0:00

When we did our Series A, it was

0:02

a $5 million round on a $6 million

0:04

pre-money valuation. So we sold 47% or something

0:06

percent of our company in Series A. That

0:08

was standard, Harry. We had a half a

0:10

million dollars of revenue growing fast or maybe

0:12

even a million. It was doing all right.

0:14

Series D, our last meeting was a guy

0:16

named Jim Goetz. Jim Goetz is kind of

0:18

a legendary VC at Sequoia, sitting in a

0:20

conference room. And I was nervous. And

0:22

Jim walks in and as I'm shaking his hand,

0:24

like my hand is moving up and down like

0:27

this, he says to me, hey, Brian, what's it

0:29

going to take for Sequoia to own a

0:31

piece of HubSpot? And I said, really, not much. Just

0:33

give me a term. I'm ready to go. I

0:35

had no other options. This is 20

0:37

VC with me, Harry Stebbings, and I've

0:39

wanted to have this guest on for

0:41

a long time. For years, VCs said

0:43

SMBs, ah, it's a bad market. They

0:45

churn, they don't pay much. Well, this

0:47

guest today went against all odds and

0:49

built a $28 billion

0:52

juggernaut selling purely to SMBs.

0:54

HubSpot. I'm so excited to

0:57

welcome Brian Halligan, co-founder and

0:59

exec chairperson. Brian led the

1:01

business as CEO for 15 years from

1:03

day one to a $30 billion

1:06

public company with 7,000 employees. Fun

1:09

fact, Brian is also famed for

1:11

coining the term inbound marketing. Following

1:13

a horrific skiing accident, which we

1:15

do discuss in the show, Brian

1:17

stepped down as CEO of HubSpot.

1:19

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1:22

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1:24

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1:26

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as you are. You have now

4:01

arrived at your destination. Brian,

4:04

I am so excited for this. I've heard so many

4:06

things, you know I've stalked the shit out of you

4:08

from all the references, but Pat has told me so

4:10

many good things for years, so thank you for joining

4:12

me. Thank you for having me, big fan of the

4:14

show. That is very, very kind,

4:16

but I want to start, and I was

4:18

reading and stalking, and I heard that your

4:20

first job was as a paperboy for the

4:22

Boston Evening Globe, and you met a family

4:24

called the Harrisons. Can you take

4:27

me to that experience, and what you learned

4:29

through the paperboy and the Harrisons? You

4:32

really did your homework, Harry. I

4:36

think I was 11 years old. There

4:38

was a low point on the route and a high

4:40

point on the route. The low point was house numbers

4:42

4 and 5. House number

4:44

4 had a German shepherd that didn't

4:46

like me coming on the front porch every day, and

4:49

house number 5 had a Doberman Pincher that didn't take

4:51

kindly to me coming on the porch every day. They

4:54

would really give me a scare, and I had the

4:56

paper room for years, and everything never warmed up to

4:58

me, so I got a good scare on house 4

5:00

and 5. Then house 16

5:03

was the Harrisons. The

5:05

Harrisons were a very fun, very successful family.

5:08

I would come in, I'd deliver the paper

5:10

to Mrs. Harrison. It was the last house

5:12

on the route, and she would invite me

5:14

in, and she was a terrific cook, and

5:16

I would help her cook dinner, and she

5:18

was super engaging. She had four kids that

5:20

were all a lot older than I was. Let's

5:22

just say they were hyper overachievers, much

5:24

more overachieving than the Halligan's were. I

5:27

used to play Nerf basketball with them in the living room, and

5:29

we kind of get to know them. That

5:31

was my first job, and I was one of those people that I always had a

5:34

job. The reason that really paid off for

5:36

me, and I think this is what you're referring to, is

5:39

Richard Harrison, Pat Harrison's oldest

5:41

son, gave me my first

5:43

real job out of college.

5:46

It turned out to be a really good spot

5:48

to start my career, so that paper route really

5:50

paid off for me. I was

5:52

looking at Twitter the other day, and Dan

5:54

wrote a set about the importance of saying

5:56

yes and taking the opportunities, and you never

5:58

know where they'll go. And you're like, huh.

6:00

the paper out that led to the first

6:02

year old that led to so much more

6:04

which were going to get into it. Harry

6:06

wasn't just the paper out it was My

6:08

mom said. Mrs. Harrison was very very close

6:10

friends with my mom and my mom had

6:12

lots of great friends in so a little

6:14

bit of it was. My mom gets the

6:16

deserves lot of credit for it in my

6:18

mom's not interested in technology or careers associates

6:20

just wasn't her Ml, but he turned out

6:22

to be with a central player in my

6:24

first job. You know in all the stalking

6:26

I did how I knew that I'd lie

6:28

he say much is because he said. That

6:30

mother's the such an underrated element of

6:32

the Ceos journey and I couldn't do

6:34

it without my mother And so I

6:37

just knew that a great minds think

6:39

alike in that way because he is

6:41

What when you think about that and

6:43

lock vs skill. When. You reflect

6:45

back on not in your career hadi

6:47

things about the weight of lot versus

6:49

the weight, his skill, Lot.

6:51

Of luck. So I first job was at

6:53

a company called Ptc. There was a Cad

6:56

software company and I was employee number two

6:58

hundred and one hundred years ago, nineteen ninety

7:00

and I see for ten years and by

7:02

time I left there are five thousand place.

7:04

I had a great runner. In. A

7:06

just got very lucky landing in

7:08

that spot and I think it

7:10

was Louis Pastor If he said

7:12

luck favors the prepared and of

7:14

our to do sort of a

7:16

correlation of prepared versus luck there

7:18

are squared on that is quite

7:20

high so I've always been over

7:22

prepared for everything and after that

7:24

first job I give preparation of

7:26

fair amount of credit. Maybe it's

7:28

half preparation, half black, half right

7:30

place the right time, but people

7:32

who are well prepared tend to

7:34

be at the right. Place in the right

7:37

time. Have noticed. I. Totally agree. The and

7:39

that's why you provide so well for

7:41

the show. Ah yeah I bet you

7:43

call my kindergarten teacher I either eight

7:45

hour day was hardly unavailable so I

7:47

use grade one teacher had to suffice

7:49

I was it was looking at the

7:51

schedule going Louis Pasteur said i'm like

7:53

I didn't know was Louis Pasteur This

7:56

has to be Brian's into like ah

7:58

but again lightning bugs and pay. Boy

8:00

route you also the before that sometimes

8:02

the lowest paying job is the best

8:04

options a feature see I is and

8:06

I read this knows like I don't

8:08

as know what he means by that

8:10

is it showers and by she's got

8:13

a seat on the rocket ship what

8:15

did you mean by sometimes the best

8:17

as I don't think Shirl was way

8:19

off I've met in that was very

8:21

much case for me So I remember

8:23

this isn't really a hundred years ago

8:25

but I have three offers. One was

8:27

from Pt in really my first job

8:29

Harry. Was I was said what they used

8:32

to call a secretary I was his secretary

8:34

to the head of sales and this company

8:36

in that was the offers Twenty thousand dollars

8:38

in then I had to other offers for

8:41

kind of sales positions in these two other

8:43

companies with higher pay and I chose the

8:45

lowest paying job with the company. the had

8:47

the most upside in with somebody in there

8:50

than I thought just might champion my career

8:52

in this guy richard Harris and that really

8:54

paid off or what happened to those two

8:56

other companies but Ttc still around that Sept

8:59

twenty billion mark cab company. It's done

9:01

quite well in so I don't think cheryl

9:03

he is far off in that hop on

9:05

the rocket ship. Quote I. Guess my

9:07

question to is when he thinks advising

9:09

young people say that is often the

9:12

debate of should I just start my

9:14

company and you learn by doing or

9:16

should you join the rocket ship why

9:18

do you land When advising people laugh

9:20

Yeah I think it's super hard to

9:22

generalize cancers people come out of from

9:24

different angles and are very successful. My

9:26

personal journey was I going to scale

9:28

up not even start ups like a

9:30

joined the two hundred person company that

9:32

was growing quite fast. that was Ptc

9:34

and I ended up being their first

9:36

basically inside. Sales rep and sales and channels

9:39

marking ended up doing lots of different things.

9:41

The movement easy to start Asia and you

9:43

know if you're on a very fast growing

9:45

scale up you get a lot of exposure,

9:47

get a lot of opportunities so that really

9:49

paid off for me. My second job was

9:52

it a completely different company but also as

9:54

job called Groove Network said that she got

9:56

acquired by Microsoft for me as kind of

9:58

middling outcome but same thing. I learned

10:00

a lot but instead of it it P

10:02

D C I learned a lot about selling.

10:05

How do you build a sales organization? How

10:07

do you higher reps? How do you have

10:09

an international lapses had he believes and machine?

10:12

How do you build that revenue edge in

10:14

a groove? Totally different. The founder is very

10:16

different. The orientation was it was a product

10:18

company. I learned habit. think about the future,

10:21

think I'm a product, Think about technology crap.

10:23

Awesome solutions for customers and I learned a

10:25

lot naturally. So for me joining a scale

10:27

up twice really informed hub spot in like.

10:30

P D C and group are very much of

10:32

those companies and their dna are very much in

10:34

so I can look at things that happens. I'll

10:36

a plot point act of those two companies. We.

10:38

Can antigun to each of those components.

10:40

I'm glad you did. A T that

10:42

I do. You have to say when

10:44

we think that and I love this

10:47

and when meeting that reflections on the

10:49

a days to see why we are

10:51

say I think everyone's running towards him

10:53

running from something I know I certainly

10:55

am. My therapist tells me for a

10:57

solid three hundred dollars an hour price.

10:59

Anyway, what are you running towards A

11:01

More? do you running from Brian's I

11:03

don't know I'm trying to run to

11:05

though Happiness: I'm a huge music a

11:07

degree for that. And there's a song. The

11:10

James Taylor I know People, Roller, Isotopes, Joey,

11:12

The live in Iraq, but he's from Boston

11:14

and that you know project that he's got

11:16

a song. It's It's A Secret of Life

11:18

is about enjoying the passage of time. I

11:20

don't think he's wrong about that. And

11:22

I'm trying to enjoy the passage of time

11:25

as a look forward over my next twenty

11:27

thirty years in so that I think that

11:29

kind of what I'm running towards. Do you

11:31

know what truly makes you happy on with

11:33

my open on the zone he is. Why

11:35

does while added tax bill that basically made

11:37

my eyes bleed and it really made me

11:39

question why I do? What idea why sacrifice

11:41

everything that I d niche I never see

11:43

daylight and I was then reminded of what

11:45

really makes me happy by my mantle. And

11:48

it was going for coffee with my mother,

11:50

moving around the park and then the money.

11:52

Yes it's. important to an extent but

11:54

it's not everything if i asked you

11:56

what really makes you happy brian jean

11:58

i feel sick it says So much

12:00

about things that make me happy is

12:02

about being devoid of sadness or unhappiness

12:04

in avoiding things that irritate me or

12:07

I don't enjoy the passage of time

12:09

of. And so I'm trying to shed

12:11

in my life, people hate to say

12:13

that, in things I don't like to

12:15

do as much as I possibly can.

12:17

I don't think, I'm quite sure, money

12:19

doesn't buy you happiness. I

12:21

have a bunch of it now, I never had

12:23

it, and I'm no happier or less happy than

12:25

I was. I would give myself like, my

12:28

MPS score on my happiness is like between an 8

12:30

and a 9. Pretty happy. And I've been

12:32

an 8 and a 9, between an 8 and

12:34

a 9 forever. Bunny buys you convenience, it's really

12:36

the only thing it buys. That's

12:38

valuable. It enables you to do

12:41

less things you don't like to do.

12:43

I'll give you a very good example.

12:45

The one thing I've done with some

12:47

of the wealth I've created is I've

12:49

high, back to my mother. My

12:51

mother was dying, she had a home

12:54

health aide named Marilyn from the Philippines. I loved

12:56

Marilyn. And she took care of my mother for

12:58

years, she was almost part of the family. And

13:01

then my mother sadly passed away, so we were

13:03

loosely kept in touch with Marilyn. And then a

13:05

couple years later, Harry, I had a brutal snowmobile

13:07

accident. I was in the hospital for a long

13:09

time, I was in a wheelchair for a long

13:11

time, six months in a wheelchair. And I needed

13:13

help, so I reached out to Marilyn. And I

13:16

said, Marilyn, could you take care of me the

13:18

way you took care of my mom? And she

13:20

said, sure. And so for a couple months, she

13:22

didn't move in, but she was in my house

13:24

all the time. And she was

13:26

wrapping that up. And then

13:28

she was resigning. She basically said, I'm

13:30

done, you know, you're fine now, you're out of

13:33

the wheelchair, I'm going to move on. And

13:35

I said, wait a sec, wait a sec, wait a sec. Can you cook?

13:38

I said, no. I said, can you clean?

13:40

She said, oh, yeah, I can clean. I

13:42

said, what if we change your job? And

13:44

you just took care of me. You took

13:46

care of my dog, you cooked, you cleaned,

13:49

you organized. And so I hired Marilyn, I

13:51

don't know, a year and a half ago.

13:54

And she's terrific. She's a warm presence in my

13:56

life and my dog's life. And

13:58

she just does. so much stuff,

14:00

you just avoid that. I don't have to do laundry,

14:02

I don't have to clean up the cook, I don't

14:05

have to think about so much stuff because she does

14:07

it. That's the only thing of like real value that's

14:09

been created from the wealth of creative with HubSpot. I

14:14

get you. What about security? My family lost

14:16

everything when I was young and it, you

14:19

know, one of my running from a little

14:21

bit is towards financial freedom of having enough

14:23

to not worry for my family. Do you

14:25

appreciate the security that it brings or actually

14:27

are you much more of a risk taker?

14:29

It's like, ah, I was fine without money.

14:31

I'll be fine. Whatever. I never worry that

14:34

much about it. I always thought I'd have

14:36

some measure of success and I would be

14:38

fine. I just always sort of had a

14:40

confidence in that somewhere deep down inside.

14:42

And so yes, I'm financially

14:44

secure fine. But I

14:46

think I worried a little bit less about

14:48

that than everybody else. There was something down

14:51

deep inside of me that wasn't that worried

14:53

about that. I knew I had the ability

14:55

to create something even when I was very

14:57

young, just back to my youth, I had

14:59

the paper out. But I was that kid

15:01

who always had a job. I worked at

15:03

a gas station. I worked at a fish

15:05

market. I was a barback. I was a

15:07

waiter. I did like every job you can

15:09

imagine. They started a painting company. Every summer

15:12

I painted about 5% of Cape Cod and just

15:14

worked my way through every summer being another 5%. And

15:17

so I always knew that I would be

15:19

I would be fine financially. I just had

15:21

that feeling deep down inside. You know, every

15:23

farm to meeting I have, I always ask

15:26

the question, how did you first make money?

15:28

Because I've never met a great founder who

15:30

goes, Oh, I went to Yale or Oxford

15:32

or Stanford, and then I joined McKinsey or

15:35

X. Every great

15:37

founder did a paper out,

15:39

started building websites, they sold

15:41

clothes at school, they did

15:43

Beanie Babes on eBay, something

15:46

entrepreneurialism always starts early for

15:48

the truly exceptional people. I

15:50

think that's really an interesting observation, actually. Thank

15:53

you. I'm glad. I'm glad I

15:55

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

15:57

Please, I'm loving this. So you said also about

16:00

running from or avoiding things you

16:02

don't like without naming the people

16:04

because that might be egregious. What

16:07

did you cut out of your life that

16:09

you didn't enjoy? Okay, I mentioned a minute

16:11

ago I had this very

16:14

bad film mobile accident. I love the way

16:16

you're like just like laughing. This was such

16:18

a serious accident. Yes, God I was going

16:21

to die like went off a cliff was

16:23

in the cold dark of night of Vermont

16:25

freezing cold night. No one knew where I

16:27

was. I got very lucky and was

16:30

saved. But while I was sitting there, I was thinking

16:32

a lot about my life in that moment and I'm

16:34

fairly reflective about my life and it was just coming

16:36

off the New Year. So I've been thinking a lot

16:38

about it. But in that moment, I thought if

16:42

I make it alive, if I make it out

16:44

of here, what should I change? And one of

16:46

the things I thought about it on the bottom

16:48

of that cliff was I

16:50

don't want to be the CEO of HubSpot anymore.

16:53

You know, I started this thing. It's got 7000

16:55

people. It's a

16:57

big company. It's going great. But I don't

16:59

think I'm necessarily well suited for the next

17:01

phase from 7000 to 70,000 or whatever

17:04

it is from 20 billion mark gap

17:06

to 200 billion mark cap. I didn't

17:08

necessarily enjoy the work at that size

17:10

as much as I enjoyed it, you

17:12

know, in an order of magnitude smaller.

17:15

And so I really made the decision in my

17:17

head on the bottom of that clip that night

17:19

that if I make it out alive, once I

17:21

recover, I'm going to hand the reins off. And

17:23

that's exactly what happened. I was out of work

17:25

for seven months and seven months in the day

17:27

we gave the job to Yomani Schuster

17:30

epic CEO of now and chairman.

17:33

And that turned out to be a very good decision

17:35

for me. I'm generally quite a bit out. I didn't

17:37

love the work of a big company CEO. And I

17:39

don't think it was that good at it. Why?

17:43

I like it earlier, smaller

17:45

team where I know people,

17:47

I'm really viscerally in touch

17:49

with the product and the

17:51

customers. I'm not worried too

17:53

much about governance, about enterprise

17:55

risk management, about things like

17:57

that. I don't spend much

17:59

time. all speaking with lawyers and

18:01

law firms. I like the scale up phase

18:03

of 20 to 2000, I think was

18:06

where I was at my best. I don't think I was meant

18:09

my best from two of us to 20 or

18:11

2000 to where we are today. But I think I was kind of at

18:13

my best between 20 and 2000. Do

18:15

you think people are destined for certain stages

18:17

of company building? You know, there's that like

18:20

very standard statement that like, oh, people are

18:22

very much meant for a certain stage. Do

18:24

you buy that? Or are you like, No,

18:26

I've seen many people transcend that and it's

18:28

bullshit. I think it's right. I didn't think

18:30

so. When we started the company that the

18:32

crew we hired in the early days of

18:34

HubSpot were terrific, very bright. And

18:37

I thought, you know, if we ever make it

18:39

to the size we are now, which, you know, I

18:41

would have put a very low odds on that

18:43

it would be the same crew. And we're I think

18:45

on our third or fourth generation of leaders at

18:47

HubSpot, and there was nothing wrong with that original crew.

18:49

In fact, they've gone on to do amazing things. But

18:52

I just don't think they were interested in

18:54

that next phase. And so I think it

18:56

needs to evolve and your team needs to

18:58

evolve over time. And when I look at

19:00

our team, we'll probably get into this. But

19:03

we've always had an interesting mix on our

19:05

executive teams of people who we've hired kind

19:07

of been there, done that from the outside,

19:09

and the people who kind of came up

19:11

through the system. And I like

19:13

it. And I know you're from the UK. So you don't

19:16

know about we have a thing in the United States. I

19:18

don't know if you've heard of it's called baseball. Yeah, I've

19:20

heard of it. It's like rounders, but more popular. Like the

19:22

Boston Red Sox didn't win a world

19:24

championship for 84 years, very frustrating. And

19:26

they won four in the last 20.

19:28

And when I look at the teams

19:30

that won, they were a nice combination of people

19:32

they drafted out of high school and kind of

19:35

came up through their system and really got it

19:37

mixed with some free agents or a little more

19:39

expensive from other teams who had seen success before.

19:41

And that mix really works. And I think that

19:43

has worked for HubSpot. We've got a mix of

19:45

people kind of grew up through our system. And

19:47

we hire people from the outside. That's proven to

19:49

work pretty well, I think I think that's a

19:51

good formula. The final one I have to touch

19:53

on before we do discuss some of

19:56

the mechanics of your leadership is I identify

19:59

myself with 20 BC, it's all

20:01

I've ever known as an adult, which is

20:03

quite terrifying. You'd been involved

20:05

for so long, it was such a part

20:07

of your identity. Was it difficult to transition

20:09

out just in terms of losing a part

20:12

of your identity? Okay, it's

20:14

a really good point about that.

20:16

I remember looking at my review,

20:18

maybe five, six, seven years in,

20:21

and seeing comments in my

20:23

review about how Brian doesn't

20:25

understand that he actually is

20:28

HubSpot. It's

20:30

embodied in him, in that

20:32

every action he takes and every

20:34

decision he takes is really HubSpot

20:37

and how those things came together.

20:39

I was quite surprised at how

20:41

much those things had merged together

20:44

in the employee's mind, at least. That

20:46

was actually some useful feedback and a useful

20:48

revelation. It made me think more carefully about

20:50

my actions and my decisions I was making

20:53

because I hadn't realized those things had kind

20:56

of merged together. I think that probably

20:58

happens with CEOs or founders of all

21:00

companies as they scale. It took me

21:02

by surprise how much those things came

21:04

together. I'm still involved, so it totally

21:06

hasn't happened. I'm still the chairperson. I

21:09

still go to the office. I think

21:11

I'm not totally disassociated with it. I

21:13

think that's okay. If I had just

21:15

left Harry, I think that would

21:17

have been tough for me. I think you're right. I

21:20

think my identity is pretty wrapped up in HubSpot. There

21:22

would be some sadness around that, I think. I

21:25

always struggle to go on holiday

21:27

because suddenly you're apart from your

21:29

work. When your work is such

21:31

a large part of you, it's like, it feels

21:33

quite isolated and not very good. Yeah,

21:36

I think so. It's a non-sequitur, but in

21:38

the Wall Street Journal yesterday, the day before,

21:40

there was an article about Elon Musk. Elon

21:43

had an amazing quote about vacation, so

21:45

he worked a crazy amount of hours.

21:48

He said, oh yeah, a vacation. That's email with

21:50

a nice view. I

21:53

thought that was pretty

21:55

funny, actually. I do

21:57

want to touch on your leadership. something

22:00

that so many of the references that I spoke to

22:02

said that we really needed to dig in on. And

22:05

I think people change so much over time.

22:07

So when you compare Brian Halligan that started

22:09

HubSpot in 2006 to the

22:11

CEO that transitioned to Yamini

22:13

in 2023, what are the

22:15

biggest differences in that style

22:18

of leadership? Okay, I mentioned

22:20

reviews earlier. One of the

22:22

best things my co-better, Darmesh, has done, he

22:25

owned doing my annual 360 degree review

22:28

and he did it in a remarkable

22:31

way. And we started doing this like five,

22:33

six years in. The way Darmesh does a

22:35

review, sir, Darmesh is very introverted and does

22:38

not want to talk to anyone. He

22:40

really does it. So he does a

22:42

net promoter survey on me. And so he

22:44

sends a net promoter survey on a scale

22:47

of one to ten, how likely are you

22:49

to refer Brian as the CEO of HubSpot

22:51

and then why? And he sends it to

22:53

30 people, board members, executive team members, frontline

22:55

members, partners, and people score

22:57

me. And then they write a novel,

23:00

Harry, like a novel about

23:02

me. And

23:05

then Darmesh takes a while and synthesizes

23:07

it together in a really cool way.

23:10

And I remember the first one I got was 20

23:12

pages, so I reviewed this 20 pages

23:14

long. And I started reading it.

23:17

The beginning of it is, here's your score

23:19

and then here's your features. So Brian's really

23:21

good explaining the vision of HubSpot, for example.

23:23

And then he would pull out direct quotes

23:26

from three or four of the people who

23:28

had said that theme and I could read

23:30

the quotes. Brian was his, and I'm reading

23:32

through it. And the first 10 pages, Harry,

23:34

I was pretty convinced I was the best

23:36

CEO ever, ever, because it was all my

23:38

features. I got to page 10, halfway through.

23:41

And the next 10 pages were my bugs.

23:43

And there was a full 10 pages of

23:45

bugs with direct quotes pulled out each one.

23:47

And I had a big class of, I

23:49

had a big class of scotch. I

23:54

was done with it. Pretty well convinced

23:56

I was the worst CEO ever invented.

24:00

But that was a very, very, very

24:02

useful exercise we went through every year.

24:04

And now Yamadi goes through it to

24:06

get awesome feedback that's well

24:08

organized. Infinite numbers of things I was

24:10

bad at and not good at. And

24:12

they were all surfaced in that process.

24:15

What are the biggest elements that you changed

24:17

on the back of those reviews? I

24:20

would say the biggest one that just I

24:22

couldn't put to bed and would come up

24:24

year after year after year was. My

24:28

thinking is the control freakin'

24:30

ish of founders is

24:33

a amazing strength in startup mode

24:35

and that amazing strength of founders

24:37

turns into an amazing weakness as

24:39

you scale. You're more prepared than

24:41

everyone. You're overthinking and you're basically

24:44

doing everyone else's job. And

24:46

that just came up over and

24:48

over and again. And I

24:50

do think I improved on that over time.

24:52

Like the same weaknesses would come up year

24:54

after year. And some of the

24:56

weaknesses were or some of the bugs are like, you

24:58

know, it helps spot if there's a bug sometimes it's

25:00

like, actually, that's the way we designed it

25:03

worked as designed. Some of the bugs were

25:05

actually, I thought features and they'd show up

25:07

on both sides. So I would pick a

25:09

couple things that would work on improving. And

25:11

then a lot of them, I would just

25:13

be like, you know what? I'm never going

25:15

to get better at that. I'm going to

25:17

try to hire people who map perfectly into

25:19

those weaknesses. So I'm the type of person

25:21

who's okay, great. I've got all these weaknesses. I try to

25:23

hire around them and I try to advise my folks that

25:25

are around them and I lean into my strengths. So if

25:27

I have a strength that's like a 10 X strength, how

25:29

do I make that not 100 X strengths or get a

25:31

weakness that it's a minus 10 X strength? Just leave it

25:34

at minus 10 X because I'm never going to get it

25:36

to the plus 10 X. That's kind of

25:38

how I think about it. Did it upset you? Yeah,

25:40

kind of. Yeah. Reading that was a

25:43

little upsetting. Yeah. So I've been reading

25:45

about Jensen Huang and Elon because they've

25:47

got such unusual CEO styles that completely

25:49

fly in the base of everything that

25:51

any CEO coach or anything you read

25:53

about being a CEO will teach you.

25:55

Jensen Wang's really got a very different

25:58

playbook. He's CEO of Nvidia. One

26:00

of the things he does is he criticizes in public.

26:03

So he's got his team, he's got 40 direct

26:05

reports, which is pretty weird, or

26:07

50 direct reports. And if somebody says somebody

26:09

disagrees with or does something that he didn't

26:11

like, he will in front of everyone. I

26:14

think he does it in a very

26:16

nice way, but admonish them or criticize

26:18

them or give them feedback so everyone

26:20

can hear it. And I remember back

26:23

in the day getting feedback that I

26:25

used to do that, people really did

26:27

not like it. And I probably didn't

26:29

deliver it as diplomatically as Jensen does.

26:32

And that has popped into my mind and

26:34

I sort of fixed that. I always try

26:36

to give kind of negative feedback from private

26:38

and public praise in public. I think Jensen

26:40

might be onto something on that. I think

26:42

I could have delivered it more diplomatically, but

26:44

that was one I was thinking about as

26:46

I was thinking about this interview that I

26:48

wonder about. Brian, help me. I'm a young

26:50

CEO. I am incredibly direct.

26:52

Me and you sit down and I say, Brian,

26:54

listen, let's be honest, that was shit. You need

26:56

to improve on this, this and this. And please

26:58

don't do that again. And people find me too

27:01

direct and too harsh, if we're honest.

27:04

I was insane. One of the things I worked

27:06

on was getting more diplomatic over time. And

27:08

the other thing that I didn't realize

27:10

is how much, Harry, people really listen

27:12

to everything you say. So you emerge

27:14

as the founder with the company, everything

27:16

you say, people pretend like they don't

27:18

listen and they push back at you,

27:20

but they remember what you say. You

27:23

run into somebody and you'd be walking

27:25

down Newbury Street in Boston, bump into

27:27

an employee, you'll have coffee with them

27:29

and they'll say something. Remember when you

27:31

said this four years ago at a

27:33

company meeting? No, I don't remember that

27:35

at all. So people

27:37

really, really listen and over index

27:39

on what you say. And so I

27:41

do think getting better and more diplomatic

27:43

over time did help me and helped

27:45

the company. You said they're about the

27:47

control-freakedness. I get you, but I

27:50

quite like sweating the detail. And I think

27:52

some of the best owners do sweat the

27:54

details. You mentioned Elon. When you

27:56

think about Elon and his mind, I Don't know

27:58

if you listen to Walter Isaacson work. The either

28:00

but you don't want to. My special

28:02

things about him is like the detail

28:04

orientation he applies to systems, machinery, systems

28:06

thinking. I think Ilan sweats to details

28:08

and I think some of the bass

28:10

do How do you balance sweating the

28:13

details but not being to control freak

28:15

out to be the one thing I

28:17

learned from you on So Square has

28:19

an annual it's I call it a

28:21

glamping event dimension. I've I would describe

28:23

as as is indoors, he not outdoorsy.

28:25

If so they invited us the guy

28:27

of the event we debated it likes

28:29

we go. With and clapping of air but great

28:31

speakers give you really it. So we went and

28:33

I'll tell you. funny story bet bet. With. The

28:36

first glamping of and we went

28:38

in. the first night Harry

28:40

was sneezing cold. The cold. Air

28:43

kills three they and weren't

28:45

as and I'm like. Why

28:48

did they come here In my

28:50

head Made was John Collison from

28:52

Strike. And. I just remember I

28:54

was so darn cold that that I

28:56

was tempted to be I hate just

28:58

as good Wheaton. so cozy up here

29:01

so we know three the death and

29:03

it's a fortunately resist the that temptation

29:05

but I've never been as goal Anyway

29:07

the next day he was spoke and

29:09

I remember his by the days as

29:11

you probably would forget it and Pete

29:13

spoke about factor so it's a physicist

29:15

and he thinks but factors in their

29:18

power in their strength. And. He

29:20

talked about organizations have all their people

29:22

are different factors. In a most organizations

29:24

you have some strong vectors, really strong

29:26

boys and something was wrong poise and

29:28

most organizations your vectors are pointed all

29:30

over the place. And. He's like the

29:33

one thing he focuses on of the detail about

29:35

it. You're trying to get all those darn vectors

29:37

pony in the same direction. Small. Vector big

29:39

vector but all pointing the same rex it and

29:41

i kind of think about as inside of have

29:43

spotted eight thousand people. In. If everyone's pointing

29:46

in different directions you add let's say eight

29:48

thousand is each of value of one. And.

29:50

Are all point each other. You get a value

29:52

of zero but if you get them all point

29:54

in the same direction you know the value is

29:56

a tough have you get as close to eight

29:58

thousand as he possibly can. I. Remember that

30:00

clearly from them so I think he's in

30:03

detail on certain things. but certainly not. Everything

30:05

is C O M X number company the

30:07

can remember I six companies. He can't be

30:09

completely in the details and everything, but it's

30:12

in the details on systems thinking, types of

30:14

things like that. As funny as

30:16

I went to a Sikora van and

30:18

John was my attempt may enhance suggested

30:20

spooning so. So

30:24

I'm gonna listen to this and be right. What? thousand?

30:27

And my questions yours yours. On that light of

30:30

that is what is Ashley mean? Brian Side Sammy

30:32

Like sad an all star on a line. everyone

30:34

to the same goal Or is it like may

30:36

ever have the same similar broad set of skills

30:39

you don't want Max and you'll have weaknesses that

30:41

aren't covered. What does not? As you mean in

30:43

reality, I think it's really underrated. I'd spend. A

30:45

lot I'm sorry founders who are Ceos. I

30:47

want to go from start to scale up

30:50

and I think a big leap for hub

30:52

spot was when we got on this vector

30:54

bandwagon and we got into a planning psycho

30:56

word me like you're sort of mission is

30:58

let's I'd change that are change of rarely.

31:00

Here's our strategies for the is this year

31:02

here the main initiatives we're gonna work on

31:04

for this year. Here's our going to track

31:06

them here is that infinite number of initiatives

31:09

that are proposed to be bored sitting around

31:11

talking about want to do in your pet

31:13

rocks that we're not doing this year. And

31:15

word. Is gonna ignore them for another

31:17

year Once we got some discipline around

31:19

that the than the of factors go

31:21

live The company worked a lot better

31:23

we mentioned that can have my directness

31:25

on times in my feedback and then

31:27

I in i mentioned listen to the

31:29

scott chef Malathion I speak to you

31:31

and i honestly likud other ceos read

31:33

about others here is why should be like

31:35

that I should be like that and

31:37

he said before it be a south

31:39

bomb as he enters on sammy weighs

31:41

beside her he's of be a hooker

31:43

in is plagiarism is a friend. Unless

31:45

your bill Ackman be yourself because every

31:48

has ss kill everyone else is taken

31:50

That did. You always know the lead

31:52

of the you were and can you

31:55

tell me to a time when maybe

31:57

you didn't I still don't carry. yeah

31:59

one. Thing I've learned about Ceos:

32:01

they're all very very different in

32:03

there isn't one model or widen

32:05

formula or wide and backgrounds. I've

32:08

tried to look at different Ceos

32:10

and come up with the rubric

32:12

of like this is what you

32:14

look for Here's the five questions

32:16

you should ask pandered to tell

32:18

if they can scale to see

32:20

a I haven't come up with

32:22

that yet. I had three Ceos

32:24

prior starting up spot that I

32:26

work for. One of them was

32:28

an inspirational sales leader. One.

32:30

Of them was a very detailed finance

32:33

venture type percent another was a product

32:35

visionary. They could not have been more

32:37

different in background in the Meteor in

32:39

leadership style. I tried to take the

32:42

best from all of them, but I

32:44

was just struck as a look back

32:46

at how different they are. So I

32:49

think there is like a playbook or

32:51

criteria that this is what is he

32:53

or she be like. I'll tell you

32:56

another story Harry When we had about

32:58

twenty employees I joined a Ceo group.

33:00

By the way, pure see out there t

33:03

of groups are incredibly helpful and I joined

33:05

one in Boston. It was called the High

33:07

Growth C O Group in the were nine

33:09

members of it in there were looking for

33:12

a camp and I interviewed to join and

33:14

I largely wanted to join because one of

33:16

the members was a guy named Call an

33:18

Angle you wouldn't have heard of Com but

33:21

he started. I robot the room of Back

33:23

and In. I would describe my relationship with

33:25

Call In In in two words: Man.

33:28

Crush. I will. he'll be spotty was amazing

33:30

he was at Mit guys are company was

33:32

public it was a high flyer the time

33:34

and I just wanted to learn from of

33:36

in. there was another guy on there that

33:38

had started a company got he ain't called

33:40

Ruff Wilcox and that was another high fire

33:43

that human have heard of but they made

33:45

the screens for the Kindle when the kinda

33:47

was for south so that fire and then

33:49

there are a bunch of other Ceos of

33:51

other kind of random companies but I really

33:53

like that you guys in seven of the

33:56

Ceos were hired gun Ceos from the outside.

33:58

kind of them there done that in two them,

34:00

Russ and Colin were founders.

34:02

I remember at the time 20 employees

34:04

in, I wanted to seem like a

34:07

CEO. I wanted to act like a

34:09

CEO and I wanted to be, you

34:11

know, central casting. And what I noticed

34:13

in those meetings was two of the

34:16

companies were incredibly successful, seven were kind

34:18

of going sideways. The two were successful

34:20

were founder CEOs. And those founder CEOs

34:22

were really frigging quirky, like super quirky

34:24

guys. And they're great. And the other

34:27

guys acted like CEOs. And I was

34:29

like, I'm quirky inside. Maybe I can

34:31

just be quirky like these two. And so I

34:33

tried to start being myself after that and it

34:35

paid off. Trying to be somebody else has a

34:38

lot of overhead to it. Those two had a

34:40

big influence on my career. I love that. I

34:42

totally agree with you on the quirkiness. Anyway, I'm

34:44

just going to, I'll save you the worry if

34:46

you're already like, are you quirky, you're quirky. Me?

34:49

Yes. I am not quirky.

34:53

Thank you so much. I do want

34:55

to learn from you though. And kind

34:57

of start at the talent funnel. Hiring

34:59

is something that I would say is

35:01

my biggest weakness, obviously, actually, Brian. I hire

35:03

amazing people, but I have a low hit

35:05

rate. So

35:08

like 50% workout was

35:10

the review that we had. I hired 10

35:12

people in the last three months. Five stayed

35:14

in three months. What are your biggest lessons

35:16

on how to hire the best talent? And

35:18

what would you advise me? Okay. One of

35:20

my biggest lessons is that's about right. I

35:23

used to beat myself up when we'd turn

35:25

someone over, but I think most scale ups

35:27

aren't that good at hiring. And I think there's

35:30

a fair amount of luck involved. They don't

35:32

have a great hit rate. I think 50%

35:34

within the first year and a half is

35:36

close to what most companies are in scale

35:38

up mode. It sounds a little high for

35:40

where you are, your small organization, but it

35:42

helps if we turn someone over a year

35:44

and a half in, we definitely beat ourselves

35:46

out in like all that. But when I

35:48

talk to our peer companies, it's kind of,

35:51

it's high. Like there's a lot of turnover.

35:53

What are the biggest hiring mistakes you made?

35:55

I'm a big one for falling for logos.

35:57

One. Okay. I would kind of frame it.

36:00

different way from the logo per se.

36:02

My analogy for being a founder CEO

36:04

trying to go from startup to scale

36:06

up, it's like you're climbing a mountain

36:08

and it's very icy and there's like

36:10

an ice clip in front of you

36:12

to get to the top. I think

36:14

when you're trying to get your pick

36:16

and you're going up the mountain and

36:18

it's treacherous and most people fail. There's

36:20

a reason they fail, it's really hard.

36:22

And where I think people fall down

36:25

in hiring and when they're

36:27

hiring board members, they're hiring tech

36:29

team members. It's not just the

36:31

logo. What you want is somebody

36:33

who's three years up the ice

36:35

cliff from you who's struggled through

36:37

that same path. What you don't

36:39

want is someone who's 10 years

36:42

beyond it or even worse

36:44

somebody who's never really climbed that ice

36:46

cliff. They started their career on top

36:48

and stayed on top. And so it's

36:51

not just the logo. Like I think

36:53

it's okay if you hire someone from

36:55

a much, much bigger company,

36:57

if they have climbed up that ice

36:59

cliff and they have seen the lessons.

37:02

And I'll give you a great example

37:04

for HubSpot. We hired a board member

37:06

a long time ago whose name is

37:09

Jay Simons. And Jay was the COO

37:11

at Atlassian. You had the Atlassian founder

37:13

on your podcast. I know Jay

37:15

well, I had Jay on. He's a absolute

37:18

legend. He was three years

37:20

ahead of us on the ice cliff. And

37:22

HubSpot's whatever, two point something billion revenue there

37:24

for something. There were a few years ahead

37:26

of us on the ice cliff. He

37:28

had just seen everything already. So he's on

37:30

the board or having an issue. He had

37:33

just solved that issue or just dealt with

37:35

that issue. And so that recent relevance was

37:38

incredibly valuable. And so that's what

37:40

I would encourage. And so

37:42

like a HubSpot's hiring today, we're looking for a

37:44

board member. I'm pretty skeptical of

37:46

hiring someone who's been in Google a long

37:49

time or Microsoft a long time. But if

37:51

I'm looking for someone who's in ServiceNow or

37:53

Intuit, that's pretty interesting to me. So I'm

37:55

looking for somebody a few years ahead of us. Would

37:57

you hire someone if you had reservations about...

38:00

them. I'm asking specifically, I'm hiring

38:02

someone potentially now, I do

38:04

have concerns. I don't think I ever

38:06

hired anyone where I didn't have some concerns.

38:08

There's always red flags. And

38:11

you just got over them. How often did

38:13

those red flags materialize versus they didn't? They

38:15

usually did. You mentioned the quirkiness.

38:18

Yes, I'm quirky too. I also

38:20

work really hard and I drive

38:22

a very intense culture of hard

38:24

work. That's not very

38:26

popular in modern society with younger

38:29

people. How do you think

38:31

about like founders who are quirky showing their

38:33

quirkiness in hiring? Do you know what I

38:35

mean? I don't want to put people off

38:38

by being too quirky upfront. I think you

38:40

have to be yourself. You have to shave

38:42

off a little of your hard edges probably.

38:44

I had to definitely shave some of mine.

38:46

I was very much myself. And I think

38:48

it attracted a certain type of people. And

38:51

it definitely repelled a certain type of person

38:53

like you spent your career at McKinsey, you

38:55

come in and interview with me, you're probably

38:57

not that interested in working for me. You're

39:00

probably not. And

39:02

that's fine. Now, I think you fall in

39:04

a trap where everyone's similar. But I would

39:06

be surprised if anyone you hired didn't have

39:08

some red flags, everyone who'd be

39:11

hired like well, they've got some strengths

39:13

and weaknesses. Scale ups fall down on

39:15

hiring founders fall down on hiring is you've

39:17

got a panel of people who are interviewing a

39:20

VP from for whatever of

39:22

products. And you've got

39:24

eight people interview them. First candidate,

39:26

Mary gets four out of 10,

39:29

four out of fours and gets four, two

39:31

out of fours. And so

39:33

it's mixed. And then you've got

39:35

Jane, who's got eight, three out

39:37

of fours. You always hire the

39:39

Jane. That's all that's just always

39:41

happens. You always have the Jane. I think

39:43

you're better off with the Mary and you

39:45

want kind of spiky team with some people

39:47

who have great strengths and great weaknesses. And

39:50

you want to spike in different directions. I think

39:52

you want to avoid that lowest common

39:54

denominator type of hiring. I

39:56

always actually say that to LPs. A lot of LPs

39:59

asked me about. manager selection and I say

40:01

like you should invest in the ones where

40:03

it's like they were terrible They never responded

40:05

to an email, but they also had Brian

40:07

saying they transformed my company and I couldn't

40:09

have done it without them That's an a

40:11

manager. I want to get behind. Yeah,

40:13

I get pretty irritated though I do think it's a

40:16

signal that people take three days to respond to your

40:18

email I think that's always better made bread bread five

40:20

for me. Do you think speed of response is a

40:22

feature not a bug? I do. How

40:24

do you manage it though Brian? Okay, this is

40:26

your honor part because I'm not affected at this

40:29

So we were just talking about like reflection and

40:31

I don't do New Year's resolutions But every quarter

40:33

I do a quarterly plan so I kind of

40:35

grew up in sales So I put the Sun

40:37

rises and sets in the quarter for me So

40:39

I just wrote my quarterly plan and I typically

40:41

get about half of my quarterly I've got like

40:43

six or seven items on there And so

40:45

I sit down and do those quarterly plans

40:48

now the tricky part with working with me

40:50

is If something's not on my

40:52

priority list or my quarterly plan It

40:55

could be weeks or months before you get

40:57

an email response for me But if you

40:59

happen to be engaging me on something that's

41:01

on my quarterly plan I'm back to you

41:03

in half a second if I were hiring

41:05

me I would have some red flags on

41:07

that your thing would say about prioritizing Carrie

41:09

is I think too many people run their

41:11

lights through slack and through their email and

41:14

that's everyone else's priority list imposed on you and

41:16

so you're really just spending your whole time working

41:18

on everyone's do you have to do some of

41:20

that for us and People just don't spend enough

41:23

time like well What am I trying to get

41:25

done this month or this quarter? Whatever it is

41:27

and like have their list and like I need

41:29

to make progress on my list today Not just

41:32

be responding to everybody else's emails I think the

41:34

way email and slack and text works is you're

41:36

just very reactive Brian what's on

41:38

your list today? You're not the of

41:40

HubSpot anymore Okay,

41:42

you wanna know yeah my list today or

41:45

this quarter you choose Okay,

41:47

so this quarter I have some things I don't want

41:49

to tell you about on there. I do want

41:51

to get married I've never been married. I don't

41:53

get married this quarter by wanting to marry. Are

41:56

you dating? Yeah Why

42:01

do you want to get married, Brian? I've

42:03

never been married. I'm tired of being

42:05

single and I want a

42:07

life partner. I think it will make me

42:10

happier. A lot of mine are health related.

42:12

So I'm a little obsessed with, like everybody

42:14

who comes to your podcast, obsessed with my

42:16

longevity and Andrew Huberman and all that shit.

42:18

So fair amount of it is health related.

42:20

And what sort of thing? If you don't

42:23

mind. Okay, I'll give you one. I absolutely

42:25

crushed my back last quarter moving a couch.

42:27

It was like I had a knife stuck

42:29

in my back and I don't want

42:31

to do that again. And so I go to PT,

42:33

I'm doing yoga. I'm obsessed out with my back if

42:36

it's much better, but I want my back to be,

42:38

it's like, okay, I think of it as like you're

42:40

redoing a house. You've got the crappiest room in your

42:42

house. You want to go in the crappiest room to

42:44

make your crappiest room, your best room. And same thing

42:47

with your body. Okay. My back is the worst part

42:49

of my body. How do I make the worst part

42:51

of my body to the best part of my body?

42:53

So like that, for example, is on my list this

42:55

quarter. Okay. What else? Okay.

42:57

And prove your back. Okay. I

43:00

don't know if I want to tell you anything. This shit,

43:02

Harry. Then why is the judgment free zone? No,

43:04

I don't know. I can tell you anything. Okay.

43:08

Listen, we do quarterly planning. Do you review them by

43:10

the way? Like, do you mind? Every morning, every morning

43:12

I look at my quarterly thing. I'm like, I'm actually

43:15

working on the important stuff or am I working on

43:17

the big stuff or am I working on the little

43:19

stuff? Am I working on every else's stuff or am

43:21

I working on my own stuff? Do you mind if

43:23

you don't hit them though? Like you said, I'm okay.

43:25

I typically have like a 50% hit rate. Some

43:28

of them are hard. Do you carry them over

43:30

if you don't hit them? I sometimes do it.

43:32

Sometimes I kill them. Sometimes they become habits. So

43:34

some of the things I put on my to-do

43:36

list are habits that I want to perform. So

43:38

last year, a lot of them were about work

43:41

out every day. Now I work out every day.

43:43

It's a habit. I do it every morning. I

43:45

don't have to put it on my goal list

43:47

or eat in a certain way, that kind of

43:49

thing. That's take certain supplements. Some of that is

43:51

all kind of baked in though. I don't think

43:53

people really care about that kind of stuff. Like

43:55

why would someone care about my quarterly plan? Oh,

43:58

they know they am CD. Because if you think everyone. wants

44:00

to be their best selves and everyone wants

44:02

to improve in some way. I

44:04

don't do quarterly planning. It actually be quite

44:07

helpful. I'm pulled in every fucking direction and

44:09

I end up probably misusing a lot of

44:11

my time. Actually every day to go, right,

44:13

this, this and this, that is my job.

44:15

Pretty helpful. It's super helpful actually. Yeah, maybe

44:18

you're right. It's super helpful. I started doing

44:20

it a couple of years ago. It's been

44:22

huge. Also I think people forget this

44:24

with like content and shows, which is like, yes, people

44:26

want strategy and theory, but they also want who you

44:28

are. You know, I think this is why shows

44:30

with venture capitalists are very difficult because you know, the

44:33

venture capitalists don't even know who they are. So it's

44:35

difficult for them to say it on a show. Does

44:38

anyone really know who they are? No,

44:41

but you can pay $300 an hour and your

44:44

therapist will tell you if you're me. Can I

44:46

ask on the talent side though, the thing that

44:48

I struggle with is actually letting people go as

44:50

well. I mentioned I'm going to be direct. It

44:52

sucks letting people go. What's been your biggest lessons

44:55

on how to let people go the right way?

44:58

The most frequent reason I let

45:00

someone go in the most common

45:02

failure condition is I kind

45:05

of think of this equation of

45:07

are people solving for themselves for

45:10

their team or for the enterprise

45:12

in the failure condition for people scaling

45:14

up in their careers, your VP, first

45:17

time VP or whatever it is. They

45:19

don't solve for themselves. Almost never do they

45:21

solve for themselves. They're solving for their team

45:24

and they're optimizing for their team. And while

45:26

they're optimizing for their team, well, by the

45:28

way, they're sub optimizing for their neighbors team.

45:30

That's the number one failure condition where

45:33

as we're scaling up a VP or

45:35

a director, whoever just isn't doing well

45:37

and their team's giving them feedback. They're

45:39

not doing well. Their peers are giving

45:42

them feedback. That's the failure condition solving

45:44

for their team over the enterprise. Solving

45:47

for their team over the enterprise. Do you think

45:49

they know that they're doing that? They

45:52

definitely get feedback on it. Another thing I

45:54

would say, this is a little depressing, but

45:56

we do net promoter surveys for the whole

45:58

company. We've been doing this for maybe 15

46:00

years where once a quarter we asked every

46:02

employee scale went to 10 how likely your

46:04

for HubSpot is a place to work and

46:06

then why people write novels on that too.

46:09

And we track it and then we track it

46:11

by department and the scores move around by departments.

46:13

They can move around a lot. And so let's

46:15

just say you've got a VP of marketing and

46:17

their net promoter score for marketing is like 55,

46:19

65, 58, 59, then boom 30 and some feedback

46:21

on that VP. And

46:26

so we package all that up. We give

46:28

feedback to the VP, oh you're solving for

46:31

the team over the umpike, blah, blah, blah,

46:33

blah, blah, and they work on it. What

46:35

I found and it's a little depressing is

46:37

you put somebody on a recovery plan. More

46:40

often than not they don't recover and we end

46:42

up parting ways to that person. Once

46:44

they've lost their team, they almost never can

46:46

get that team back. Do you

46:48

agree when there's doubt, there's no doubt? Matt Levchin

46:50

told me that. I don't actually know what you

46:52

mean by that. When you doubt someone's abilities

46:55

do a job, there's no doubt that you

46:57

should let them go. Never

46:59

before have you been like, gosh, I really don't

47:01

think Brian's got it. And then

47:03

actually you were wrong and Brian has it

47:06

and he surprises you massively in a year's

47:08

time. Yeah, I've been wrong. But generally that

47:10

process of having the whole organization weigh it

47:12

on it. Like me individually, I've been wrong.

47:14

The organization's usually right. Do you have any

47:17

tips on actually how to do it? Like

47:19

the words that you use in terms of

47:22

letting people go. The words that you use,

47:24

the settings, you have other people in the

47:26

room. And not to

47:28

say, do it live, not on Zoom.

47:30

Don't have anyone else in the room.

47:32

Be empathetic, be fast. If

47:34

it's a surprise, it's your fault.

47:37

You mentioned the MPS there. HubSpot

47:39

has always hailed. And I've listened to certain, like

47:42

you've done shows before. I've listened to all of

47:44

them, by the way. And people often ask about

47:46

like, what was HubSpot's magic about the culture? And

47:48

kind of the fourth time I was like, God,

47:50

I wish someone would ask, when did it go

47:53

wrong? And what did you learn

47:55

from it going wrong? There's always a time

47:57

in the company where it breaks. around

48:00

100 people. What happened and what were the

48:02

signs? I think it always breaks it 100

48:04

people. If 100 people you go

48:07

from knowing everyone in the organization, knowing

48:09

a bit about their background, you interviewed

48:11

everyone to gosh, you

48:13

just don't know some of the people. It

48:16

goes from very flat, like there's

48:18

no layers or there's one layer to like,

48:20

there's two layers in there, or two layers

48:23

of management in there. It starts

48:25

slightly to go from everyone's

48:27

missionary to there's some mercenaries.

48:30

There's something about 100 ish people, 150 people,

48:34

but most CEOs I talk to something kind

48:36

of changes in there. And we started getting

48:38

very serious about culture around that time. It

48:40

was, it was shaky in there. And then

48:42

we started getting quite serious about writing down

48:44

what our culture is, trying to

48:47

embed that in our interviewing processes, tracking

48:49

it with net promoter scores, being very

48:51

transparent about what those scores are, what

48:53

PP back is working on all that

48:55

stuff. We got very serious about culture

48:57

and over index on it for many,

48:59

many years. I think we

49:01

got quite good at it. Brian, a mercenary

49:04

is bad. If they're pointed in the same

49:06

direction, it's okay. I think most

49:08

of your employees are mercenaries post 20 employees,

49:11

largely mercenaries. And I think it's fine.

49:13

I think missionary and companies have unfair

49:15

advantages in that they're able to track

49:18

better talent, retain better talent. I

49:20

think people today have lots and lots

49:22

of opportunities like the unemployment rates are

49:25

quite low. Generally speaking, very talented people

49:27

have lots of opportunities. Humans

49:29

are quite mission driven these days. I mean

49:31

this in the nicest way that you think

49:34

so. Like if we think about hubs or

49:36

empowering SMBs to do more creating opportunities and

49:38

jobs, respectfully, as the 7000, how many people

49:42

are like, yes, I'm empowering

49:44

SMBs today. So first

49:46

of all, our mission is is enabling millions to

49:49

grow better. And so not grow in a crappy

49:51

way like creating spam and cold calling and advertising

49:53

of people. But like how do you market and

49:55

sell in a really match the way you market

49:57

and sell with the way humans actually

49:59

want that? to happen. And so I

50:01

like our mission, really like

50:03

our mission, and I personally motivated by it.

50:05

And I think some of percentage of the

50:07

employees are, but like, are all of them?

50:10

Definitely not. And it's okay, you know,

50:12

that's okay. I do think a decent

50:14

percentage of more. I don't think though,

50:17

like, okay, let's say 7000 employees at

50:19

x percent are very motivated by the

50:21

mission. Let's say we're at 70,000 employees,

50:23

is that 7x? I doubt it.

50:26

How do you think Vallejo will only

50:28

hire A-style players? I'm like, when you

50:30

get to 7000 people, by very nature

50:32

of A-style, you can't have that many

50:34

A-style, you just inherently have to have

50:36

B and C team players at that

50:38

stage. Is that fair, or am I

50:40

being unfair? I think these sneak in,

50:42

you got to keep the C's out.

50:44

And I think companies need to have

50:46

good review processes and good feedback and

50:49

let them move people out if they

50:51

miss the hire. And I think companies

50:53

do that. And speaking of people around

50:55

you, Sequoia obviously led around. Can you

50:57

talk to me about how Sequoia came into the

50:59

fray and what that looked like? Sure. Sequoia was

51:01

a big help to us by the way. So

51:03

we're a Boston based company and Boston based company

51:05

is like, no one gave us a hoot. I

51:07

mean, we would go out to the west coast

51:10

and raise money. I remember the fundraising trips were

51:12

Darmesh and I, we'd get on the plane, we're

51:14

all fired up, like we got this, we got

51:16

20 meetings in Sandhill Road, up and down Sandhill

51:18

Road. And then I remember getting on the plane

51:20

on the way back, we're both just

51:24

get crushed up and down Sandhill Road.

51:26

In this one particular trip, we had

51:28

like whatever, 17 meetings

51:30

with VCs and got 17 nosero. Our

51:33

last meeting was a guy named Jim Getz.

51:35

Jim Getz is kind of a legendary VC

51:37

at Sequoia. So remembers Darmesh wasn't with me

51:39

this time sitting in the conference room. And

51:42

I was nervous. You know, Sequoia, it's like the

51:44

center of capitalism, sweaty palms sitting there waiting. Jim's

51:46

kind of a legend. And Jim walks in and

51:48

as I'm shaking his hand, like my hand is

51:50

moving up and down like this. He says

51:53

to me, Hey, Brian, what's it gonna

51:55

take for Sequoia to own a piece of HubSpot?

51:57

And I said, really, not much. You mean to

52:00

terms, you know, ready to go. I had no

52:02

other options. And

52:05

so Jim kind of shook my hand, we spent a

52:07

bunch of time with Jim, and then he handed me

52:09

off to an up and coming partner named Pat Grady,

52:11

who I think you know. And I

52:13

thought we would have a term sheet and

52:15

would be done in a week. And Pat

52:17

spent the next three months

52:19

going through unit economics, and through just

52:22

every line of every spreadsheet. And I'll

52:24

tell you one funny story about Pat.

52:26

You know, we're in Boston, and he

52:29

wanted to talk about how we calculated

52:31

CAC or something. By the way, during the

52:33

time he dug through all that, he figured

52:35

out we were calculating unit economics wrong. And

52:37

he got our heads straight or a pricing model,

52:39

he fixed a bunch of stuff during that. And I

52:42

thought Pat was going to say no, as he

52:44

went through all this. But my Pat Grady story is,

52:46

and I think it was part of why it's

52:48

quite successful, is he texted me and he said, hey,

52:50

you got time tomorrow at 10. And I said, no,

52:52

I'm tied up at 10. How about

52:54

11? He was like, no, I can't do 11. He

52:57

said, how about nine year time? So I can't do

52:59

that. He said, how about seven year time?

53:01

And I said, well, usually just

53:03

waking up, but sure. And then

53:06

I thought about it. Four o'clock in the morning

53:08

his time. I was like,

53:10

Pat, do you have a life? Anyway,

53:12

we had that meeting. Pat was incredibly

53:15

helpful in school. It was incredibly helpful sort of

53:17

rethink your pricing model or unit economics and really

53:19

got us on the good path. They're really good.

53:21

But that was the process with Sequoia. Handshake

53:24

with Geth really was engaged.

53:26

Pat dragged us through the mud, eventually

53:28

got to yes, and then we did

53:30

the deal. To what extent do you think Sequoia

53:32

is a needle moving event when they invest in

53:34

your company? You know, a lot of people say

53:36

like, oh, it's really all down to the founder.

53:38

I mean, at the end of the day, cash

53:40

is cash. And sure, it helps a little bit

53:42

with brand, but whatever. Or is it

53:45

actually no, it really is a seismic help.

53:47

For us, it was huge. It was needle

53:49

moving. It was one of the biggest needle

53:51

movers. It was the brand was huge for

53:54

us. They helped us with

53:56

our business model a lot. Pricing

53:58

model two, their network. They

54:00

do something or they did something cool back

54:03

then they called the sunrise tour So once

54:05

they make the investment they invite the leadership

54:07

team to come Just meet every

54:09

one of this koi community all the right people at

54:11

LinkedIn at Google it you name it And

54:13

so like BAM your network gets three times

54:15

bigger when they become an investor. They were

54:17

kind of huge for us I

54:19

love that part though. I always do cools with him We had

54:22

him have like a monthly call and it's always at like 5

54:24

a.m And he's already done a

54:26

workout and I'm like yep The fuck is

54:28

wrong with machines? I think they

54:30

all are by the way is that what you think

54:32

makes them successful you've worked with them for years now

54:34

What if you were to say what made some success

54:37

are you an LP in them? I know I am

54:39

yeah So we both know what

54:41

do you think makes them successful? Okay, know them

54:43

quite well I think there's a network effect in

54:45

the venture business of course so they have an

54:48

unfair advantage in that They did

54:50

LinkedIn they did Apple they did all these

54:52

companies So they have that network and they

54:54

have all that knowledge and they have that

54:56

brand in some industries brands more valuable And

54:58

others is very valuable in venture. So that

55:00

of course is given where I think they're

55:02

special is They don't

55:04

take any of that for granted So there's

55:06

a whole new crew over there that runs

55:08

it pat and real off and they're paranoid

55:10

They don't want to lose that mantle They

55:13

know they have something fantastic that more it's

55:15

in the rest of the kid duck Leoni

55:17

gave them and they work much harder than

55:19

any Other VCs have come across and

55:21

they're absolutely paranoid that they're going to

55:23

lose it There's something in their genetic

55:25

code where I think this works for

55:27

them But they can be depressing if

55:29

this is in your company. They don't

55:32

celebrate their successes They beat themselves up

55:34

for their failures Really beat themselves

55:36

up for the failures and I think they

55:38

kind of dwell on their failures and they

55:40

don't want to repeat those failures I think

55:42

there's something in the culture there that will

55:44

sustain that competitive advantage at least through this

55:46

generation It's very that the current crew is

55:48

really good. I think the current crew

55:50

is fantastic I agree with

55:52

you also on the work hard. I've never seen

55:54

a thick like it Can I ask another slightly

55:57

personal one, but I had this a coil ball

55:59

some stock off you and it

56:01

was one of the most costly mistakes you

56:03

made bluntly. Can you take me to that?

56:05

Why are you sold and just the decision

56:07

making for you then? Yeah, it was our

56:10

Series D. It was, I forget how much

56:12

they invested, 40 million, 250 million valuation.

56:16

Like I said, if they didn't do it, all 17 other

56:18

VCs had said no. And so we were

56:21

very grateful they did it. Okay, it was

56:23

a complicated route because salesforce.com invested and Google

56:25

invested. This is before they had like big

56:27

venture arms. So there just wasn't a lot

56:29

of room in there. And they came up

56:31

with the, I thought a clever solution, which was

56:34

we'll buy some of the ZEC team and founder

56:36

shares, which is very common today, of course buying

56:38

secondary. It wasn't back then. And

56:40

so they bought it. And if you think about that, I

56:42

sold some shares at a $250 million valuation.

56:44

Now the company's worth a hundred times that.

56:47

But I would also say I don't regret

56:49

it. At the time, I don't know how much

56:52

it was, call it a million dollars. But

56:54

when I did to my current net worth, it

56:57

was very much a life changing. And so people

56:59

think about the time value of money, the time value

57:01

of money. And they think about, okay, you have 10% return.

57:03

That's not how I think about it. Like

57:06

a million dollars then was so much more

57:08

valuable to me than today, let's say. And

57:10

so it was very valuable to me. It

57:12

was very valuable to Sequoia and they was

57:14

smart of them because they were nervous we

57:16

were going to sell to salesforce.com. salesforce.com made

57:18

an investment. They were not thrilled about that

57:21

idea at the time because they're a worried

57:23

Salesforce would come in and buy us it,

57:25

whatever it at 2X and you know, Sequoia

57:27

wants to make it that. And

57:29

so they come up with that clever solution. I think it worked for

57:31

them because it gave us a backbone. It moved our

57:33

Verizon from like two years out to like 20

57:35

years out and really let us play it for the

57:38

long term and have a strong backbone if someone did

57:40

come in and want to acquire it. It

57:42

worked for both of us. What advice would

57:44

you have for founders who are considering selling

57:47

some secondaries? I would do it for exactly

57:49

those reasons. It's going to give you a

57:51

little personal cushion, which is useful. It aligns

57:54

your incentives with your venture capital investors. We

57:56

never built HubSpot to sell it. Like we

57:58

could have easily built HubSpot. on top

58:00

of the Salesforce platform back then, and we

58:02

would have probably grown faster. We decided to

58:04

build it separately and kind of integrate in,

58:06

which made it less convenient, but we always

58:08

thought we'll build a standalone company that will

58:10

last for many decades. What was the

58:13

most tempting opportunity to sell? I'm sure

58:15

there were many. There weren't. There

58:18

really weren't. We had very, very, very

58:20

little interest. We've never had like an

58:22

offer. We had very, very little interest

58:25

in acquiring. By the way, that surprised

58:27

me. I just assumed people would be

58:29

knocking our door down back in the

58:31

day, almost no interest. We mentioned Pat.

58:34

We mentioned our love for Pat. I

58:36

definitely have an insecurity, and people throw

58:38

shit at me on Twitter, Brian, for

58:40

commenting on operations without actually having

58:43

had a career as an operator. I vehemently

58:45

argue back. I'm building a media company. We

58:47

have many people in the media company. It

58:49

does millions in revenue. To me, it

58:51

is building a company. Whatever that is, you

58:54

said before about the importance of investors that

58:56

have been former CEOs and former operators. Why

58:58

do you think it's so important that your

59:01

VC has been a former operator or CEO?

59:03

Can you just take me to that

59:05

thinking? Okay, I remember when we were starting

59:07

up Spot, we wanted VCs who had been

59:10

CEOs. And by the way, most startups don't

59:12

have a choice of like 20 term sheets.

59:14

We certainly didn't. If we had the option

59:16

of having a VC who was a CEO

59:19

before, that was, we would go with that.

59:21

It was a plus, if the terms were

59:23

the same. And our A and our B

59:25

were VCs who had been CEOs before. Pat

59:28

had not, and he did the D, and

59:31

he had an observer seat. And I

59:33

would say Pat was relatively quiet, but

59:35

Pat figured out ways to add value

59:37

that were super useful around benchmarking relative

59:39

to every other tech company in the

59:42

world, network with every other

59:44

tech company in the world, and really

59:46

geeking out early on unit economics for

59:48

SaaS companies. So he found ways to

59:50

add value where he didn't stick his

59:52

nose into operational details per se. So

59:54

I think both can work. I think

59:57

the reality is there's very few VCs

59:59

today who. are been there

1:00:01

down that CEOs who have built big

1:00:03

companies. There's very, very few of them.

1:00:05

I don't think you can have that

1:00:07

criteria anymore. And I actually don't think

1:00:10

it matters. And so let me just

1:00:12

unpack that. If you were a CEO

1:00:14

before COVID, very different approach to work,

1:00:16

different generational thought process around what motivates

1:00:18

them. Pre-AI, very different. Pre-cloud, very different.

1:00:21

What it takes to be great is

1:00:23

so different. You can playbook and templatize

1:00:25

it. It's fucking different. Doesn't matter. And

1:00:27

so actually, are they a good source

1:00:30

of cash? Are they supportive and won't

1:00:32

throw you off a board when it's

1:00:34

a shit quarter? And do you like

1:00:36

working with them? Well, I think it's

1:00:38

important if your VCs haven't built the

1:00:40

companies before or their pattern matching is

1:00:43

light, they're new. Having a great

1:00:45

independent is worth its weight in gold. So when

1:00:47

we were early, we had two founders on the

1:00:49

board. We had two VCs on the board. Our

1:00:51

first independent was a woman named Gail Goodman that

1:00:53

people wouldn't have heard of. She was the CEO

1:00:55

of Constant Contact, which at the time was a

1:00:57

real high flyer. And she had real operating experience

1:01:00

that was relevant, timely, she was a couple years

1:01:02

up the Isecluse premise. And the thing she

1:01:04

had that was useful is that the VCs would

1:01:06

get on me, like really grinding me about something,

1:01:08

not growing fast enough, whatever it would be. From

1:01:11

time to time, if they were being too aggressive

1:01:13

of me, she would sort of back them

1:01:15

up. They were a little bit intimidated by her.

1:01:18

And that was very, very helpful. She

1:01:20

gave us great operational stuff.

1:01:22

So having other people in the room

1:01:24

who have seen the movie is useful.

1:01:26

And I would push back a little.

1:01:28

Yes, everything is different post-COVID. Yes, everything

1:01:30

is different post-AI. But

1:01:32

building a team, raising money, how

1:01:35

do you build a category? How

1:01:37

do you build a go-to-market machine?

1:01:39

Like all of that, that transcends

1:01:41

across from the frigging 1990s to

1:01:43

today, so much of it. So

1:01:45

I don't think things are totally

1:01:47

different from pre-COVID to COVID. I

1:01:49

don't think things are totally different

1:01:51

from pre-AI to AI. Do you think

1:01:53

the VC product is good today, Brian? I think

1:01:55

it is. I mean, at the end of the

1:01:58

day, they're selling a product to their LP. The

1:02:00

customer is kind of the LP actually. 5%

1:02:03

of the VCs are incredibly successful in 90%

1:02:06

or meh. Very

1:02:08

few are really successful, but they're so successful

1:02:10

that the category writ large does pretty well.

1:02:13

So from that perspective, I think it's a

1:02:15

good category. I continue to invest in it.

1:02:17

If you look at it though, the small

1:02:19

VCs are the ones where the alpha is,

1:02:21

not the big ones. And VCs, this tendency

1:02:23

to get bigger. But in terms of the

1:02:25

offering to their other customer, the founders, when

1:02:27

we did our Series A, it was a

1:02:29

$5 million round on a $6

1:02:31

million pre-money valuation. So we sold

1:02:33

47% of our company in Series A. That

1:02:36

was standard, Harry. Where was the business at

1:02:38

then? Yeah, half a million dollars of revenue

1:02:40

growing fast or maybe even a million. It

1:02:42

was doing alright. You know, it was in

1:02:44

a whole new category that no one really

1:02:46

understood. Like who did that deal? General Callis.

1:02:49

They killed it. $5 million at $6 million.

1:02:51

Yeah, we had three term sheets and they're

1:02:53

all right around there. I'm not surprised you

1:02:55

had three term sheets. Yeah. I

1:02:58

know we've had a bubble in 2021 and

1:03:00

whatnot and it's popped. But even today, you're

1:03:02

doing a Series A. The product is much

1:03:04

better. You're raising $5 million on a 40.

1:03:07

You're not diluting 40% on your round. Do

1:03:11

you think venture is broken though, in the

1:03:13

way that you are incentivized to scale? A

1:03:15

lot of firms are adalering and asset managers.

1:03:18

And we've moved, as Doug Leone says,

1:03:20

from a high margin boutique business

1:03:22

to a low margin, highly commoditized

1:03:24

industry. I do, I think, this

1:03:26

tendency to grow the AOM because

1:03:28

you get management fees on the

1:03:30

AOM and limb off those management

1:03:32

fees and there's such a long

1:03:35

timeline on where the returns are

1:03:37

coming in. I think it's just

1:03:39

incredibly tempting to general partners and

1:03:41

venture firms and that's led to,

1:03:43

there's too many firms, there's too

1:03:45

much money. Let's say we're going to

1:03:48

start a venture capital firm in tech right now. Oh

1:03:50

my goodness, you better have a good angle on

1:03:52

it because it's so hard to compete. How did

1:03:54

you think about that? You're investing now.

1:03:56

I have an angle. I founded at $25

1:03:58

billion. It's a

1:04:01

pretty good angle. I

1:04:03

don't even think that's enough on the angle. Like if I were

1:04:05

to go in and try to compete with Andreessen Squay over all

1:04:07

those folks, I don't think that's a

1:04:09

good enough angle. My angle is I started

1:04:11

a climate fund investing in ocean startups. And

1:04:14

the reason I did that is because the

1:04:16

ocean is absorbing much of the carbon dioxide

1:04:18

today and it can absorb, if you're careful

1:04:20

with it, much, much more. And there wasn't

1:04:22

like a real ocean climate fund out there

1:04:25

and I wanted to have an impact. I'm

1:04:27

like, that's worrying and that's spent my money.

1:04:29

And so we've become like a magnet. If

1:04:31

anyone's got an ocean tech startup, you know,

1:04:34

they come to us. Final one

1:04:36

before we do a quick fire. You mentioned like

1:04:38

17 VC meetings, 17 no's. What

1:04:41

was the worst VC meeting you had?

1:04:43

It's with a firm here in Boston,

1:04:45

a storied firm. It had a storied

1:04:47

founder. We had pitched one of the

1:04:49

partners several times, Guy Jeffrey, and he

1:04:51

was interested. So we came in for

1:04:53

the full partner pitch. And the founding

1:04:55

partner was a little rough. Anyway, he

1:04:57

sat next to me. I hadn't met

1:04:59

him. He's kind of a legend. And

1:05:01

I've done a lot of venture pitches.

1:05:03

I had it down. Let's just

1:05:05

say I'm lively in the pitch. And he fell

1:05:07

asleep. He fell fucking sound asleep

1:05:10

during my pitch. And

1:05:14

they sat next to him and I kind of not just

1:05:16

share, woke him up. And so we finished the pitch and

1:05:18

I remember Garamash and I were looking at each other well.

1:05:21

I guess we're not going to turn them cheap. And

1:05:23

then ironically, they went away and came back and gave us

1:05:25

a term sheet. That's strange.

1:05:28

And then we got the term sheet, Harry. It

1:05:30

came through faxes a long time ago and we

1:05:33

got it. And I quickly looked at it. I

1:05:35

was like, oh, look, he sent it to my

1:05:37

lawyer. And within five minutes, my lawyer called me,

1:05:39

which is unusual. And he said, I

1:05:41

saw the term sheet. And I was like, yeah, how does it look?

1:05:43

He's like, did you see the pool? And I

1:05:45

said, I didn't really take a look.

1:05:47

Remind me what the pool is again.

1:05:49

It was their series A.

1:05:51

He said, oh, yeah. What's the amount you're holding aside

1:05:54

to hire people? He said, did you see the size

1:05:56

of it? I said, no. He said, it's 22%.

1:06:00

okay, is that normal? He said

1:06:02

seven or eight is normal. 22

1:06:05

is a lot. He said why don't you call him and

1:06:07

ask him about that. I got the phone call Jeffrey and

1:06:09

I said thank you, by the way thank you for the

1:06:11

term, she very surprised we got it after the room

1:06:14

fell asleep but thank you. Just out

1:06:16

of curiosity, why is there such a

1:06:19

large pool? He said well just in

1:06:21

case we need to replace the CEO. I was like I'm

1:06:23

the CEO. When

1:06:25

were you gonna tell me that you were planning on replacing

1:06:27

me? He's like well there hasn't been a good time up

1:06:29

until now but why don't we talk about it. So that

1:06:31

was sort of a bad experience. They

1:06:33

found her falling asleep and

1:06:35

yeah they want to replace me. And so you said

1:06:37

where's the doggy sign? When do we

1:06:39

start? I've been

1:06:41

wanting to get out of this since the start. Oh

1:06:44

listen I want to do a quick fire. I've so

1:06:46

enjoyed this but I'm gonna say a statement you're gonna

1:06:48

give me your immediate thoughts does that sound okay? That

1:06:50

sounds fabulous. Okay MBAs are ridiculed today.

1:06:52

Do you still think they're worth it?

1:06:55

Okay I'm gonna give you a snobby

1:06:57

answer. I got three things from my

1:06:59

MBA. I got a lot of knowledge.

1:07:01

I had a great network including a

1:07:04

co-founder and all our angel investors and

1:07:06

I got some pedigree. The truth about

1:07:09

an MBA is you can

1:07:11

get the knowledge from any MBA. It's the

1:07:13

same stuff they teach at every MBA program.

1:07:15

You can even get it online now. You

1:07:17

only get the pedigree in the network from

1:07:19

top tier MBA programs. So I

1:07:21

think it's worth it if you go

1:07:24

to a top tier MBA program. I

1:07:26

would also say I don't

1:07:28

think MBA programs are breeding grounds

1:07:30

for founders. It's a relatively like

1:07:32

if you're doing the decision tree

1:07:34

on your career and you decide

1:07:37

to do an MBA it's a

1:07:39

pretty risk-averse move. It's not a

1:07:41

risk-seeking type of a move. And

1:07:43

so I don't think MBA programs

1:07:45

are breeding grounds for great entrepreneurs

1:07:47

necessarily. Speaking of breeding grounds for

1:07:49

great entrepreneurs, are people

1:07:51

born CEOs? No I

1:07:54

don't think so. I think I learned a lot about

1:07:56

being a CEO from those three other CEOs I work

1:07:58

for. I learned a lot about being a

1:08:01

CEO at Sloan because they brought so

1:08:03

many in to do fireside chats and

1:08:05

whatnot. And I think even as a

1:08:07

CEO, I've gotten, I wouldn't say even

1:08:10

better, just like evolved with the company

1:08:12

over time and improved. I think it's

1:08:14

a crap, just like products crap. What

1:08:16

was the most poignant near-death experience for

1:08:19

HubSpot when you reflect back through the

1:08:21

journey? We started in

1:08:23

2006. 2009, it was the rate

1:08:25

in the teeth of the recession.

1:08:27

Our retention rate was really,

1:08:30

we were losing 7% of our customers

1:08:32

a month. That

1:08:34

was the only time I thought that we're

1:08:36

not going to make it. This is going

1:08:38

to go out of business. I thought that

1:08:40

was, and it was about three or four

1:08:42

months. What did your ambassador say? I mean,

1:08:45

all their companies were going side-based, but we

1:08:47

were going really sideways. I don't remember. I

1:08:49

don't remember what the event, that wasn't, doesn't

1:08:51

stand out to me. I just remember being

1:08:53

in the company talking to customers a lot,

1:08:55

working on that retention, working on the product.

1:08:57

What changed? The economy got better, which helped.

1:09:00

I would say one of the things that

1:09:02

would criticize about HubSpot and myself is

1:09:04

I think oftentimes companies reflect their

1:09:06

CEOs. I grew up in sales

1:09:08

and marketing, and we over-invested in

1:09:10

sales and marketing. We over-invested in

1:09:12

our hockey stick curve. We over-invested

1:09:14

in the process of turning a

1:09:16

prospect into a customer and get

1:09:19

really good at that conversion rate.

1:09:21

We should have over-invested in turning

1:09:23

a customer into a delighted customer.

1:09:25

Through all that, we went from

1:09:27

being a sales-driven culture to much

1:09:29

more of a product-driven culture, from

1:09:31

turning prospects into customer culture, from

1:09:33

two customers into delighted customers. It changed

1:09:35

the culture, changed where we put things

1:09:37

in the P&L. It really changed a

1:09:40

lot. Did Figma kill the M&A market?

1:09:42

It killed part of it, I think.

1:09:44

Let's say you're a scale company and

1:09:46

you're looking to buy a business for

1:09:48

20, 30, 40 million dollars. It's not

1:09:50

just that it might not get approved

1:09:52

like Figma didn't. It's a 15-month cycle

1:09:54

to find out. It used to be

1:09:56

you're doing an acquisition. It's three or

1:09:58

four It's like a good 15 months

1:10:01

to get through the US, get through the UK, get through

1:10:03

the EU. And so all

1:10:05

that time, a lot can change. So I

1:10:07

think you've got to think long and far

1:10:09

before doing a good size acquisition. Having said

1:10:11

that, I think the smaller M&A market is

1:10:14

going to be wide open. Well, I think

1:10:16

to that point, though, like Figma today correlates

1:10:18

to about a $30 billion price

1:10:20

with the appreciation of Adobe's stock price.

1:10:22

If you actually think about that, that's

1:10:24

very disincentivizing for large players given Nasdaq's

1:10:27

rocking, the fact that you could end

1:10:29

up paying double for an asset

1:10:31

that's actually only worth half. I'm

1:10:33

not saying that of Figma, but of any appreciating stock market

1:10:35

price that's the way it would be. That's

1:10:38

not very encouraging. Why will smaller

1:10:40

M&A be wide open? Why

1:10:42

would you bother, Brian? I think a lot of

1:10:44

companies are going to have to sell. They're going

1:10:46

to get stuck. But who's going to buy them?

1:10:48

It's going to get blocked. Private

1:10:50

M&A, private to private. Which board members are

1:10:53

like, oh, yeah, blow up your head count

1:10:55

by requiring another company. I don't think they

1:10:57

get blocked. I think you're doing acquisition under

1:10:59

$10 billion unless it's super strategic. I

1:11:02

don't think it gets a long look from

1:11:04

the regulators. I think those flow through and

1:11:06

they happen pretty quickly. We just bought a

1:11:08

company. It was a couple months. It was

1:11:11

fast. It was $200 million-ish deal. So I

1:11:13

think more of those happen. I think VCs,

1:11:15

I think they'll be very happy to sell

1:11:18

their company to a HubSpot or

1:11:20

Atlassian or Dropbox or you name it,

1:11:22

or even a bigger company. I think

1:11:24

Microsoft can buy companies or Google that

1:11:26

are $5 billion or less. I think

1:11:28

those go through. Why do you think the IPO market

1:11:30

will be wide open? I think it's just

1:11:32

correlated with NASDAQ. There was this weird bump

1:11:34

that happened in Q4 and it's come down

1:11:37

a little bit. NASDAQ's up. You look at

1:11:39

stocks like HubSpot. It was running along kind

1:11:41

of a normal path. The market cap went

1:11:43

up to $40 billion, back down to $10

1:11:45

billion. It's at $28 billion now. We're not

1:11:48

a NASDAQ for a nurse, actually. But the

1:11:50

tech public valuations are decent. So I think

1:11:52

it's a decent time. If you're Stripe or

1:11:54

any number of companies read it, I think

1:11:56

you get a decent valuation. I get you.

1:11:58

I look at Jeff. Twilio and I'm

1:12:01

like fuck that's a brutal one isn't it?

1:12:03

You're an activist in Dasta. That's a brutal

1:12:05

one and I think people will talk about

1:12:07

that a lot in Twitter and I do

1:12:10

think Jeff is a good CEO but that's

1:12:12

an exception like the number of companies where

1:12:14

there's activists crawling all over them there's a

1:12:16

lot of public tech companies out there it's

1:12:19

not that common. Final one where is Brian

1:12:21

in 10 years time with 20 fuck 2034?

1:12:23

Okay one thing I like to do is

1:12:25

I like to spend

1:12:29

time with founders CEOs startup CEOs don't want

1:12:31

to be scale up CEOs they want to go

1:12:33

through that journey I went through and I like

1:12:35

helping them avoid all of the mistakes I made

1:12:37

on that journey and I do that with my

1:12:39

climate fund I do it with like Sequoia I'll

1:12:42

do that with Sequoia founders and I enjoy it

1:12:44

it's sort of a hobby and I feel like

1:12:46

I'm giving back to that founder and giving back

1:12:48

to the universe a little bit so I want

1:12:50

to do more of that I think it's quite

1:12:52

enjoyable and a good thing for society. Brian this

1:12:54

has been one of my favorite shows to do

1:12:56

I knew this. What do you mean one of?

1:13:00

Pat will always be my

1:13:02

number one. Thank you for

1:13:04

having me on. Dude you've

1:13:06

been fantastic. I

1:13:08

have to say I had really high hopes

1:13:10

for that episode but it really went above

1:13:13

and beyond I think it was one of

1:13:15

the most fun shows that we've ever done

1:13:17

I want to say a huge thank you

1:13:19

to Brian for putting up with me what

1:13:21

a great show you can watch it all

1:13:23

on YouTube by searching for 20VC but before

1:13:25

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I so appreciate the support and stay

1:15:55

tuned. For an absolute banger of an

1:15:58

episode this coming Wednesday.