Dharmesh Shah, What I learned in a decade at Hubspot, BoS USA 2016

LESSONS LEARNED
From 10 Years
Of
@dharmesh v:00.08

Hi, I’m
@dharmesh
This is #bos2016

All-in-one inbound marketing
and sales software.
I’m co-founder/CTO

2008 Insights From In And Around MIT
My History With Business of Software

2009 Ideas For Building Better Software Businesses
2010 Building Great Software Businesses

2011 Building Big-Ass Software Businesses
2012 Strategies For Building Great Companies
2013 Lessons From The Trenches On Scaling Culture

2014 <absent> Time for a break / HubSpot IPO

2015 <absent> INBOUND event

2015 <absent> INBOUND event
2016 I’m Back! Did you miss me?

$15,387
$28,553
$51,604
$77,634
$115,876
$181,943
$0
$25,000
$50,000
$75,000
$100,000
$125,000
$150,000
$175,000
$200,000
2010 2011 2012 2013 2014 2015
HubSpot Revenue (mn)

$HUBS (Q2 2016)
• Revenue: $64M+
• Growth: 50%+
• Customers: 20,000+
• Employees: 1,300+
• Founders: 2 J J

LESSONS LEARNED
From 10 Years
Of (Likely) Mistakes
At

This presentation includes certain “forward-looking statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements concerning our position to execute on our growth strategy in the mid-market, and our ability to
expand our leadership position and market opportunity for our inbound platform. These forward-looking statements include, but
are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not
historical facts and statements identified by words such as "expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates" or words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions,
expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have
made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by
those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies
will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking
statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, our
history of losses, our ability to retain existing customers and add new customers, the continued growth of the market for an
inbound platform; our ability to differentiate our platform from competing products and technologies; our ability to manage our
growth effectively to maintain our high level of service; our ability to maintain and expand relationships with our marketing agency
partners; our ability to successfully recruit and retain highly-qualified personnel; the price volatility of our common stock, and
other risks set forth under the caption "Risk Factors" in our Quarterly Report on Form 10-Q and our other SEC filings. We assume
no obligation to update any forward-looking statements contained in this document as a result of new information, future events
or otherwise.
Safe Harbor

Just because we’ve done well
in the past doesn’t necessarily
mean we’ll do well in the future.
Your mileage will vary.

OPPOSITE ALSO TRUE:
Just because we’ve made
some sub-optimal decisions in
the past doesn’t mean we’ll do
so in the future.

You’ve got questions?
I’ve got opinions.
(some of them are even well informed)

30
A dozen years ago, I
met this super-clueful
guy at MIT.

31
A dozen years ago, I
met this super-clueful
guy, Brian Halligan.
Just one problem:
He’s in business school.

P(success) =
.01
2n
n = # of MBAs on early team

36
Wait…I’m in
business
school too.

Title Degree P(success)
Founder/CEO MBA (MIT) 0.5%
Founder/CTO MBA (MIT) 0.25%

VP Marketing MBA (MIT) 0.125%
VP Sales MBA (MIT) 0.0625%

VP Marketing MBA (MIT) 0.125%
VP Sales MBA (MIT) 0.0625%
VP Customer MBA (MIT) 0.03125%
VP Engineering MBA (MIT) 0.015625%

KIDDING ASIDE:
I am actually a fan of MBAs.
MBA density was not the problem.

THE PROBLEM: Early seeds of homogeneity.

Rank Company Score
#1 Google 4.5
#13 Facebook 4.1
#18 Adobe 4.1
#22 Apple 4.0
#23 LinkedIn 4.0
Top Companies
To Work For 2015

Rank Company
#1 AirB&B
#2 Bain and Company
#3 Guidewire
#4 HubSpot
#5 Facebook
#6 LinkedIn
#7 Boston Consulting Group
#8 Google
Top Companies
To Work For
2016

PROBLEM:
We should have started sooner.
Took too long to put someone
awesome in leadership role.

MISSION:
Help organizations grow with a
more human-friendly approach
to marketing and sales.

““Internet marketing is too broad”
“Marketing automation doesn’t fit.
WE’LL CREATE OUR OWN
CATEGORY!

WE CALLED IT:
INBOUND MARKETING

TOOLS
ARE BOUGHT
VS
TRANSFORMATIONS
ARE SOLD

Couldn’t just
build a brand,
had to build a
movement.
Available in
9 languages
14,000+
Registered Attendees
3,000+
Partners
125,000+
Members
Trained and certified
17,000+ professionals
2.0+ million
Monthly Visits
BLOG
19

“Targeting small and
medium businesses is a
Very Bad Idea.
- SAID ALMOST EVERYONE.

PROBLEM:
It is hard to make the unit
economics (LTV:CAC)
work in SMB.

SMB
Small Business
Enterprise
Marketing

SMB
Very Small Business
Enterprise
SMB
Very Small Business
Enterprise
Marketing Sales/CRM

Focus on doing
one thing
exceptionally well.

We are a special little
snowflake.
We make our own rules.

First 4 Years:
Top Of The Funnel
All-In-One Platform

The problem was not trying to
build an all-in-one system.
The problem was not making a
proportional investment in
product.

LEVEL 1:
Sales/Marketing
LEVEL 2:
Product
LEVEL 3:
Culture

“Our SEO tool is great!
Easy story to tell.
Time to value is super-short.

EPISODIC NEEDS VS ETERNAL NEEDS

“We’re in the inbound marketing
business which means ToFu tools,
not marketing automation.
Who made up that definition.
Um, we did. [pause] Oh…

Use machines to help
you make decisions
that are better for
humans.

Perils Of Pricing and Packaging

“What should we
charge for this
crazy-ambitious,
all-in-one platform
for marketing?

QUESTION: If it takes
6 MBAs 3 months
to come up with pricing,
how long does it take
2 MBAs?

QUESTION: If it takes
6 MBAs 3 months
to come up with pricing,
how long does it take
2 MBAs?
ANSWER: About 3 min.

*Not starting at $250,
just $250.

“This is SaaS. Of course
we’re going to do monthly
payments and not require
annual contracts.
- ME.

“The data we gather is much
more valuable than the
dollars we’d collect.
- ME.

MORE FEATURES VS DIFFERENT FEATURES

Bring up pricing
one more time.
I DARE YOU!

HubSpot Marketing Pricing
Upgrade based
on contact
database size.
Upgrade based on features.
Cross sell new
products into
both marketing
and sales
customers
83

Retention, Retention, Retention

Churn is not
the quickest way
to kill a growing
SaaS company.
But, it’s the most reliable.

CUSTOMER
RETENTION
VS
REVENUE
RETENTION

Absence of cancellation
is not proof of the
presence of happiness.

Presence of upgrade sells
is not proof of the absence
of unhappiness.

Questions?
@dharmesh
(or AskGrowthBot.com)

Dharmesh Shah, What I learned in a decade at Hubspot, BoS USA 2016

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (8)

Similar to Dharmesh Shah, What I learned in a decade at Hubspot, BoS USA 2016

Similar to Dharmesh Shah, What I learned in a decade at Hubspot, BoS USA 2016 (20)

More from Business of Software Conference

More from Business of Software Conference (20)

Recently uploaded

Recently uploaded (20)

Dharmesh Shah, What I learned in a decade at Hubspot, BoS USA 2016