Hubspot Co-Founder Brian Halligan on Leadership Lessons Scaling Hubspot to a $28BN Market…

Thank you for having me. I’m big fan of the show.

You really did your homework, Harry. I I take my hat off to you. I think I was 11 years old. There was a low point on the route and a high point on the route. The low point was house numbers 4 And 5. House number 4 had a German shepherd that didn’t like me coming on the front porch every day. And house number five had a Doberman pincher that didn’t take kindly to me coming on the porch every day. And so they would really give me a scare.

And I had the paper route for years, and every they never warmed up to me. So I got a good scare on house 4 and 5. And then House 16 was the Harrisons. And the Harrisons were a very fun, very successful family. And I would come in. I’d deliver the paper to missus Harrison. It was the last house in the route. And she would invite me in, and she was a terrific cook. And I would help her cook dinner, and she was super engaging. And she had four kids.

Were all a lot older than I was. And let’s just say they were hyper overachievers, much more overachieving than the Halligans were. And I used to play like Nerf basketball with them in the living room and kind of get to know them. And so that was my first job. And I was one of those people that I always had a job. But the reason that really paid off for me, and I think this is what you’re referring to, is Richard Harrison, Pat Harrison’s oldest son, gave me my first real job out of college.

And it turned out to be a really good spot to start my career. So that paper route really paid off for me.

And Harry, it wasn’t just the paper route. It was my mom. So missus Harrison was very, very close friends with my mom, and my mom had lots of great friends. And so a little bit of it was my mom who actually deserves a lot of credit for it. And my mom’s not interested in technology or careers or something. Just wasn’t her MO, but she turned out to be a central player in my first job.

Lot of luck. So my first job was at a company called PTC. It was a CAD software company, and I was employee number 200 in a hundred years ago in 1990. And I stayed for ten years. And by the time I left, there were 5,000 employees. I had a great run there. And I just got very lucky landing in that spot. And I think it was Louis Pasteur who said luck favors the prepared. And if I were to do sort of a correlation of prepared versus luck, the r squared on that is quite high.

So I’ve always been over prepared for everything. And after that first job, I give preparation a fair amount of credit. Maybe it’s half preparation, half luck, half right place at the right time. But people who are well prepared tend to be at the right place in the right time, I’ve noticed.

Think you called my kindergarten teacher.

the don’t think Sheryl was way off on that, and that was very much the case for me. So I I remember this is really a 100 ago, but I had three offers. One was from PTC. And really, my first job, Harry, was I was what they used to call a secretary. I was the secretary to the head of sales in this company. And that was the offer. It was $20,000 And then I had two other offers for kind of sales positions in these two other companies with higher pay.

And I chose the lowest paying job with the company that had the most upside and with somebody in there that I thought just might champion my career in this guy, Richard Harrison. That really paid off. I don’t know what happened to those two other companies, but PTC is still around. It’s a 20,000,000,000 market cap company. It’s done quite well. And so I don’t think Cheryl is far off in that hop on the rocket ship quote.

Yeah. I think it’s super hard to generalize because there’s people come at it from different angles that are very successful. My personal journey was I joined two scale ups, not even startups. Like, I joined a 200 person company that was growing quite fast. That was PTC, and I ended up being their first basically inside sales rep and sales and channels and marketing. I ended up doing lots of different things. They moved in Asia to start Asia. And, you know, if you’re on a very fast growing scale up, you get a lot of exposure.

You get a lot of opportunity. So that really paid off for me. My second job was at a completely different company, but also a scale up called Groove Networks that eventually got acquired by Microsoft for it was kind of a middling outcome. But same thing, I learned a lot. But instead of it at PTC, I learned a lot about selling. How do you build a sales organization? How do you hire reps? How do you open international offices? How do you build a lead gen machine? How do you build that revenue engine?

At Groove, it’s totally different. The founder was very different. The orientation was it was a product company. I learned how to think about the future, think about products, think about technology, craft awesome solutions for customers. And I learned a lot in that journey. So for me, joining a scale up twice really informed HubSpot. And, like, PTC and Groove are very both of those companies and their DNA are very much ins I can look at things that happen inside of HubSpot, point back to those two companies.

I don’t know. I’m trying to run to, though, happiness. I’m a huge music fan, big Grateful Dead fan. There’s a song that James Taylor I know people roll their eyes with James Taylor. He’s a little bit of an eye roll, but he’s from Boston, and, you know, I appreciate that. He’s got a song that says the secret of life is about enjoying the passage of time. I don’t think he’s totally wrong about that, And I’m trying to enjoy the passage of time as I look forward over my next twenty, thirty years.

And so I think that’s kind of what I’m running towards.

I don’t think it’s as much about things that make me happy as about being devoid of sadness or unhappiness and avoiding things that irritate me or I don’t enjoy the passage of time of. And so I’m trying to shed in my life, people I hate to say that, in things I don’t like to do as much as I possibly can. I don’t think, I’m quite sure, money doesn’t buy you happiness. I have a bunch of it now. I never had it. And I’m no no happier or less happy than I was.

I would give myself, like and my NPS score on my happiness is, like, between an eight and a nine. Pretty happy. It haven’t been an eight and a between an eight and nine forever. Money buys you convenience. It’s really the only thing it buys. That’s valuable. It enables you to do less things you don’t like to do. I’ll give you a very good example. The one thing I’ve done with some of the wealth I’ve created is I’ve high back to my mother. When my mother was dying, she had a home health aide named Marilyn from The Philippines.

I loved Marilyn. And she took care of my mother for years. She was almost part of the family. And then my mother sadly passed away, sort of loosely kept in touch with Marilyn. And then a couple years later, Harry, I had a brutal snowmobile accident. I was in the hospital for a long time. Was in a wheelchair for a long time, six months in a wheelchair. And I needed help. So I reached out to Marilyn. And I said, Marilyn, could you take care of me the way you took care of my mom?

And she said, sure. And so for a couple months, she she didn’t move in, but she was in my house all the time. And she was wrapping that up, and then she was resigning. She basically said, I’m done. You know? You’re fine now. You’re out of the wheelchair. I’m gonna move on. And I said, wait a sec. Wait a sec. Wait a sec. Can you cook? She said, no. I said, can you clean? She said, oh, yeah. I can clean. I said, what if we change your job and you just took care of me?

You took care of my dog, you cooked, you cleaned, you organized. And so I hired Marilyn, I don’t know, a year and a half ago, and she’s terrific. She’s a warm presence in my life and my dog’s life, and she just does so much stuff. It just avoids I don’t have to do laundry. Don’t to clean. I don’t to cook. I don’t have to think about so much stuff because she does it. That’s the only thing of, like, value that’s been created from the wealth I’ve created with HubSpot.

I never worry that much about it. I I always thought I’d have some measure of success that I would be fine. I just always sort of had a confidence in that somewhere deep down inside. And so, yes, I’m financially secure, fine. But I think I worried a little bit less about that than everybody else. There was something down deep inside of me that wasn’t that worried about that. I knew I had the ability to create something. Even when I was very young, just back to my youth, I had that paper out.

But I was that kid who always had a job. I worked at a gas station. I worked at a fish market. I was a barback. I was a waiter. I did like every job you can imagine. I started a painting company. Every summer, I painted about 5% of Cape Cod and just worked my way through. Every summer, painted another 5%. And so I always knew that I would be I would be fine financially. I just had that feeling deep down inside.

I think that’s really an interesting observation, actually.

I’m glad I came, Barry. I’m glad I came learning a lot.

Okay. I mentioned a minute ago I had this it was it a very bad snowmobile accident. I love

God I was going to die. Like, went off a cliff, was in the cold, dark of night in Vermont, freezing cold night. No one knew where I was. I got very lucky and was saved. But while I was sitting there, I was I was thinking a lot about my life in that moment. And I’m fairly reflective about my life. And we’re just coming off the New Year, so I’ve been thinking a lot about it. But in that moment, I thought, if I make it alive, if I make it out of here, what should I change?

And one of the things I thought about it on the bottom of that cliff was I don’t want to be the CEO of HubSpot anymore. You know, I started this thing. It’s got 7,000 people. It’s a big company. It’s going great. But I don’t think I’m necessarily well suited for the next phase from 7,000 to 70,000 or whatever it is, from $20,000,000,000 market cap to $200,000,000,000 market cap. I didn’t necessarily enjoy the work at that size as much as I enjoyed it, you know, at an order of magnitude smaller.

And so I really made the decision in my head on the bottom of that clip that night that if I make it out alive, once I recover, I’m gonna hand the reins off. And that’s exactly what happened. I was out of work for seven months, and seven months in the day, we gave the job to Y Combinator, who’s terrific, who’s CEO of HubSpot now and I’m chairman. And that turned out to be a very good decision for me. I’m I’m generally quite a bit I didn’t love the work of a big company CEO, and I don’t think I was that good at it.

Why? I like it earlier, smaller team where I know people. I’m really viscerally in touch with the product and the customers. I’m not worried too much about governance, about enterprise risk management, about things like that. I don’t spend much time at all speaking with lawyers and law firms. I like the scale up phase of 20 to 2,000, I think, was where I was at my best. I don’t think I was at my best from two of us to 20 or 2,000 to where we are today, but I think I was kind of at my best between twenty and two thousand.

I think it’s right. I didn’t think so when we started the company. The the crew we hired in the early days of HubSpot were terrific, very bright. And I thought, you know, if we ever make it to the size we are now, which, you know, I would have put very low odds on that, it would be the same crew. And we’re, I think, on our third or fourth generation of leaders at HubSpot. And there was nothing wrong with that original crew. In fact, they’ve gone on to do amazing things.

But I just don’t think they were interested in that next phase. And so I think it needs to evolve and your team needs to evolve over time. And when I look at our team, and we’ll probably get into this, but we’ve always had an interesting mix on our executive teams of people who we’ve hired kind of been there down there from the outside and the people who kinda came up through the system. And I like it, and I know you’re from The UK, so you don’t know about it.

We have a thing in The United States. I don’t know if you’ve of it. It’s called baseball.

Like, the Boston Red Sox didn’t win a world championship for eighty four years. Very frustrating. And they’ve won four in the last twenty. And when I look at the teams that won, they were a nice combination of people they drafted out of high school and kinda came up through their system and really got it mixed with some free agents who were a little more expensive from other teams who had seen success before, and that mix really works. And I think that has worked for HubSpot. We’ve got a mix of people who kinda grew up through our system, and we hire people from the upside.

That’s proven to work pretty well, I think. I think that’s a good formula.

Okay. It’s a really good point about that. I remember looking at my review maybe five, six, seven years in and seeing comments in my review about how Brian doesn’t understand that he actually is HubSpot. It’s embodied in him and that every action he takes and every decision he takes is really HubSpot and how those things came together. I was quite surprised at how much those things had merged together in the employees’ mind at least. That was actually some useful feedback and useful revelation. It made me think more carefully about my actions and my decisions I was making because I hadn’t realized those things had kind of merged together.

And I I think that probably happens with CEOs or founders of all companies as they scale. And it took me by surprise how much those things came together. I’m still involved, so it totally hasn’t happened. Like, I’m still the chairperson. I still go to the office. I think I’m not totally disassociated with it, and I think that’s okay. If I had just left Harry, I think that would have been tough for me. I think you’re right. I think my identity is pretty wrapped up in HubSpot, and there’d be some sadness around that, I think.

Yeah. I so it’s a non sequitur, but in The Wall Street Journal yesterday, the day before, there’s an article about Elon Musk. And Elon had an amazing quote about vacation. So he works, you know, a crazy amount of hours. And he say, oh, yeah. Yeah. Yeah. Vacation. That’s email with a nice view. I thought that was pretty funny, actually.

Okay. I mentioned reviews earlier. One of the best things my cofounder, Dharmesh, has done, he owned doing my annual 360 degree review. And he did it in a remarkable way. And we started doing this, like, five, six years in. The way Dharmesh does a review, so Dharmesh is very introverted and does not want to talk to anyone. He really doesn’t. So he does a net promoter survey on me. And so he sends a net promoter survey. On a scale of one to 10, how likely are you to refer Brian as the CEO of HubSpot and then why?

And he sends it to 30 people, the board members, executive team members, frontline members, customer partners. And people score me, and then they write a novel, Harry, like a novel about about about me. And then Dharmesh takes a while and synthesizes it together in a really cool way. And I remember the first one I got was 20 pages. So I I reviewed this 20 pages long, and I started reading it. The beginning of it is, here’s your score, and then here’s your features. So Brian’s really good at explaining the vision of HubSpot, for example.

And then he would pull out direct quotes from three or four of the people who had said that theme, and I could read the quotes. Brian was his and I’m reading through it. And the first 10 pages, Harry, I was pretty convinced I was the best CEO ever ever because it was all my features. I got to page 10 halfway through, and the next 10 pages were my bugs. And there was a full 10 pages of bugs with direct quotes pulled out each one. And I had a big glass I remember the first time I sat down at at a big glass of scotch.

I was done with it. Pretty well convinced I was the worst CEO ever invented. But that was a very, very, very useful exercise we went through every year, and now Y Combinator goes through it, to get awesome feedback that’s well organized. Infinite numbers of things I was bad at and not good at, and they were all surfaced in that process.

I would say the biggest one that just I couldn’t put to bed and would come up year after year after year was my thinking is the control freakish of founders is a amazing strength in startup mode, and that amazing strength of founders turns into an amazing weakness as you scale. You’re more prepared than everyone. You’re overthinking, and you’re basically doing everyone else’s job. And that just came up over and over and again. And I do think I improved on that over time. Like, the same weaknesses would come up year after year.

And some of the weaknesses were or some of the bugs are like, you know, at HubSpot, if there’s a bug, sometimes it’s like, actually, that’s the way we designed it, worked as designed. Some of the bugs were actually, I thought, features, and they’d show up on both sides. So I would pick a couple things I would work on improving. And then a lot of them, I would just be like, you know what? I’m never going to get better at that. I’m going to try to hire people who map perfectly into those weaknesses.

So I’m the type of person who’s, okay, great. I’ve got all these weaknesses. I try to hire around them, and I try to advise my folks to hire around them. Can I lean into my strengths? So if I have a strength that’s like a 10 x strength, how do I make that a 100 x strength? Or if I’ve got a weakness that it’s a minus 10 x strength, just leave it at minus 10 x because I’m never gonna get it to the to plus 10 x.

That’s kinda how I think about it. Did it upset you? Yeah. Kinda. Yeah. Reading that was was a little upsetting. Yeah. So I’ve been reading about Jensen Huang and Elon because they’ve got such unusual CEO styles that completely fly in the face of everything that any CEO coach or anything you read about being a CEO will teach you. Jensen Huang’s really got a very different playbook. He’s the CEO of NVIDIA. One of the things he does is he criticizes in public. Okay? So he’s got his team.

He’s got 40 direct reports, which is pretty weird, or 50 direct reports. And if somebody says somebody disagrees with or does something that he didn’t like, he will in front of everyone I think he does it in a very nice way, but admonish them or criticize them or give them feedback so everyone can hear it. And I remember back in the day getting feedback that I used to do that. People really did not like it. And I probably didn’t deliver it as diplomatically as Jensen does.

And that has popped into my mind, and I sort of fixed that. I always try to give kind of negative feedback in private and public praise in public. I think Jensen might be onto something on that. I think I could have delivered it more diplomatically, but that was one I was thinking about as I was thinking about this interview that I wonder about.

I was the same. One of the things I worked on was getting more diplomatic over time. And the other thing that I didn’t realize is how much, Harry, people really listen to everything you say. Yes. So you have merged as the founder with the company. Everything you say, people pretend like they don’t listen, and they push back at you, but they remember what you say. You run into somebody in the you know, you’d be walking down Newbury Street in Boston and bump into an employee. You’ll have coffee with them.

They’ll say something. Remember when you said this four years ago at a company meeting? No. I don’t remember that at all. So people really, really listen and over index on what you say. And so I do think getting better and more diplomatic over time did help me and help the company.

I will tell you the one thing I learned from Elon. So Sequoia has an annual I call it a glamping event. Dharmesh and I I would describe us as as indoorsy, not outdoorsy. And so they invited us to the glamping event. We debated it. Like, should we go? It’s a glamping event, but great speakers. It’s gonna be really good. So we went. And I’ll tell you a funny story about it. But it’s the first glamping event we went. And the first night, Harry was freezing cold.

Freezing cold. And it was freezing, and we’re intense. And I’m like, god. Why did I come here? And my tentmate was John Collison from Stripe. And I just remember I was so darn cold that night. I was tempted to be like, hey, John. Should we just cozy up here so we don’t freeze to death tonight? I fortunately resisted that temptation, but I’ve never been as cold. Anyway, the next day, Elon spoke. And I remember his presentation. He probably would forget it. And he spoke about vectors.

So he’s a physicist, and he thinks about vectors and their power and their strength. And he talked about how organizations have all their people, their different vectors. And in most organizations, you have some strong vectors, really strong employees, and some less strong employees. In most organizations, your vectors are pointed all over the place. And he’s like, the one thing he focuses on, if he’s detailed about, is just trying to get all those darn vectors pointing in the same direction. Small vector, big vector, but all pointing in the same direction.

And I kind of think about it as inside of HubSpot, there’s 8,000 people. And if everyone’s pointing in different directions, you add let’s say 8,000 is each a value of one, and they’re all pointing each other, you get a value of zero. But if you get them all pointed in the same direction, you know, the value is 8,000. How do you get as close to 8,000 as you possibly can? I remember that clearly from him. So I think he’s in detail on certain things, but certainly not everything.

He’s CEO of x number of companies. I can’t remember five, six companies. He can’t be completely in the details and everything, but it’s in the details on systems thinking types of things like that.

I think it’s really underrated. I’ve spent a lot of time with startup founders who are CEOs. I wanna go from startup to scale up. And I think a big leap for HubSpot was when we got on this vector bandwagon and we got into a planning cycle where we can be like, here’s what our mission is. Let’s not change that or change it rarely. Here’s what our strategy is for these this year. Here are the main initiatives we’re gonna work on for this year. Here’s how we’re going to track them.

Here is the infinite number of initiatives that are proposed and people are kicking around and talking about and want to do in their pet rocks that we’re not doing this year, and we’re just gonna ignore them for another year. Once we got some discipline around that, then the vectors got aligned. The company worked a lot better.

I still don’t, Harry. You know, one thing I’ve learned about CEOs, they’re all very, very different. And there isn’t one model or one formula or one background. I’ve tried to look at different CEOs and come up with a rubric of like, this is what you look for. Here’s the five questions you should ask a founder to tell if they can scale as a CEO. I haven’t come up with that yet. I had three CEOs prior to starting HubSpot that I worked for. One of them was an inspirational sales leader.

One of them was a very detailed finance venture type person. Another was a product visionary. They could not have been more different in background, in demeanor, in leadership styles. I tried to take the best from all of them, but I was just struck as I look back at how different they all are. So I don’t think there’s, like, a playbook or criteria that this is what a CEO should be like. I’ll tell you another story, Harry. When we had about 20 employees, I joined a CEO group.

By the way, if you’re a CEO out there, CEO groups are incredibly helpful. And I joined one in Boston. It was called the high growth CEO group. And there were nine members of it, and they were looking for a tenth. And I interviewed to join, and I largely wanted to join because one of the members was a guy named Colin Engel. You wouldn’t have heard of Colin, but he started iRobot, the Roomba vacuum cleaner. And I would describe my relationship with Colin in in two words, man crush.

I really thought he was amazing. He was an MIT guy, started a company. It was public. It was a high flyer at the time, and I just wanted to learn from him. And there was another guy on there that had started a company called e Inc. Called Russ Wilcox. And that was another high flyer that you wouldn’t have heard of, but they made the screens for the Kindles when the Kindle was first out, so it was up fire. And then there were a bunch of other CEOs of other kind of random companies, but I really like those two guys.

And seven of the CEOs were hired gun CEOs from the outside, kind of been there, done that. And two of them, Russ and Colin, were founders. I remember at the time, 20 employees in, I wanted to seem like a CEO. I wanted to act like a CEO, and I wanted to be, you know, central casting. And what I noticed in those meetings was two of the companies were incredibly successful. Seven were kind of going sideways. The two were successful were founder CEOs. And those founder CEOs were really freaking quirky, like super quirky guys, and they’re great.

And the other guys acted like CEOs. And I was like, I’m quirky inside. Maybe I can just be quirky like these two. And so I tried to start being myself after that, and it paid off. Trying to be somebody else has a lot of overhead to it. Those two had a big influence on my crew.

Anyway, I’m just gonna I’ll save you the wary of you’re already like, are you quirky? You’re quirky. Me? Yes.

Okay. One of my biggest lessons is that’s about right. I used to beat myself up when we’d turn someone over, but I think most scale ups aren’t that good at hiring. And I think there’s a fair amount of luck involved. They don’t have a great hit rate. I think 50% within the first year and a half is close to what most companies are in scale up mode. It sounds a little high for where you are. You’re a small organization. But at HubSpot, if we turn someone over a year and a half in, we definitely beat ourselves out in, like, all that.

But when I talk to our peer companies, it’s kind of it’s high. Like, there’s a lot of turnover.

Okay. I would kind of frame it a different way from the logo per se. My analogy for being a founder, CEO, trying to go from startup to scale up, it’s like you’re climbing a mountain, and it’s very icy. And there’s like an ice cliff in front of you to get to the top. I think what and you’re trying to you get your pick, and you’re going up the mountain, and it’s treacherous. And most people fail. And that’s the reason they fail. It’s really hard. And where I think people fall down in hiring, and when they’re hiring board members or hiring tech team members, it’s not just the logo.

What you want is somebody who’s three years up the ice cliff from you who’s struggled through that same path. What you don’t want is someone who’s ten years beyond it, or even worse, somebody who’s never really climbed that ice cliff. They started their career on top and stayed on top. And so it’s not just the logo. Like, I think it’s okay if you hire someone from a much, much bigger company if they have climbed up that ice cliff and they have seen the lessons. And I’ll give you a great example for HubSpot.

We hired a board member a long time ago whose name is Jay Simons. And Jay was the COO at Atlassian. You are the Atlassian founder on your podcast.

He was three years ahead of us on the ice cliff. And, you know, HubSpot’s whatever, 2 point something billion revenue. They’re 4 something, and they were a few years ahead of us on the ice cliff. He had just seen everything already. So he’s on the board. We’re having an issue. He had just solved that issue or just dealt with that issue. And so that recent relevance was incredibly valuable. And so that’s what I would encourage. And so, like, HubSpot’s hiring today. We’re looking for a board member.

I’m pretty skeptical of hiring someone who’s been in Google a long time or Microsoft a long time. But if I’m looking for somebody who’s at ServiceNow or Intuit, you know, that’s pretty interesting to me. So I’m looking for somebody a few years ahead of us.

I don’t think I ever hired anyone where I didn’t have some concerns. There’s always red flags.

They usually did.

I think you have to be yourself. You have to you you have to shave off a little of your hard edges, probably. I had to definitely shave some of mine. I was very much myself. And I think it attracted a certain type of people, and it definitely repelled a certain type of person. Like, you spent your career at McKinsey. You come in and interview with me. You’re probably not that interested in working for me. You’re probably not. And that’s fine. Now I think you’ve fallen in a trap where everyone’s similar, but I would be surprised if anyone you hired didn’t have some red flags.

Everyone that we hired is like, well, they’ve got some strengths and some weaknesses. Scale ups fall down on hiring, and founders fall down on hiring is you’ve got a panel of people who are interviewing a VP from for of whatever of products. And you’ve got eight people interview them. First candidate, Mary, gets four out of 10 four out of fours and gets four two out of fours, and so it’s mixed. And then you’ve got Jane, who’s got eight three out of fours. You always hire the Jane.

That’s all. That just always happens. You always hire the Jane. I think you’re better off with the Mary. And you want kind of spiky team with some people who have great strengths and great weaknesses, and you want to spike in different directions. I think you wanna avoid that lowest common denominator type of pirate.

Yeah. I get pretty irritated, though. I do think it’s a signal of people take three days to respond to your email. I think that’s always been a big red red flag for me.

Okay. This is the ironic part because I’m not that good at this. So we were just talking about, like, reflection. And I don’t do New Year’s resolutions, but every quarter, I do a quarterly plan. So I kinda grew up in sales. So I the sun rises and sets in the quarter for me. So I just wrote my quarterly plan, and I typically get about half of my quarterly. I’ve got, like, six or seven items on there. And so I sit down and do those quarterly plans.

Now the tricky part with working with me is if something’s not on my priority list or my quarterly plan, it could be weeks or months before you get an email response from me. But if you happen to be engaging me on something that’s on my quarterly plan, I’m back to you in half a second. If I were hiring me, I would have some red flags on that. Here’s the other thing I would say about prioritizing, Harry, is I think too many people run their life through Slack and through their email, and that’s everyone else’s priority list imposed on you.

And so you’re really just spending your whole time working on everyone’s dues. You have to do some of that, of And people just don’t spend enough time like, well, what am I trying to get done this month or this quarter, whatever it is, and, like, have their list and, I need to make progress on my list today, not just be responding to everybody else’s emails. I think the way email and Slack and text works is you’re just very reactive.

Okay. You wanna know? Yeah. My list today or this quarter? You choose. Okay. So this quarter, I have some things I don’t wanna tell you about on there. I do wanna get married. I’ve never been married. I don’t wanna get married this quarter, but I wanna get married.

Yeah. This is part we’re not gonna get into this.

I’ve never been married. I’m tired of being single, and I want a life partner. I think it will make me happier. A lot of mine are are health related, so I’m a little obsessed with like everybody who comes to your podcast, obsessed with my longevity and Andrew Huberman, all that that shit. So fair amount of it is health related.

one. I absolutely crushed my back last quarter moving a couch. It was like I had a knife stuck in my back, and I don’t wanna do that again. And so I go to PT. I’m doing yoga. Like, I’m obsessed now with my back, and it’s much better. But I want my back to be it’s like, okay. I think of it as like you’re redoing a house. You’ve got the crappiest room in your house. You wanna go in the crappiest room and make your crappiest room your best room.

And same thing with your body. Okay. My back is the worst part of my body. How do make it go from the worst part of my body to the best part of my body? So, like, that, for example, is on my list this quarter.

Okay. I don’t know if I wanna tell you any of this shit, Harry.

No. I’m not gonna tell you anything.

every morning, I look at my quarterly thing. I’m like, am I actually working on the important stuff? Or am I am I working on the big stuff, or am I working on the little stuff? Am I working on every else’s stuff, or am I working on my own stuff?

can’t I typically am have, like, a 50% hit rate. Some of them are hard.

I sometimes do it. Sometimes kill I kill them. Sometimes they become habits. So some of the things I put on my to do list are habits I wanna form. So last year, a lot of them were about workout every day. Now I work out every day. It’s habit. I do it every morning. I don’t have to put it on my goal list or eat in a certain way, that kind of thing. That’s take certain supplements. Some of that is all kind of baked in now. I don’t think people really care about that kind of stuff.

Like, why would someone care about my quarterly plan?

It’s super helpful, actually. Yeah. Maybe you’re right. It’s super helpful. I started doing it a couple years ago. It’s been it’s been huge.

Nobody knows who they are. Does anyone really know who they are?

The most frequent reason I let someone go and the most common failure condition is I kind of think of this equation of are people solving for themselves, for their team, or for the enterprise? In the failure condition for people scaling up in their careers, your VP, your first time VP, whatever it is, they don’t solve for themselves. Almost never do they solve for themselves. They’re solving for their team. And they’re optimizing for their team. And while they’re optimizing for their team, well, by the way, they’re suboptimizing for their neighbor’s team.

That’s the number one failure condition where as we’re scaling up a VP or a director, whoever just isn’t doing well and their team’s giving them feedback they’re not doing well, their peers are giving feedback. That’s the failure condition, solving for their team over the enterprise.

They definitely get feedback on it. Another thing I would say, this is a little depressing, but we do net promoter surveys for the whole company. We’ve been doing this for fifteen years. Where once a quarter, we ask every employee scale of one to 10, how likely are you to refer HubSpot as a place to work, and then why. People write novels on that too. And we track it, and then we track it by department. And the scores move around. By departments, they can move around a lot.

And so let’s just say you’ve got a VP of marketing, and their net promoter score for marketing is like 55, 65, 58, 59, then boom, 30, and some feedback on that VP. And so we package all that up. We give feedback to the VP. Oh, you’re solving for the team over the on prem, blah, blah, blah, blah. And they work on it. What I found, and it’s a little depressing, is you put somebody on a recovery plan, more often than not, they don’t recover. And we end up parting ways to that person.

Once they’ve lost their team, they almost never can get that team back.

I don’t actually know what you mean by that.

Yeah, I’ve been wrong. But generally, that process of having the whole organization weigh in on it, like me individually, I’ve been wrong. The organization’s usually right.

Do it live, not on Zoom. Don’t have anyone else in the room. Be empathetic and be fast. If it’s a surprise, it’s your fault.

a 100 people.

I think it always breaks at a 100 people. At a 100 people, you go from knowing everyone in the organization, knowing a bit about their background, you interviewed everyone to, gosh, you just don’t know some of the people. It goes from very flat, like, there’s no layers or there’s one layer to, like, there’s two layers in there or two layers of management in there. It starts slightly to go from everyone’s missionary to there’s some mercenaries. There’s something about a 100 ish people, a 150 people. For most CEOs I talk to, something kind of changes in there.

And we started getting very serious about culture around that time. It was shaky It in there. And then we started getting quite serious about writing down what our culture is, trying to embed that in our interviewing processes, tracking it with Net Promoter Scores, being very transparent about what those scores are, what feedback is working on, all that stuff. We got very serious about culture and over index on it for many, many years. We I think we got quite good at it.

okay. I think most of your employees are mercenaries post 20 employees, largely mercenaries. And I think it’s fine. I think missionary companies have unfair advantages in that they’re able to attract better talent, retain better talent. I think people today have lots and lots of opportunities. Like, the unemployment rates are quite low. Generally speaking, very talented people have lots of opportunities. Humans are quite mission driven these days.

So first of all, our mission is is enabling millions to grow better. So not grow in a crappy way like creating spam and and cold calling and advertising at people, but, like, how do you market and sell in a really match the way you market and sell with the way humans actually want that to happen? And so I like our mission. Really like our mission. And I’m personally motivated by it. And I think some percentage of the employees are. But, like, are all of them? Definitely not.

And it’s okay. You know? That’s okay. I do think a decent percentage of them are. I don’t think, though, like, okay. Let’s say 7,000 employees at x percent are very motivated by the mission. Let’s say we’re at 70,000 employees. Is that seven x? I doubt it.

I I think b’s sneak in. You gotta keep the c’s out, and I think companies need to have good review processes and good feedback, and they have to move people out if they miss the hire. And I think good companies do that.

Sure. Sequoia was a big help to help by that. So we’re a Boston based company, and Boston based company is like, no one gave us a a hoot. I mean, we would go out to the West Coast and raise money. I remember the fundraising trips where Dharmesh and I, we get on the plane. We’re all fired up. Like, we got this. We got 20 meetings on Sand Hill Road, up and down Sand Hill Road. And then I remember getting on the plane on the way back.

We’re both just get crushed up and down Sand Hill Road. In this one particular trip, we had, like, whatever, 17 meetings with VCs and got 17 nos a row. Our last meeting was a guy named Jim Getz. Jim Getz is kind of a legendary VC at Sequoia. So I remember Dharmesh wasn’t with me this time, sitting in a conference room, and I was nervous. You know, Sequoia is like the center of capitalism, sweaty bum sitting there waiting. Jim’s kind of a legend. And Jim walks in, and as I’m shaking his hand, like my hand is moving up and down like this, he says to me, hey, Brian.

What’s it going to take for Sequoia to own a piece of HubSpot? And I said, really, not much. Just give me a turn. I’m ready to go. I had no other options. And so Jim kind of shook my hand. We spent a bunch of time with Jim, and then he handed me off to an up and coming partner named Pat Grady, who I think you know. And I thought we would have a term sheet and we’d be done in a week. And Pat spent the next three months going through unit economics and through just every line of every spreadsheet.

And I’ll tell you one funny story about Pat. So we’re in Boston, and he wanted to talk about how we calculated CAC or something. By the way, during the time he dug through all that, he figured out we were calculating unit economics wrong, and he got our head straight at our pricing model. He fixed a bunch of stuff during that. But I thought Pat was gonna say no as he went through all this. But my Pat Brady story is, and I think this is part of why Sequoia is successful, is he texted me and he said, hey.

You got time tomorrow at ten? And I said, no. I’m tied up at ten. How about eleven? He’s like, no. I can’t do eleven. He said, how about nine your time? So I can’t do that. He said, how about seven your time? And I said, well, I’m usually just waking up, but sure. And then I thought about it. 04:00 in the morning his time. I was like, Pat, do you have a life? Anyway, we had that meeting. Pat was incredibly helpful, and Sequoia was incredibly helpful, sort of rethinking our pricing model and our unit economics and really got us on a good path.

They were really good. But that was the process with Sequoia. Handshake with Getz really was engaged. Pat dragged us through the mud, eventually got to yes, and then we did the deal.

For us, it was huge. It was needle moving. It was one of the biggest needle movers. It was the brand was huge for us. They helped us with our business model a lot, pricing model too. Their network, they do something or they did something cool back then. They called the Sunrise Tour. So once they make the investment, they invite the leadership team to come, just meet everyone in the Sequoia community, all the right people at LinkedIn, at Google, at you name it. And so, like, bam, your network gets three times bigger when they become an investor.

They were kind of huge for us.

I think they all are, by the way.

Okay. I know them quite well. I think there’s a network effect in the venture business, of course. So they have an unfair advantage in that they did LinkedIn. They did Apple. They did all these companies. So they have that network, and they have all that knowledge, and they have that brand. In some industries, brand’s more valuable than others. It’s very valuable in venture. So that, of course, is given. Where I think they’re special is they don’t take any of that for granted. So there’s a whole new crew over there that runs it, Pat and Barlow.

And they’re paranoid. They don’t want to lose that mantle. They know they have something fantastic that Moritz and the rest of them gave them. They work much harder than any other VCs I’ve come across, and they’re absolutely paranoid that they’re going to lose it. There’s something in their genetic code where, I think this works for them, but it can be depressing if this is in your company, they don’t celebrate their successes. They beat themselves up for their failures, really beat themselves up for the failures. And I think they kind of dwell on their failures, and they don’t want to repeat those failures.

I think there’s something in the culture there that will sustain that competitive advantage. At least through this generation, it’s very the the current crew is really good.

Yeah. It was our Series D. It was I forget how much they invested, 40,000,000, $250,000,000 valuation. Like I said, if they didn’t do it, all 17 other VCs had said no. And so we were very grateful they did it. Okay. It was a complicated route because salesforce.com invested and Google invested. This is before they had like big venture arms. So there just wasn’t a lot of room in there. And they came up with the, I thought, a clever solution, which was we’ll buy some of the ExactTeam and founder shares, which is very common today, of course, buying secondary.

It wasn’t back then. And so they bought it. And if you think about that, I sold some shares at a $250,000,000 valuation. Now the company’s worth 100 times that. But I would also say I don’t regret it. At the time, I don’t know how much it was. Call it a million dollars. Relative to my current net worth, it was very much a life changing and so people think about the time value of money, the time value of money, and they think about, Okay, you can get a 10% return on it.

That’s not how I think about it. Like, a million dollars then was so much more valuable to me than today, let’s say. And so it was very valuable to me. It was very valuable to Sequoia and they were smart of them because they were nervous we were going to sell to salesforce.com. Salesforce.com made an investment. They were not thrilled about that idea at the time because they were worried Salesforce would come in and buy us at whatever, at two x. And, you know, Sequoia wants to make it 10 x.

And so they come up with that clever solution. I think it worked for them because it gave us a backbone. It moved our horizon from, like, two years out to, like, twenty years out, and it really let us plan for the long term and have a strong backbone if someone did come in and want to acquire it. It worked for both of us.

I would do it for exactly those reasons. It’s gonna give you a little personal cushion, which is useful. It aligns your incentives with your venture capital investors. We never built HubSpot to sell it. Like, we could have easily built HubSpot on top of the Salesforce platform back then, and we would have probably grown faster. We decided to build it separately and kind of integrate in, which made it less convenient. But we always thought we’ll build a standalone company that will last for many decades.

There weren’t. There really weren’t. We had very, very, very little interest. We’ve never had, an offer. We had very, very little interest in acquiring. By the way, that surprised me. I just assumed people would be knocking our door down back in the day. Almost no interest.

Okay. I remember when we were starting HubSpot, we wanted VCs who had been CEOs. And by the way, most startups don’t have a choice of, like, 20 term sheets. We certainly didn’t. If we had the option of having a VC who was the CEO before, that was a we would go with that. It was a plus if the terms were the same. And our A and our B were VCs who had been CEOs before. Pat had not, and he did the D, and he had an observer seat.

And I would say Pat was relatively quiet, but Pat figured out ways to add value that were super useful around benchmarking relative to every other tech company in the world, network with every other tech company in the world, and really geeking out early on unit economics for SaaS companies. So he found ways to add value where he didn’t stick his nose into operational details per se. So I think both can work. I think the reality is there’s very few VCs today who are been there, done that, CEOs who have built big companies.

There’s very, very few of them. I don’t think you can have that criteria anymore.

Well, I think it’s important if if your VCs haven’t built companies before or or their pattern matching is light, they’re new, having a great independent is worth its weight in gold. So when we were early, we had two founders on the board. We had two VCs on the board. Our first independent is a woman named Gail Goodman that people wouldn’t have heard of. She was the CEO of Constant Contact, which at the time was a real high flyer. And she had real operating experience that was relevant, timely.

She was a couple years up the ice cliff from us. And the thing she had that was useful is the VCs would get on me, like, really grinding me about something not growing fast enough or burning whatever it would be. From time to time, if they were being too aggressive with me, she would sort of back them off. They were a little bit intimidated by her. And that was very, very helpful. She gave us great operational stuff. So having other people in the room who have seen the movie is useful.

And I would push back a little. Yes. Everything is different post COVID. Yes. Everything is different post AI. But building a team, raising money, how do you build a category? How do you build a go to market machine? Like, all of that, that transcends across from the frigging nineteen nineties to today so much of it. So I don’t think things are totally different from pre COVID to COVID. I don’t think things are totally different to pre AI to AI.

I think it is. I mean, at the end of the day, they’re selling a product to their LPs. The customer is kind of the LP, actually. Five percent of the VCs are incredibly successful and 90, you know, 90% are meh. Very few are really successful, but they’re so successful that the category writ large does pretty well. So from that perspective, I think it’s a good category. I continue to invest in it. If you look at it though, the small VCs are the ones where the alpha is, not the big ones.

And VCs, there’s a tendency to get bigger. But in terms of the offering to their other customer, the founders, when we did our Series A, it was a $5,000,000 round on a $6,000,000 pre money valuation. So we sold 4770% of our company on Series A. That was standard, Harry.

We had a $500,000 of revenue growing fast or maybe even a million. It was doing alright. You know, it was in a whole new category that no one really understood, like part Who did that deal? General Catalyst. They killed it.

Yeah. We had three term sheets, and they’re all right around there. I’m not surprised you had three term sheets. Yeah. So I know we’ve had a bubble in 2021 and whatnot, and it’s popped. But even today, you’re doing a Series A. The product is much better. You’re raising 5,000,000 on a four I mean, you’re not you’re not diluting 40% on your round.

I do I think this tendency to grow the AUM because you get management fees on the AUM and limb off those management fees, and there’s such a long timeline on where the returns are coming in. I think this is incredibly tempting to general partners and venture firms, and that’s led to there’s too many firms. There’s too much money. Let’s say you were going to start a venture capital firm in tech right now. Oh my goodness. You better have a good angle on it because it’s so hard to compete.

I have an angle. You know, we’re doing

I don’t even think that’s enough in the angle. Like, if I were to go in and try to compete with Andreessen, Sequoia, with all those folks, I don’t think that’s a good enough angle. My angle is I start a climate fund investing in ocean startups. And the reason I did that is because the ocean’s absorbing much of the carbon dioxide today, and it can absorb, if you’re careful with it, much, much more. And there wasn’t, like, a real ocean climate fund out there, and I wanted to have an impact.

I’m like, that’s where I’m gonna spend my money. And so we become like a magnet. If anyone’s got an ocean tech startup, you know, they come to us.

It’s with a firm here in Boston, a storied firm. It had a storied founder. We had pitched one of the partners several times, guy Jeffrey, and he was interested. So we came in for the full partner pitch. And the founding partner was a little rough. Anyway, he sat next to me. I hadn’t met him. He’s kind of a legend. And I’ve done a lot of venture pitches. I had it down. Let’s just say I’m lively in the pitch, and he fell asleep. He fell fucking sound asleep during my pitch.

And they sat next to him, and I kinda nudged the chair, woke him up. And so we finished the pitch, and I remember Dharmesh and I looking at each other, well, I guess we’re let’s we’re not gonna get a term sheet from these folks. And then ironically, they went away and came back and gave us term sheet. Yeah. I was like, oh, that’s strange. And then we got the term sheet, Harry. It came through faxes a long time ago, and we got it. And I quickly looked at it.

I was like, oh, it looks decent. Send it to my lawyer. And within five minutes, my lawyer called me, which is unusual. And he said, oh, I saw the term sheet. And I was like, yeah. How’s it look? He’s like, did you see the pool? And I said, I didn’t really take a look. Remind me what the pool is again. Because this is our Series A. He said, oh, yeah. It’s the amount you’re you’re holding aside to hire people. He said, did you see the size of it?

I said, no. He said it’s 22%. And I said, okay. Is that normal? He said, 7% or 8% is normal. 22% is a lot. He said, why don’t you call him and ask him about that? Hung up the phone, called Jeffrey, and I said, thank you. By the way, thank you for the term sheet. Very surprised we got it after the the fact. The firm fell asleep, but thank you. Just out of curiosity, why is there such a large pool? He said, well, just in case we need to replace the CEO.

I was like, I’m the CEO. When when were you gonna tell me that you were planning on replacing me? He’s like, well, there hasn’t been a good time up until now, but why don’t we talk about it? So that was sort of a bad experience with me with founder falling asleep. And, yeah, they wanted to replace me.

Okay. I’m gonna give you a snobby answer. I got three things from my MBA. I got a lot of knowledge. I had a great network, including a cofounder and all our angel investors, and I got some pedigree. The truth about an MBA is you can get the knowledge from any MBA. It’s the same stuff they teach at every MBA program. You can even get it online now. You only get the pedigree in the network from top tier MBA programs. So I think it’s worth it if you go to a top tier MBA program.

I would also say I don’t think MBA programs are breeding grounds for founders. It’s a relatively like, if you’re doing the decision tree on your career and you decide to do an MBA, it’s a pretty risk averse move. It’s not a risk seeking type of a move. And so I don’t think MBA programs are breeding grounds for great entrepreneurs necessarily.

No. I don’t think so. I think I learned a lot about being a CEO from those three other CEOs I worked for. I learned a lot about being a CEO at Sloan because they brought somebody in to do fireside chats and whatnot. And I think even as a CEO, I’ve gotten, I wouldn’t say even better, just like evolved with the company over time and improved. I think it’s a craft, just like products craft.

We started in 2006, 2009. It was the rate in the teeth of the recession. Our retention rate was really we were losing 7% of our customers a month. That was that was the only time I thought that we’re not gonna make it. This is gonna go out of business. I thought that was and it was about the the three or four months.

I mean, all their companies were going sideways, but we were going really sideways. I don’t remember. I don’t remember what the event that wasn’t doesn’t stand out to me. I just remember being in the company, talking to customers a lot, working on that retention, working on the product.

The economy got better, which helped. I would say one of the things I would criticize about HubSpot and myself is I think oftentimes companies reflect their CEOs. And I grew up in sales and marketing, and we overinvested in sales and marketing. We overinvested in our hockey stick curve. We overinvested in the process of turning a prospect into a customer and get really good at that conversion rate. We should have overinvested in turning a customer into a delighted customer. So through all that, we went from being kind of a sales driven culture to much more of a product driven culture from turning prospects into customer culture from to customers into delighted customers.

So it sort of changed the culture, changed where we put things in the p and l. It really changed a lot.

It killed part of it, I think. Let’s say you’re a scale company and you’re looking to buy business for $20.30, $40,000,000. It’s not just that it might not get approved like Figma didn’t. It’s a fifteen month cycle to find out. And so it used to be you’re doing an acquisition. It’s three or four months. Now it’s like a good fifteen months to get through The US, get through The UK, get through the EU. And so all that time, a lot can change. So I think you’ve gotta think long and hard before doing a good sized acquisition.

Having said that, I think the smaller m and a market’s gonna be wide open.

I think a lot of companies are gonna have to sell. They’re gonna get stuck.

I I don’t think they get blocked. I think you’re doing an acquisition under 10,000,000,000. Unless it’s super strategic, I don’t think it gets a long look from the regulators. I think those flow through, and they happen pretty quickly. We just bought a company. It was a couple months. It was it was vast. It was $200,000,000 ish deal. So I think more of those happen. I think VCs, I think they’ll be very happy to sell their company to a HubSpot or Atlassian or Dropbox or you name it or even a bigger company.

I think Microsoft can buy companies or Google that are 5,000,000,000 or less. I think those go through.

I think it’s just correlated with Nasdaq. There was this weird bump that happened in q four, and it’s come down a little bit. Nasdaq’s up. You look at stocks like HubSpot. Like, it was running along kind of in a normal path. The market cap went up to 40,000,000,000 back down to 10. It’s at 28 now. We’re not an asset for neurosuction, but, you know, the tech public valuations are decent. So I think it’s a decent time. If you’re Stripe or you’re I don’t know any number of companies, Reddit, I think you get a decent valuation.

That’s a brutal one. And I think people will talk about that a lot in Twitter, and I do think Jeff was a good CEO. But that’s an exception. Exception. Like, the number of companies where there’s activists crawling all over them, there’s a lot of public tech companies out there. It’s not that common.

One thing I like to do is I like to spend time with founders, CEOs, startup CEOs that want to be scale up CEOs. They want to go through that journey I went through. And I like helping them avoid all of the mistakes I made on that journey. And I do that with my climate fund. I do it with, like, Sequoia. I’ll do that with Sequoia founders, and I enjoy it. It’s sort of a hobby, and I feel like I’m giving back to that founder and giving back to the universe a little bit.

So I want to do more of that. I think it’s quite enjoyable and a good thing for society.

you mean one of?