Brian Halligan: HubSpot

I said, no. Dharmesh culture is how people make decisions when we're not in the room. Culture is how HubSpot's gonna scale. It's unique relative to the competition. It's high quality and adds value. It's like a magnet that pulls in employees and retains them. Completely lost gravity. Went straight down up a cliff and smashed at the bottom. The snowmobile was in about a million little pieces. Confident I was gonna die. Life can be very short and don't waste it, I think, is really the enemy of scale. And so I used to say, whenever we're making an important decision, there should be winners in the room and losers. We shouldn't find, like, that negotiated settlement that everyone's happy. I think consensus is the enemy of greatness. I think what happens as a company scales is you hire for a lack of weakness, not for spiky strengths. And I think that's a mistake. My analogy for being a CEO, it's like you're an ice climber going up the ice, and it's treacherous and you could easily slip. And what you're looking for are executive members who have been up that same sheet of ice. But in the last three or four years. What you don't want is somebody who's.

Brian. I want to start with the role of a CEO and the journey from startup to scale up to public company.

It's a remarkable journey. And I was on that journey for about three years, 17 years. And a couple of years ago, I stepped out of that journey, Shane, in a relatively dramatic way. And you may have heard the story before. I was snowmobiling up in Vermont. I was taking a SnowMobile from Ragewater, Vermont, to Woodstock, Vermont, coming to the hairy part of the trail, and went up over a lip and went down on the other side and just completely lost gravity. Went straight down up a cliff and smashed at the bottom. The snowmobile was in about a million little pieces. I was passed out for a long time. And then I woke up. It was about 4 in the afternoon. It was quite cold, and nobody knew where I was. Was confident I was gonna die. And I sat there for a good hour thinking about, you know, if I do make it through, then what? And I never bring my phone when I saw a bill, because in Vermont, there's no signal. The whole darn state, there's no signal. But an hour in, I'm like, maybe I brought it. It turns out I brought it like a. And I checked it and dialed 91 1. Shane, have you ever dialed 91 1?

I have.

Yeah, it's an amazing service. If that was a startup, I would be thrilled to invest in it. It's amazing. The woman was sort of very, very good. And she said. I remember she said, sit tight. And mind you, I have. I'm a mess. Many, many broken bones. And so I was like, kind of chuckled this. Yeah, I'm not going anywhere. And then she called the two local fire stations and their volunteer and the no in the air. And so then she has to track down the mobile phone numbers of all the firefighters and the. The rescue people, calls them at home, they hop in their snowmobiles and they come and find me. By the time they found me, you know, it's pitch bike, it's really cold out. And basically they went to work on me. I kind of put Humpty Dumpty kind of back together on the side of the mountain, towed me to a flat area, which is a few miles away, helicoptered me to Dartmouth University, and there they really put Humpty Dumpty back together over lots of surgeries, a lot of time. And I remember that because that was the end of my CEO journey. I had been quietly saying to myself that I didn't love being CEO of HubSpot, frustrated with just the core work. And I remember saying to myself, at the bottom of that cliff, I make it out, I'm not coming back. And so I was out of work. A terrific woman took over for me. Funny story about that. While I was gone and as I got back on my feet, everyone just assumed I was coming back. Like, no, no, no, I'm not coming back. You're doing a great job. You got this. And I actually think a lot of CEOs would be a lot happier if they did something similar like that. Not the snowmobile part.

I assumed. Yeah. What went through your head when you sort of couldn't move, you're stuck in the snow and you couldn't contact anybody? Like, what. What are the thoughts that were going through your mind?

I'm not super comfortable telling everyone all my thoughts on this, but a lot of thoughts around, if I make it out of this, somehow someone finds me randomly, what's going to change? But then, I mean, the net net of all of them is life can be very short, very short. You never know what will happen. And don't waste it. Don't waste time doing something that doesn't make sense for you. Refactor your life. And I refactored my personal life and I refactored my professional life pretty dramatically. And these days, I really don't do anything I want to do. And I wanted to do this podcast, a really good podcast.

Thank you. Tell me about what the changes were. Like, were they all at once? Were they slow? Like, be specific about sort of. I always wonder this because I had a. A near death experience too a couple years ago. And I remember pondering life and thinking about, oh man, if this is the end, like, did I spend the time the way that I wanted to? And if it's not the end, like, what is it that I really want to change in life and what impact will that have? And I've done such a better job of sort of taking care of my body and my mind and sort of self care, if you will, just as a big word to encapsulate that. I changed a lot of relationships in my life. I sort of invested in some and then I wouldn't say broke off some, but definitely stopped investing in some. And so I'd love to hear about the specific things that you did that you sort of were like, okay, well this is, this is the realization.

It's exactly like that when I say.

Refactor, like, okay, well, this is, this is the realization.

It's exactly like that when I say refactor. Relations, family relationships. I wouldn't say ended relationships, but I certain people that didn't give me energy in certain ways and just stopped engaging with. And it's a much smaller group I engage with these days professionally. I stopped my main job. I mean, I founded HubSpot 17 years earlier. It was kind of my life and everything was sort of wrapped up in it. And now chairperson. So I'm still mall but not in with day to day. I got obsessed with maybe similar to you with longevity. Like, well, if I'm going to live to 8590, I want to be very strong living to 8590. So basically anything Peter Attia or Andrew Huberman said to do, I did. Except they drink a little. Um, but I basically do everything they do. Lost a lot of weight, got much better shape. And so lots and lots and lots of changes. But I think the macro one was just love your family, tell your mom you love her, hug your kids one more time today and don't waste time. You know, do things that really are rewarding to you.

One of the big things for me was like just being home for the kids every day after school. I just made a commitment. I was like, I'm going to be here every day when they get home. I'm not going to push it at the office. A little longer. I'll find other ways to do that because I'm also sort of balancing ambition and all this other stuff. But it wasn't going to come at the expense of the time with them that I know inevitably, I'll look back on and be like, man, I just wish for a little bit more cookies.

And milk, they say the dying wish of every man, and they just want another day. And I think about that a lot. Like, what am I going to wish I had found at the end of my life? So, Sheen, while we're on this, why don't you tell us what happened to you?

I didn't know for a long time what was happening to me. I just had symptoms, and they kept getting worse and worse and worse. And so, like, I had a fever, then I had an earache. And this was during COVID so everybody thought it was Covid. So I went to the doctor, and they were like, oh, you don't have an ear infection. You're fine. You don't have Covid. Go home. Suck it up. And then I woke up on a Saturday, and I remember just making a latte, and then I was drinking it, and it spilled down my chest, okay. And I was like, what the heck? I've been drinking out of cups. And so it's like two. You know, rarely do I spill something. And I went. And I went to the bathroom, and I looked in the mirror, and the left side of my face was 100% paralyzed. And so I had no movement whatsoever. I felt like I was moving things. But, like, if I raise my eyebrows, like, you can see now on YouTube, if I raise my eyebrows, this. It was actually kind of beautiful in hindsight. It was freaky when it was happening because this. And it just didn't move. And I was like, oh, God, like, I gotta go to the doctor. My first thought was actually not to go to the hospital, which is a little weird. So I show up at my former family doctor's office on the weekend, and they're like, you need an appointment. It's Saturday. And I was like, well, I can't move my face. So I think that qualifies as, like, maybe I get an appointment today. And she's like, oh, my God, yes, you see the doctor right away. I go into the doctor, and she's like, I think you're having a heart attack. And I was like, well, this doesn't make a ton of sense, right? Like, maybe. I don't think that's the case. However, you're the doctor. I don't know what I'm talking about. And she's like, you need to drive to the hospital. I was like, well, if you think I'm having a heart attack, why are you telling me to drive to the hospital?

Yeah.

I was like, these two things don't align anyway. I go to the hospital, I see a doctor right away. I mean, for all of the knocks on Canada's health care system, there's certain things in triage that they, they definitely see. I saw a doctor probably within three minutes of getting to the hospital. And you know, he's like, you're not having a heart attack. I was like, thanks. And then it's like, go sit and wait for like 12 hours while we handle all the other urgent people, which is fine. And so he sees me and he's like, I'm going to give you some prednisone and you'll be fine. And I remember going like, wait, what? Like you're just gonna give me some steroids and like, send me home? Like, nobody cares about how this happened. I'm a healthy at the time, 42 year old male. I'm not overweight. You know, I don't smoke, I don't excessively drink. I have nothing that would sort of indicate this. When I was in the waiting room for the 12 hours, I started talking to a whole bunch of neurologist friends and they were like, you should get tested for these four things. And it was like hiv, Lyme disease, mono and something else. And I was like, can I just get a requisition to get tested for this? And he's like, no, it's just like a waste of the medical system.

Oh man.

And I was like, wait, what? Like that doesn't make sense. He's like, go talk to your family doctor. They'll, they'll figure that out. I gotta go help other patients.

Watch your face at this point.

Well, it's still paralyzed, right? So he's like, you're going to recover. He's like, you have a 99.8% chance of recovery. And I'm like, I'm not worried about recovery. I'm worried about what caused this. Right? Like before we figure out the future, we have to figure out like, what am I doing something I need to stop. And I went to my doctor on Monday and I was like, hey, can I get a requisition for these blood tests? Which in, in the States you just show up and do it. And in some provinces in Canada you can just show up and do it too. But in Ontario, Where I live, they won't allow you to do that. You need a requisition. Anyways, she says no, for whatever reason. She's like, if the ER doctor thought you needed it, he would have given it to you. You know, please, please, off politely is sort of what she said. And I was like, well, this is so weird. And I'm like, thinking about this, and then I wake up a few days later, and I can't stand.

Oh, man.

So the backs of my knees, like, if I'm moving, I'm fine, but if I stand still for, like, 10 seconds, I'm literally crying. There's tears coming out of my face. I've never been in so much pain. It's like somebody stabbed the back of my legs with a knife. And I was like, whoa, this is, like, so crazy enough, like, emailing my doctor again. I'm like, I really think I should get tested for a whole bunch of stuff at this point. Like, I don't know what's happening. And she's like, slow. Knowing me, she's like, it'll get better. Just give it some time. And then, like, three or four days later, I wake up and I can't open my mouth. Like, I have a lockjaw, basically. I can open it like a centimeter. And luckily, to cut a long story short, I end up talking to a close friend of mine who happens to be an eye surgeon. She's like, I'll give you the requisitions. She gives me the requisitions. I test positive for Lyme disease. I start the treatment for Lyme disease, because when you test positive, you can actually. You can fix it. And so I start taking. I think it's doxycycline, the antibiotic, which is the treatment for that, and instant improvement. The cool part of this is I saw a neurologist in Ottawa who tested me for, like, 200 different things. You know, I went down to give blood, and the lady's like, this is the maximum amount of blood we're allowed to take out of you. I was like, oh, this does not sound really good. And I came back completely normal, aside from the Lyme disease. So I'm glad we caught it, glad we solved it, you know, made a. Made a lot of changes after that. I want to go back to you and HubSpot, though. So, like, you've been on this journey for a long time, from startup all the way to scale up to now public company, sort of chairman. Walk me through the different phases a CEO goes through.

I personally break them out like two to 20 employees, 20 to 200, 200 to 2000 and then 2000 plus. And I kind of grade myself in these seasons. Like I give myself a B in 2 to 20, like 2 to 20. I was doing customer development. I was the lead user of the product, I was marketing it, but I'm a crappy coder. And so the heavy lifting was really done by my co founder. 20 to 200. I was kind of in my element. I loved it. I was an A 200 to 2000, maybe a B, and then 2000 to 8000, maybe D. I really didn't like the work. And I think that's the case with a lot of CEOs and a lot of executives. A lot of people, like, people have a season that they enjoy and they get good at it. I think that's very much the case.

For me, which was the one where you felt like you had to grow the most to fulfill the role.

Really through the whole thing. I felt under qualified to do it. And I don't know about you, but I still have imposter syndrome here on the podcast. And I had it throughout. I think one of my superpowers actually is I'm a learner and I try to get better and I listen to other people and I take feedback pretty well. And we had a mechanism that was quite good for giving me feedback. Really good, actually. My co founder was responsible for my annual 360 review. He's super introverted, so he didn't want to go around and talk to other people. So he sent a Net promoter survey out to the board, the execs, customers, a whole bunch of people, 30 different people. He got a lot of responses, maybe 25 responses. And there were two questions, Shane. One was, on a scale of one to 10, how likely we refer Brian as CEO of HubSpot? And two, why did you give that answer? And people wrote novels about it. And it's hard for CEOs to get feedback. Very hard. Very few people give straight feedback to the CEO. So this was a good way to get. The end was big enough that people gave very, very strong feedback. And he summarized it, giving my Net Promoter score. And then I started reading my review. And each page was different. So the first several pages were my features. And he's a software developer. He's like, here's your features. So page number one, you're very good at explaining HubSpot's vision. And then he pulled out quotes from the novels. People wrote page two, page one through 10 were features. And they were great. And I was pretty confident that I was the best CEO ever invented after reading the first 10 pages.

And then the bugs came.

Page 11 was the bugs, and there were 12 pages of bugs. And I was pretty convinced I was the worst CEO ever invented by the end of the 12 pages. And I remember when I finished it, I'm not a scotch drinker, so I remember I poured a glass of scotch. But that mechanism for getting feedback was, we still use it. So the current CEO gets the same type of a thing and it's very, very, very useful. I think founder CEOs often have this problem that like founder CEOs like to make decisions, like to be involved with the details, like to drive things, like to be in the middle of things. And that's a great strength when you get 10 people. But that great strength you have turns into your greatest weakness when you have a thousand people. You're trying to manage everything, trying to manage everyone, know everything that's going on. And so the consistent feedback was like, how do you get yourself out of the details? How do you stop working in the business? How do you start working on the business? That was kind of a common thread that I worked on across all 17 years.

Was that feedback enough for you to walk away going like, okay, I see this. People are giving me feedback. I accept it. There's some truth to this. Or was there a part of you that was like, no, they're wrong.

It was pretty, pretty accurate. And I shaking my head through most of it. In the software business, sometimes there's something that someone thinks is a bug, but it's a feature to somebody else. So some of my bugs I actually thought were features. Like, I can be really passionate about something and Brian gets so passionate. It's like a little scary. Sometimes I'm like, fine, if like 2 out of 30 of you think that and the rest think it's a good thing, I can live with that. So there were several things I was like, that's a bug that I can live with. And every year I try to work on one or two about the bug. If I put 10 calories and try to improve the feature, I get like a thousand out. And so I more paid attention to the features and tried to get better at the features. And this took me a while to figure this out. And over time just tried to hire people around my weaknesses and I have plenty of them. I really looked at hiring the best I could in the areas where I was weak rather than trying to become an expert at it. And I'LL give you one area where I made a mistake on this. In the early days of HubSpot, I fashioned myself like a great product designer. I don't know why I did. I think basically because I followed Steve Jobs, everything he did. Read every book about him, watched his keynotes, was obsessed with them as CEOs are my era. And I was like, I can do that. I can figure it out. I took classes and I really dug in. And for years I was convinced I was a great product designer. I'm not. I. I just don't have that genetic code I was actually quite bad at. Took a while before that feedback sort of hit me between the eyes. And we started hiring people really good at it and enabling me to let go of it.

What are some of the lessons you took away from your sort of studying of Steve Jobs, if you will, that you used effectively?

One of my favorite things on the Interwebs, it's his keynote at his commencement speech at Stanford. I think it's quite good. And once in a while, I'll look back at that. He was faced with cancer, and the way he approached that was really interesting. And he says it in a different way, but he didn't waste any time, that's for sure. And then HubSpot, a lot is based on his work. We started the company out of Sloan while we were in business school. And at Sloan, they did field trips and we did a field trip to the West Coast. And I remember this one day was a really good day. In the morning, we visited Apple. It was like a year after the ipod came out and it was on fire. And I remember Steve walked into the auditoriums about 100 of us, and he was in a bad mood and it was pretty intimidating. And I remember he looked out and he basically was like, what are you people doing here from business school? Like, he wasn't into the whole business school thing. And one of my classmates, JP Gorski, raised his hand up high and he said, we're here from Sloan School of Management and we're studying innovation disruption. And we thought we'd learn from the best. And as Steve just melted, he liked that a lot. And then he talked about how we came up with the ipod and kernels of this very much made it into the way we thought about HubSpot and the ipod. The way he described was really simple. There were MP3 players before, but you had to be a real geek to use one, and very few people were buying them and you had to burn music to them. It's a Pain in the neck to do it. And he said, I really wanted something simple. So I wanted to take an MP3 player, build a freemium app, itunes, and then work with the record companies, enable you to download a song for 99 cents a song. And he said, that's a 1 plus 1 plus 1 equals 10 for the consumer. And that was how we originally came up with HubSpot. Like a marketer in that day and age, putting Google Analytics and, and a blog and social media tracking tools and SEO tools and marketing automation, CRM and all this stuff. And it was complicated. It was big hairy problem. And so we used that analogy very much that Steve used. Like, how do we make an all one system where the one plus one plus one will equal 10 across all the systems? So the morning was really influential. And then that afternoon, and we're kids, we're in business school, we visited a little startup called Salesforce.com and their CEO, Mark Benioff. And so that day was really formative in thinking about HubSpot.

Oh, that's crazy. Had you guys just taken your tuition and invested in both of those companies?

I know. That's a good point.

That's crazy. So you started it in school. How did you learn how to hire and fire people? Like, how do you know you have the right fit? How do you know when it's time to move on from somebody? You know, I think about that as somebody who went from school to a large corporation and they have all these policies and procedures in place. And then now as an entrepreneur, I'm dealing with CEOs all the time who've never really hired and fired. And I'm curious as to what wisdom you can sort of pass on to people.

Most CEOs, including myself, are quite bad at this. And I've identified some things that may be useful hacks may not be useful hacks. This is also a season thing. If you're hiring someone when you're 200 employees, I see the mistake everyone makes, and we made the mistake over and over and over and over and over again that if you're hiring someone that you want to go from 2 to 2000, you're just really attracted by that person who came from Google or Microsoft or whatever huge company with a huge resume and all that stuff. And once in a blue moon, that'll work. But generally that's a failure condition. If you hire the press release hire, that's at a couple phases over you. I don't think it normally works. Same thing for board members. My analogy for being A CEO is like, you're an ice climber going up the ice and it's treacherous and you could easily slip. And what you're looking for are executive members who have been up that same sheet of ice but in the last three or four years. What you don't want is somebody who's 20 years over you or someone who spent their whole career on top of the hill looking down on the ice climbers. You want somebody just a little bit ahead of you on that ice climbing mission. So that's one thing I think people get wrong. I also think. I think most people are bad interviewers, including myself. Like, I've missed a bunch. And I think the core reason for that actually isn't the interview. It's interviewees. Interviewees are so good in interviewing. You're interviewing a VP or a C level person for a company like HubSpot. They're good at interviewing. And if they're not, they've been coached. They've looked on YouTube. Like, I just think everyone, including myself, overvalues their ability to select talent in the interview process. I see that as a overconfidence. I think also, like, I see it with the CEOs I work with and I see it as companies get bigger. Like, you've got a panel of four people evaluating Shane as a potential vp. If all four people like Shane versus two people love Sheen and two people are like, I'm not sure about Shane. You almost always go with the person with the least amount of weaknesses in that. Lowest common denominator, higher. I think that's a failure conditions. We've noticed that over time. I take 2 loves and 2 mes over 3 likes. I think that's a best practice that people should be doing. And I think people should be obsessed with reference checking. Yeah. Calling the references. Getting good at that. Getting good at finding people in your network who have worked with them. I would guess I coach tons of CEOs on average. For every director, VP, C level person that's hired, within 18 months, they're gone.

How do you know when it's time to move on from somebody? Or I guess in a way you've either made the wrong hire or it's the wrong environment for that person to succeed. Or however you want to phrase that. But how do you recognize that? I had a CEO the other day tell me. He's like, the moment you start thinking about it, that's the moment to act on it. I've never seen anybody change their mind from that initial thought. How do you think about that. And what's your reaction to that?

Unfortunately, that's, I feel like that's conventional wisdom and I think it's largely puts with what I've seen. I rarely change my mind on people in that kind of context. And everyone says when you know, you should move quickly. I never have. They call me weak.

Have you ever regretted not moving quickly? It's sort of interesting to contrast that to sort of like Jensen, who's been talking recently about, you know, he doesn't really fire people. He sort of like berates them into being better in, in a public way. Be right is probably the wrong word, but he, he sort of wants to pull you towards excellence rather than fire you. But I don't think that's practical for most people or most organizations.

So you and I both sat through the same Jensen presentation.

Yeah.

So I spent a lot of time thinking about CEOism and coaching CEOs and there's sort of like a set of best practices for being a CEO. It's almost like a CEO unofficial school. What's confusing about the CEO school that's been around for a long time is arguably the two, I'm not going to say best, but two amazing CEOs are Jensen at Nvidia and Elon at SpaceX. And, and they completely ignored almost everything about CEO school, CEO lessons, CEO best practices. And I find that fascinating.

Talk to me about that. Right. Where maybe there is no model. We hold up this model, we teach it, it's easy to do, we say the right things, but in reality, the people that end up changing the worlds are often the opposite of all of the points that we teach. Berkshire Hathaway, for example, if you looked at their board of directors, I don't think they pass any of the sort of like standards that business schools would set for what an independent board looks like. And Constellation Software is another example of that. So with Shopify, all these companies that have sort of done these remarkable things, they don't look anything like what we're taught in business school.

Hamstad was maybe like 50 employees. Shane I joined a CEO group and I largely joined the group because I respected one of the CEOs and a guy named Colin Engel. And Colin made the Roomba vacuum cleaners at iRobot. And I, I might describe my relationship with him in two words. Man crush. I really was a fan of Collins. And I remember this first CEO group. We met all day, once a quarter, and I read this, a couple funny things about the CEO group. But I joined and I just remember spending some time with these 10 CEOs and two were kind of. They're quirky is the way I would describe them. And very unique personalities. And the other were like central casting. A blue blazer, tan pants, like really central casting backgrounds and everything. And they acted what I thought CEOs were supposed to act like. And I kind of acted like that back then. And when I looked at the numbers, we all showed each other numbers. The two quirky founders CEOs were crushing it. And the eight central castings were with me. And I was like, enough with trying to be central casting. I'm going to be exactly who I am and we're going to make everybody else work around who I am. And it's a lot easier being who you are than somebody else. Everybody else has taken. That was when I was like, I'm quirky too. I don't care that I'm quirky. I'm just going to lean into my quirkiness and be myself. And I've sort of been that way ever since. And I don't think there's a profile of CEO.

You're talking earlier how you'd love to hire somebody with two. I love this person. And to Matt, is that because of that? Because the person who says all the right things, everybody's going to be okay with, but the unconventional person you're going to get really two extremes. You're going to get love or hate.

I think what happens as a company scales is you hire for a lack of weakness, not for spiky strengths. And that's institutionalized in the scale ups interviewing panel and process. And I think that's a mistake. And I think that's one of the few things that leads to really mixed success in hiring execs in these companies.

Who do you think is the most underrated public company CEOs?

I think the guy running Uber has done a nice job. That was a very, very, very difficult golf thing he took over. He got it profitable. I think he's done a really, really nice job very quietly done a very good job. How about you?

Oh, gosh. I think Toby is massively underrated. We were sort of talking about him during the break here. What are your thoughts on Toby?

Toby reminds me a lot of Colin Engle actually. Just whip smart. One of the things I like about Toby and Colin is their very first principles thinker. They don't care to receive conventional wisdom. They're going to think it through from scratch. And sometimes you're going to get it wrong. But a lot of times they're going to get it right and do something really innovative and smart. Toby's got so much right. He's got some big stuff wrong. But for the most part, he's done a really, really good job. He's certainly not central casting. Yeah, certainly not. But I think he's brilliant and a great CEO and he's running a great company.

I like that term, central casting. Another person who stands out to me most people are probably familiar with now, but 10 years ago, nobody would have ever heard of is Mark Leonard from Constellation Software.

He's not really on my radar.

Yeah, exactly. I think they only issued equity at the IPO and they're. I don't know. It must be 50, 60 billion dollars company now.

Amazing. I see. I wouldn't put Toby in the underrated because I rate him so highly and I feel like people in my circles rate him highly.

Yeah, I rate him highly too. And I still think I underrate him.

Okay, got it.

Yeah, yeah, totally.

There's one other interesting thing that's I think, relevant out of that CEO group. I remember going to the CEO group meeting, the first meeting chain, and what I didn't realize is, is there was a topic for the whole day. And one of the quirky things about HubSpot up until that point is we didn't have any HR people. We didn't allow anyone to talk about culture because we didn't think we could measure it. It was too squishy. And I remember I arrived there on the first day. First thing that got put up was the topic of the day. And sure enough, it was culture. And I remember thinking, that's going to be a big, big waste of time. At least I got to know my man crush. The whole morning I was pretty disengaged. And then Colin at lunchtime, I remember he said to me, he's like, why aren't you engaging? You don't like the topic, do you? I said, no, I think it's a waste of time. He said, brian, culture. Culture is how people make decisions when you're not in the room. Culture is how companies really scale. Okay, okay, okay, okay, got it. And then the afternoon sort of engagement, and then the next day, go to the office and my co founder, Dharmesh, says, how's the. How was it? How's calling? Like, how did it go? I said, it was really, really good. They do one topic a day. Said, oh, what's the topic? I said, it's culture. Oh, shit, what a waste of time. I said, no, Jarmesh. Culture is how People make decisions when we're not in the real cultures, how HubSpot's going to scale. And he said, okay. And it's very hard for me to assign work to my co founder to this day. Somehow I assigned him to be the cultures are pub spot. And he did an excellent job and still is doing an excellent job of marshaling the culture from, you know, 50 employees, 8,000 employees. And he did two clever things. First thing he did is we're big on Net Promoter surveys. So he surveyed all the employees, scaling 1 to 10, how likely to refer HubSpot as a place to work. And then why again, people wrote novels about it and he kind of broke it all up into, you know, different topics. And then he wrote a PowerPoint presentation called the HubSpot Culture Code that basically described the relationship between toys and company and just sort of outlined how we thought about culture. And then he posted it on the Internet and it blew up on the Internet. But we continue to do that Net Promoter score once a quarter for the last 15 years. And we've been tracking our Net Promoter score per quarter and that's been very, very useful. Then we post every response to the Net Promoter Surveyor and Culture on the wiki and then we address the issues that come up. That best practice is served as well. Every six months we refactor the PowerPoint deck. It's a living, breathing document. And we basically treat culture like our second product, like our product, HubSpot. If it's unique relative to the competition, it's good quality product and it delivers value. It's like a magnet that pulls customers in and retains them. Same thing with the culture. If it's unique relative to the competition, it's high quality and adds value. It's like a magnet that pulls in employees and retains them. And so we put a lot of thought into that culture stuff and I think a lot about how do you take, how do you go from start to scale up? I think a key part of that is getting your culture right and writing it down and institutionalizing it.

I'm going to make a statement about culture and I'd love for you to argue, take both sides of the debate, if you will. So I'm going to say that culture is the only sustainable advantage.

I disagree.

Why?

Let's take Uber. They had a certain culture. Dara, the new CEO came in. I'm quite sure he made massive changes to the culture the founder put together and he thrived. I don't. I think some of the benefit, of course, is his culture. But they had major sustainable competitive advantages in that they had a fleet of drivers and customers and a network effect and software that works. And he's probably been there 10 years, and I don't think it's all culture.

Oh, that's interesting. So in my mind, I would sort of think of that more like they had a advantage, like an operational advantage that came from the network effect and the scale. I don't know if that would have been enough to sustain it going forward without the culture.

Fine. I sort of agree with that. I think the best example on the other side of this is Satya. Satya is on my Mount Rushmore. CEOs. A lot of people push back on me. It's like, oh, he wasn't a founder. He shouldn't be on there. He's on there for me. Because Microsoft was going very, very sideways for a long time and he stepped in and really did change the culture in a massive company and, and couldn't be more impressed with him and the culture change and, and how well that worked. So that's. That's my flip side of the argument. Is Satya.

Okay, who else is on your Mount Rushmore?

Jerry Garcia is on my Mount Rushmore. Great CEO. The aforementioned Steve Jobs on there.

Why Jerry Garcia? Grateful Dead.

Really? Why Jerry Garcia? That's the most obvious one on there. Why?

No, I'm curious. I. I'm. I'm not a Grateful De. I've never. I don't think I've ever really sat down and listened to the Grateful Dead. So, yeah, you're gon to walk me through this one.

Okay. Jerry Garcia was the CEO cut in the cloth of Colin Angle and Toby Ly really disliked conventional wisdom and kind of rethought everything from first principles, starting with the music. So they started that band in the mid-60s, and at the time there was all kinds of rock and roll music, and there was jazz music, country music, and bluegrass music. And they didn't do any of that. They created a new genre of music people referred to as jam bands now. But Garcia himself was a bluegrass player, and the bass player was a jazz musician, and the keyboard player was a blues guy. And Bob Weir, the singer, was kind of a country rock and roll guy. And they blended them all together and they infused this jam band mentality into it, and they really stretched the songs out with improvisation. So they sort of rethought the genre and made a new type of music. The product was unique and the go to market was exceptionally unique. If you think of like when I was in High school. If I wanted to go to a Rolling Stones concert I would call Ticketmaster and I would wait till whatever it is, 1:30 on a Tuesday when the Rolling Stone tickets were on sale and I would, you know, dial away five minutes later to dial away. And it may or may not come through. The people who ended up buying most of the tickets were the scalpers. The scalpers had a, a whole bunch of people buying the tickets that sold the tickets in a markup. And so the front row of the Rolling Stones concert was a bunch of bankers and venture capitalists, people who could afford the tickets. And the Greenville, they didn't like anything about that. Shame nothing about it. They particularly didn't like a bunch of bankers and venture capitalists in the front row of their concerts. They wanted their hippie crazy fans in there. They also didn't like the distribution setup. So it's grateful then. And then Ticketmaster took their slice and then scalpers took their slice and then the fans. So they said we're going to disintermediate just like the Internet did do so many things. We're going to disintermediate those two layers and we're going to sell tickets directly to customers. The way they did it was you listened to a 415 recording that explained what was going on in the way Shane you would buy the tickets was you have to put a three by five card which concert you went to. You can only buy four tickets per concert. Okay. So the scalpers are less incentive. And then you had to go to the post office to get a postal money order. So just a total pain in the backside to get a postal money order. And then you had to put a self address stamp down below and then you put it a regular envelope and mailed it in. Now how would the grateful bed chain decide who gets the front row seats?

I have no idea.

The way they sort of did it was that self addressed stamped envelope. The more beautifully you could decorate it with dancing bears and mushrooms and sprinkles.

I love it.

Yes. So they solved a bunch of problems. That's not the end of it. When was the last concert you went to, Shane?

Oh God, it's been a long time.

Did you go to Taylor Swift?

No. I have. I am a Taylor Swift fan.

Okay, let's just say you went to Taylor Swift in Ottawa. Yeah. And you showed up with your giant camera and your boom microphone and you showed up there. What would have happened at the, at the gate?

They wouldn't let me in.

Why, why doesn't she want you recording.

It might affect other people's experience if I have a boom mic. I mean, you can't prevent people from recording on their phones. So at some degree, they're accepting it. The NBA actually went through this a couple years ago. They were trying to, like, really block people from posting clips on social media. Then they actually embraced it, and it changed the whole league, Mark. It got way more people. Sorry, this is like a sidetrack to this, but, like, that change in the NBA really changed the NBA.

Okay, pre iPhone. Let's say you were going to a Rolling Stones concert and you had all that equipment. You're walking. Of course they would block you. And the reason is you see the Rolling Stones in Boston and New York and then Philly and then Miami, the exact same concert. Like, they don't miss a note. They're fantastic. Same thing when you walked into the Grateful Dead with your big boom mic in your big camera, they put you right in the taper section, the perfect spot to watch the concert. They instead they do to tape it. And you taped it, and then you went from Boston, Then you went to New York, you taped it. You went to Philly, you taped it. Then you went to Miami. Then you get back to your dorm room, and you copied as many tapes as you could of the best concert, not the worst concert, and you gave them out to all your friends. And that was how they market. They gave away the content. They were the first inbound marketers to really nail that. They were the first real freemium model. They were the first viral marketers. And the way they did it was brilliant. And it worked for them because every concert was quite unique. They're a jam band, so they've never played the same set list twice. And so there was an incentive for knuckleheads like me to go from Boston to New York, up and down the East Coast. You're back. I did that last week. I was at the Sphere, and I saw them Friday, Saturday, Sunday. Garcia was a genius. He's a marketing genius, actually. And I think he's a music spot.

That's fascinating. I'm going to have to listen to the Grateful Dead now. I'm like, I'll send you some stuff.

Yeah, I wrote a book on this called Marketing Lessons from the Grateful Dead.

We started talking about inbound marketing there. I'm curious as to. You guys pioneered inbound marketing to a big extent and definitely got the momentum rolling there. How has that changed in the past few years, and where is that going in the next few years?

Ironically, I think it kind of went out of favor a bit over the last few years and I think it's about to come back in favor. The things that change about it aren't that different. Instead of like cold calling people and spamming people and advertising it, people in renting space on YouTube or renting space on your podcast or your blog, or renting space on the New York Times, create your own New York Times, your own podcast and become your own publisher and then pull people in through Google in search and other social outlets. It works very, very, very well. You're living proof of how well it works. The things that have changed are the social media networks have changed. When we first wrote about this, before we started HubSpot, we started writing about, in that marketing Dig and Reddit were the two big social media sites. I don't think Dig's around and Reddit gone through all these iterations, but obviously with Facebook and now it's TikTok, it's Instagram, it's all these new social media sites. It's YouTube, you know, people live in YouTube, it's podcasts. And so the medium isn't necessarily a long form blog like it was back when we started HubSpot. It's videos, a lot of short form videos. And so that's changed quite a bit. I think what's interesting about what's going on now is today you go to Google and you get your 10 blue links. If you look across our customers, that's 62, 63% of the inbound traffic is via Google and most of it's organic. I think over the next five years that's going to change a lot. I think Google's going to have to change a lot. And I think people are going to spend more and more of their time inside ChatGPT and they're all ChatGPT's competitors. And I think when you're engaging in that way and you do a search in ChatGPT for let's say HubSpot, we'll tell you about HubSpot and then you'll say, well, how does HubSpot compare it to Salesforce? It will tell you about that. How much does HubSpot cost? It will tell you that, like you will know a lot about HubSpot. One of the brilliant things about Google is their blue links and they didn't mind sending off their website. It's very counterintuitive idea. I think that's going to start changing as consumer behavior changes. And I think it'd be really interesting to See how it evolves.

Do you think content is just going to get overwhelming? I mean, you can create content with like two sentences now. You can create blog posts that would rival probably the best people were putting out maybe 10 years ago with almost no effort whatsoever.

I think you're right. And I think it's not just that, but it's going to be emails. Like I think the robo emailing and the BDRs. I look at lots of startups in the CRM phases might imagine, but there's. I counted about 48 startups building automated AI agents. I still think having a unique perspective and a unique personality is going to work. I don't think your podcast goes away because I start something that sounds like you and I use an avatar to deliver it. I think something, what you're doing will last the test of time. And I think a lot of people, particularly in scaleups, run away from their personality. They make it generic and like you have a certain vibe and a certain personality. I think that kind of works for you. And it's going to be very hard to replicate. Quality and uniqueness never go out of style and I think are going to be increasingly important as the Internet just fills content that's AI generated.

It's almost what you said before, like lean into your individual quirkiness and your tribe will sort of find you and then go around with you. Although you have me worried, we're almost a million people on our newsletter now. I'm like, oh God, if this is going away, I got problems.

I also think we're going to see the trend and I'm certainly not the first person to say this, but I think you're going to see a lot more small big companies and you're going to be able to get a lot more done with a lot less people. I don't think in a billion dollar company you're going to need 3, 4, 500 person marketing organizations. I think the new tools are coming out, including HubSpot's tools and CRM suite. I just see how incredibly powerful they are. I think you're going to be able to scale in a whole new way. And I think the AI revolution, like when it comes to inbound, I think top of the funnel gets more difficult. I think middle of the funnel gets easier. The really high quality personalization on your website, on chat, on everything, that gets much more powerful. Top of the funnel gets more difficult. Yeah, I think inbound's gonna change, but I also think inbound gonna kind of make a comeback.

How do we do outreach in a world of AI and in a world where people are bombarded with is it going to be freemium and then pulling people in through that and like the outreach is letting them know about the freemium stuff.

You got to get good at the branding thing again, it turns out, because getting into your or my inbox is going to become exceptionally difficult with all the changes Google's making to email, that's getting harder as it is. But the robo emailing is going to go wild and the robo content is going to go wild. So it's a little more around branding. You have to kind of be good at everything. It's like a baseball 5, 2 player. You have to be getting found in YouTube, you have to be getting found in all the social states. ChatGPT is going to understand you perfectly well. Google's going to understand it perfectly well. And you need people tripping over you all over the place. I think people have to get comfortable with the fact they're going to have less new visitors to their website because ChatGPT and their ilk are going to know so much about you and not have those lists of blue links. They're just going to live on there and learn so much about you. And then when someone's quite serious, they end up on your website and you have to get very good at personalizing that website experience. I also think people are going to end up keeping more information behind the paywall and the login wall on their websites because they want to keep a little bit back from ChatGPT because ChatGPT is going to understand the public stuff so well. I think it's going to change in a good way though.

I guess the baby step that Google made on that was like when they would just show you sort of the excerpts. If you asked a question, it'd be like basically giving you a link. But it's like really hard to find. It's like, here's the answer to your specific question. YouTube is fascinating because unlike voice podcasts, YouTube has virality to it. So like when we do an in person recording, the YouTube reach is larger, in some instances, not all, than our podcast reach. And so we get like 300,000 people sort of listening to a podcast episode. But on YouTube we'll get 300 to 500 to a million nice people. But it's YouTube's algorithm picking it up. It's like, people watch this, but what we can't do is like send people off that platform. So it's really good for like stats. Like, I I was at the the gym the other day and this guy's like, I got 2 million tick tock followers but I can't do anything with them.

Yeah.

So. So I can keep them on this app. And I'm really famous in this localized environment. But TikTok is 100 in control. I don't own that relationship. Same as YouTube. I don't own the relationship with the viewer. YouTube does. The minute it doesn't like me and wants to cancel me or doesn't like my content anymore or wants to promote a different message, whatever that algorithm is that's doing that can just like, you're gone.

I think you're right. I thought Google was going to roll over and play dead there for a little while. Like I moved most of my search traffic to Perplexity. Really like it. Google's kind of started and stopped a whole bunch of stuff. But recently they're making noises like they're not going to roll over and play dead to Perplexity. That's such an interesting company right now. And to watch their moods will be very, very interesting. It's a challenging time for them, but it looks like they're going to. They're not going to let Perplexity just hoover up a bunch of their users.

Hopefully not. We all want some competition here. I have a couple random questions. I'm curious what you've learned about making decisions that you think other people miss.

On my CEO journey for a long time, I would kind of look for consensus. I think consensus is really the enemy of scale. And so I used to say whenever we're making an important decision, there should be winners in the room and losers. We shouldn't find like that negotiated settlement that everyone's happy. Somebody should be unhappy. Three or four people should walk out unhappy and one should walk out happy. And we're all. We're all going to be good with it. As you get bigger, this gravity pulls you towards consensus. And I think consensus is the enemy of greatness.

How do you fight that?

I write that on whiteboards. I talk about that inside of HubSpot. I try to make an example of that every time I'm in a room. I've written a bunch of blog articles about that wiki post about that. At one point inside of HubSpot we had a terrific too. I love and he had a lot of great qualities. One of his qualities I didn't love was he was a consensus person. And we had a lot of conflict over that. And so we talked about that a lot. The management team Talked about that a lot, but I sort of had this thing like, there's going to be winners and losers in every argument, and if no one walks out a little bit sore, we probably made the wrong decision.

So go deeper on that for a second, though. So put me in the room at one of these meetings where there's four people on one side, there's four people on the other side. How do we come to that decision? Is it the highest paid person in the room? Is it the person closest to the problem who actually makes that call?

Let's just say it's my call, which is rare. And two people in the room are saying black, and two people in the room are saying white. I think that the majority of CEOs are walking out of the room with the decisions gray.

Trying to please everybody.

Yeah. Try to thread the needle. And I think that's a problem. It creeps in more and more. The bigger you get, the worse that problem gets. And I always tried to walk out of the room. It's like, we're going to pick black or white. If you lose this decision, you might win the next one. Let's not get all pissed off about it. We'll all survive. And I think that's the right way to scale it.

Is there anything else you've learned about decision making that you're like, oh, I wish I knew this sooner?

I would say one thing I've learned about scaling a company, like, from the outside. Went from company with an idea and two employees to it's worth $30 billion and 8,000 employees and a couple hundred thousand customers. It looks like a smooth graph from the upside, but I'll tell you what, it's a grind on the inside building HubSpot. It's very much two steps forward, one step back. Two steps forward, one step back, two steps forward, one step back the whole way. And there was no silver bullets along the way. There was no one hired to completely change the game. No partnership to change the game. No customer, no investor. It was all kind of two step forward, one step back, two step, four, one step back. And the other thing I would say about the journey is kind of related to that. There was definitely wartime and peacetime when you're halfway through it, two steps forward, it was peacetime. When it's one step back. It was wartime, and I love wartime. I'm definitely a wartime CEO. I hate peacetime. I really need to sit on my hands and just let it go like it's going great. Leave it alone. And I have a hard time doing that. And I think certain CEOs are peacetime and certain CEOs are wartime. I'm very, very, very much a wartime person. Like Covid, wartime. We made so many changes during COVID I hated Covid and I hated the impact in society. But inside of Public, that was a fun chapter.

What does wartime mean for you? Is that like, we're fighting for our very survival? Does it mean we can just move faster and sort of ignore some of the bureaucracy? What does it mean?

I think peacetime is bottoms up and more consensus and wartime more top down. And it's like, hey, it's wartime. I don't have time to build consensus on this. This is what I think we should do. We're going left. And I like that about wartime. And wartime is like, okay, I remember 2010. The economy was shaky back then. We were a very young company. Maybe it's 2009. And our retention statistics were horrible. Everyone was canceling. Our product wasn't good back then. And we lost. I remember of the thousand customers we had at the beginning of the year, we lost like 700 of them. Like, just horrible churn rate in 2009. And that was existential. And it was like, let's just stop the music and start over everything we're doing.