think that was a little headwind, not a huge one. There's the obvious headwind of, you know, we went through, let's call it what it is. It was a bubble in 21, valuations got crazy. I think we're back down to where we were in 2000. It's like 2019 again, maybe a tougher environment. And I think... So many people entered the industry and they're still stuck in that 221 mindset. People just need to get over it. It's a whole new world. And I don't think that's coming back. I think the tailwinds are, I do think there's a big disruption of innovation happening that's going to sail a ton of ships and be a boon to productivity for all of us, all of humanity.

• 1:25:31Speaker 01

  And I do think climate tech is like, you saw that there's been a giant tech wave. There's a giant biotech wave that people don't talk about in our world, but it's huge.

• 1:25:40Logan Bartlett?

  Zach Weinberg is a, I don't know if you know Zach.

• 1:25:43Speaker 01

  I don't.

• 1:25:43Logan Bartlett?

  But he's a, he's a occasional co-host of this and he now has a YC for biotech. And so.

• 1:25:49Speaker 01

  YC's doing climate tech now, too.

• 1:25:51Logan Bartlett?

  It's fascinating to go down the rabbit hole of some of that stuff that they're doing.

• 1:25:53Speaker 01

  I think it's going to be a giant industry. So there's definitely headwinds and tailwinds. I am not worried about tech. I'm not. There's so much innovation that's happening. Tech has done so much good for the world. I think, I'm a tech optimist.

• 1:26:05Logan Bartlett?

  There's some messaging problem that exists, though. I don't think people are aware of.

• 1:26:09Speaker 01

  I think there's a messenger problem.

• 1:26:10Logan Bartlett?

  Messenger, yeah. Well, I mean, we don't need to call people out by name, but even the most prominent VCs, I would say, are, have different elements of polarization in their message.

• 1:26:20Speaker 01

  The FTX thing too is another like rattle.

• 1:26:22Logan Bartlett?

  I think crypto in general, I would say, FTX specifically, but crypto in general.

• 1:26:26Speaker 01

  Just think of the last three years, if you're a tech CEO, you had COVID, the health crisis. You had COVID, what was that going to be, a depression or a recession? COVID boom, now we're in, call it COVID recession. You had crypto will blow up. You have banking crisis. It's like one darn thing after another.

• 1:26:43Logan Bartlett?

  Social issues that came up around.

• 1:26:45Speaker 01

  It's been really a wild ride. I just think since Yomini took over as CEO of HubSpot, I joked with her this morning, I'm like, all this is your fault. All this crazy stuff that happened.

• 1:26:56Logan Bartlett?

  You rode it all the way up, right?

• 1:26:59Speaker 01

  I said, you brought all this on.

• 1:27:01Logan Bartlett?

  You knew a good, a good time to play your walk-off music, I guess, as CEO.

• 1:27:06Speaker 01

  Kind of did get lucky on that one.

• 1:27:07Logan Bartlett?

  Yeah, you left her to deal with all, no, it'll be interesting. I do think there's a messenger and messaging, to your point, problem. And we also need to be more communicative about not just the dog-walking apps or whatever people want to criticize tech for, the D to C businesses with upside-down unit economics and all of that, right? There's also all this good that's happening from a, you talked about biotech and climate tech and healthcare and all these things. And so I think we.

• 1:27:32Speaker 01

  And it's just, even just the, what GPT is going to, what AI is going to do is going to make everyone way more productive over the next 10 years and that's going to hit everybody outside of tech.

• 1:27:42Logan Bartlett?

  Yeah. Well, good. Anything I didn't hit?

• 1:27:47Speaker 01

  A lot.

• 1:27:47Logan Bartlett?

  Yeah.

• 1:27:48Speaker 01

  We should do a whole thing on the Grateful Dead.

• 1:27:50Logan Bartlett?

  I would, I would welcome that. I, I appreciate, I appreciate you doing this. I wouldn't profess myself a deadhead, but I do know nugs.net and I used to get Phish and Grateful Dead songs from that when I was in the late 90s. So, thanks for doing this.

• 1:28:03Speaker 01

  Thanks for having me on.

• 1:28:09Logan Bartlett?

  So that'll do it for the 57th episode of the Logan Bartlett Show. Thank you, Brian Halligan, for coming on and being such an entertaining guest. Thank you to Rashawn and Sam for their efforts with the episode. And thank you, everyone, for listening in. We will be back next week with another guest on another episode of the Logan Bartlett Show. Have a good weekend, everyone.