Brian Halligan: Leadership Lessons Scaling Hubspot to $28BN | E1103

I had this very bad snowmobile accident.

I love the way you're, like, laughing. This was such a serious accident.

Yeah. I thought I was going to die. Like, went off the cliff. Was in the cold dark of night in Vermont. No one knew where I was. While I was sitting there. I was thinking a lot about my life in that moment. I thought, if I make it alive, if I make it out of here, what should I change? And one of the things I thought about on the bottom of that cliff was, I don't want to be the CEO of HubSpot anymore.

Brian, I am so excited for this. I've heard so many things. You know, I've stalked the shit out of you from all the references. But Paz told me so many good things for years. So thank you for joining me.

Thank you for having me. A big fan of the show.

That is very, very kind, but I want to start. And I was reading and stalking, and I heard that your first job was as a paperboy for the Boston Evening Globe, and you met a family called the Harrisons. Can you take me to that experience and what you learned through the paperboy and the Harrisons?

You really did your homework, Harry. I think I was 11 years old, and I had a paper. Paper. And there was a low point on the route, and a high point on the route. The low point was house numbers four and five. House number four had a German shepherd that didn't like me coming on the front porch every day. And house number five had a Doberman pinscher that didn't take kindly to me coming on the porch every day. And so they would really give me a scare. And I had the paper route for years. And every. They never warmed up to me. So I got a good scare on House 4 and 5, and then House 16 was the Harrisons. And the Harrisons were a very fun, very successful family. And I would come in, I'd deliver the paper to Mrs. Harrison. It was the last house on the route. And she would invite me in, and she was a terrific cook, and I would help her cook dinner, and she was super engaging. And she had four kids that were all a lot older than I was. And let's just say they were hyper overachievers, much more overachieving than the Halligans were. And I used to play, like, Nerf basketball with them in the living room and kind of got to get to know them. And so that was my first job. And I was one of those people. I always had a job. But the reason that really paid off for me And I think this is what you're referring to is Richard Harrison, Pat Harrison's oldest son, gave me my first real job out of college, and it turned out to be a really good spot to start my career. So that paper route really paid off for me.

I mean, it's funny, actually. I watched. I was looking at Twitter the other day, and Dan already said about the importance of saying yes and taking the opportunities, and you never know where they'll go. And you're like, huh, the paper route that led to the first job, that led to so much more, which we're going to get into, I guess in.

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

You know, in all the stalking that I did, how I knew that I'd like you so much is because you said that mothers are such an underrated element of a CEO's journey. And I. I mean, I couldn't do it without my mother. And so I just knew that. Great minds think alike in that way. But can I ask you, when you think about that and luck versus skill, when you reflect back on that in your career, how. How do you think about the weight of luck versus the weight of skill?

Lot of luck getting. So my first job was at a company called PTC. It was a CAD software company, and I was employee number 200 and 100 years ago in 1990. And I stayed for 10 years, and by the time I left, there were 5,000 employees. It was a great. I had a great run there, and I just got very lucky landing in that spot. And I give my mom and Ms. Harrison all the credit. I think it was Louis Pasteur who said, luck favors the prepared. And if I were to do sort of a correlation of prepared versus luck, they're highly. The R squared on that is quite high. So I've always been overprepared for everything. And after that first job, I give preparation a fair amount of credit. Maybe it's half preparation, half luck, half right place at the right time. But people who are, well, prepared tend to be at the right place in the right time. I've noticed.

I totally agree with you, and that's why you prepared so well, for this show.

I think you called my kindergarten teacher.

You know what, they were sadly unavailable. So your grade one teacher had to suffice. I also was looking at the schedule going Louis Pasteur said. I'm like, I didn't know it was Louis Pasteur. This has to be Brian's intellect. That is amazing. But. But again, like thinking back to the paperboy route or kind of journey. You also said before that sometimes the lowest paying job is the best option for future CEOs. And I read this and I was like, I don't actually know what he means by that. Is it Sheryl Sandbags just get a seat on the rocket ship. What did you mean by sometimes the best is.

I, I don't think Cheryl was way off on that. And that was very much the case for me. So I remember this is really 100 years ago, but I had three offers and one was from PTC. And really my first job, Harry was, I was what they used to call a secretary. I was a secretary to the head of sales in this company, head of channels actually. And that was the offer. It was $20,000. And then I had two other offers for kind of sales positions in these two other companies with higher pay. And I chose the lowest paying job with the company that had the most upside and with somebody in there that I thought just might champion my career in this guy, Richard Harrison. That really paid off. I don't know what happened to those two other companies, but PTC is still around. It's a 20 billion market cap company. It's done quite well. And so I don't think Sheryl is far off in that hop on the rocket ship quote.

I totally agree with you. I guess my question to you is when you think about advising young people today, there's often the debate of should I just start my company and you learn by doing or should you join the rocket ship? Where do you land when advising people there? And I know people are different and so it's hard to generalize, but if you were to.

Yeah, I think it's super hard to generalize because there's people come at it from different angles and are very successful. My personal journey was I was. I joined two scale ups, not even startups. Like I joined a 200 person company that was growing quite fast and that was ptc. And I ended up being their first basically inside sales rep and sales and channels and marketing. I ended up doing lots of different things. They moved me to Asia to start Asia. And you know, if you're on a very Fast growing scale up you get a lot of exposure, you get a lot of opportunities. So that really paid off for me. My second job was at a completely different company but also a scale up called Groove Networks that eventually got acquired by Microsoft. It was kind of a middling outcome, but same thing. I learned a lot but instead of it at ptc, I learned a lot about selling. How do you build a sales organization? How do you hire reps, how do you open international offices, how do you build a lead gen machine? How do you build that revenue engine? At Groove it's totally different. The founder was very different. The orientation was it was a product company. I learned how to think about the future, think about products, think about technology, craft awesome solutions for customers and I learned a lot in that journey. So for me joining a scale up twice really informed. HubSpot in like PTC and Groove are very. Both of those companies and their DNA are very much. I can look at things that happen inside of HubSpot and point back to those two companies.

We're going to dig into each of those components. I'm glad that you did a teaser. I do have to ask when we think about and I love this when we think about reflections on earlier days but also where we are today, I think everyone's running towards and running from something and I know I certainly am. My therapist tells me for a solid $300 an hour. Prick. Anyway. What are you running towards and what are you running from, Brian?

I don't know. I probably need to spend. I need to up my to $300. My therapy. I need to get better therapist but I don't know. You know, in fairness to your listeners, you sent me that question beforehand and I did. I thought about five minutes and I don't have a great answer for that. I'm not sure what I'm running from and running to. I'm trying to run to though happiness. I'm trying to. You know I'm not a huge. I'm a huge music fan. Big Grateful Dead fan. There's a song that James Taylor. I know people roll their eyes with James Taylor. He's a little bit of an eye roll but he's from Boston and you know I apprec. He's got a song that says the secret of life is about enjoying the passage of time. I don't think he's totally wrong about that. And I'm trying to enjoy the passage of time as I look forward over my next 20, 30 years. And so I think that's kind of what I'M running towards.

Do you know what truly makes you happy? If I had a tax. But I'm always very open on the show and I think it's what it does well. I had a tax bill that basically made my eyes bleed. And it really made me question why I do what I do and why I sacrifice everything that I do. Literally, I never see daylight. And I was then reminded of what really makes me happy by my mentor, and it was going for a coffee with my mother and walking around the park. And then the money. Yes, it's important to an extent, but it's not everything. If I ask you what really makes you happy, Brian, do you know?

I don't think it's as much about things that make me happy as about being devoid of sadness or unhappiness in avoiding things that irritate me or I don't enjoy the passage of time of. And so I'm trying to shed in my life people. I hate to say that in things I don't like to do as much as I possibly can. I don't think I'm quite sure money doesn't buy you happiness. I can say I have a bunch of it now. I never had it. And I'm no happier or less happy than I was. I would give myself, like, my MPS score on my happiness is like between an 8 and a 9, like, pretty happy. It hasn't been an 8 and between an 8 and 9 forever. Money buys you something. Money buys you convenience. It's really the only thing it buys and that's valuable. It enables you to do things, to do less things you don't like to do. I'll give you a very good example. The one thing I've done with some of the wealth I've created is back to my mother. My mother was dying. She had a home health aide named Marilyn from the Philippines. I loved Marilyn and she took care of my mother for years. She was almost part of the family, and she's just terrific. And then my mother sadly passed away, sort of loosely kept in touch with Marilyn. And then a couple of years later, Harry, I had a brutal snowmobile accident. I was in the hospital for a long time as a wheelchair. For a long time. Six months in a wheelchair. And I needed help. So I reached out to Marilyn and I said, marilyn, could you take care of me the way you took care of my mom? And she said, sure. And so for a couple of months, she didn't move in, but she was at my house all the time, and she was wrapping that up and then she was wrapping, resigning. She was, she basically said, I'm done. You know, you're fine now. You're out of the wheelchair. I'm going to move on. And I said, wait a sec, wait a sec, wait a second. Can you cook? She said, no. I said, can you clean? She said, oh, yeah, I can clean. I said, what if we changed your job and you just took care of me, you took care of my dog. You cooked, you cleaned, you organized. And so I hired Marilyn, I don't know, a year and a half ago. And she's terrific. She's a warm presence in my life and my dog's life. And she just does so much stuff and it just avoids. I don't have to do laundry, I don't have to clean, I don't have to cook, I don't have to think about so much stuff because she does it. That's the only thing of, like, real value that's been created from the wealth I've created. With HubSpot.

I told, I get you. What about security? My family lost everything when I was young. And, you know, what am I running from? A little bit is towards financial freedom of having enough to not worry for my family. Do you think, do you appreciate the security that it brings? Or actually, are you much more of a risk taker? It's like, ah, I was fine without money. I'll be fine, whatever.

I never worry that much about it. I always thought, I always thought I'd have some measure of success and I would be fine. I just always sort of had a confidence in that somewhere deep down inside. And so, yes, I'm financially secure, fine. But I think I worried a little bit less about that than everybody else. There was something down deep inside of me that wasn't that worried about that. I knew I had the ability to create something even when I was very young, just back to my youth, I had that paper out. But I was that kid who always had a job. I worked at a gas station, I worked at a fish market. I was a bar back, I was a waiter. I did like every job you can imagine. Started a painting company. Every summer. I painted about 5% of Cape Cod and just worked my way through every summer paint another 5%. And so I always knew that I, I was, I would be, I would be fine financially. I just had that feeling deep down inside.

You know, every founder meeting I have, I always ask the question, how did you first make money? Because I've never met a great founder who goes, oh, I went to Yale or Oxford or Stanford. And then I joined McKinsey or X. That was the first time every great founder did a paper route, started building websites, they sold clothes at school, they did Beanie Babes on ebay. Something. Entrepreneurialism always starts early for the truly exceptional people.

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

Thank you. I'm glad I came, Mary.

I'm glad I came. Learning a lot.

Please, I'm loving this. So you said also about like running from or like avoiding things you don't like without naming the people because that might be egregious. What did you cut out of your life that you didn't enjoy?

Okay, I mentioned a minute ago I had this. It was a very bad snowmobile accident.

I love the way you're like, just like laughing. This was such a serious accident.

Yeah, I almost, I thought I was going to die, like went off the cliff, was in the cold dark of night in Vermont, freezing cold night. No one knew where I was.

And now you know what it's like to be a public Markets founder in 2024.

And anyway, I got very lucky and was saved. Um, but while I was sitting there, I was, you know, I was thinking a lot about my life in that moment. And I'm fairly reflective about my life. And we're just coming off the new year, so I've been thinking a lot about it, but in that moment I thought, if I make it alive, if I make it out of here, what should I change? And one of the things I thought about it on the bottom of that cliff was I don't want to be the CEO of HubSpot anymore. You know, I started this thing. It's got 7,000 people, it's a big company, it's going. But I don't think I'm necessarily well suited for the next phase. From 7,000 to 70,000 or whatever it is, from 20 billion market cap to 200 billion market cap. I didn't necessarily enjoy the work at that size as much as I enjoyed it, you know, in an order of magnitude smaller. And so I really made the decision in my head on the bottom of that clip that night that if I make it out alive, once I recover, I'm going to hand the reins off. And that's exactly what happened. I was out of work for seven months and seven months in a day. We gave the job to Yamini. She's terrific. Who's CEO of HubSpot now and I'm chairman. And that turned out to be a very good decision for me. I'm generally quite, quite a bit happy. I didn't love the work of a big company CEO and I don't think I was that good at it.

Why.

I like it earlier, smaller team, where I know people. I'm really viscerally in touch with the product and the customers. I'm not worried too much about governance, about enterprise risk management, about things like that. I don't spend much time at all speaking with lawyers and law firms. I like that. I like the scale up phase of 20 to 2000 I think was where I was at my best. I don't think I was at my best from two of us to 20 or 2000 to where we are today, but I think I was kind of at my best between 20 and 2000.

Do you think people are destined for certain stages of company building? You know, there's that like very standard statement that like, oh, people are very much meant for a certain stage. Do you buy that or are you like. No, I've seen many people transcend that and it's bullshit.

I think it's right. I didn't think so. When we started the company, the crew we hired in the early days of HubSpot were terrific, very bright. And I thought, you know, if we ever make it to the size we are now, which you know, I would have put very low odds on that it would be the same crew. And we're I think on our third or fourth generation of leaders at HubSpot. And there was nothing wrong with that original crew. In fact they've gone on to do amazing things but I just don't think they were interested in that next phase. And so I think you do need to, I think it needs to evolve and your team needs to evolve over time. And when I look at our team and we'll probably get into this, but we've always had an interesting mix on our executive teams of people who we've hired, kind of been that, been there, done that from the outside and then people who kind of came up through the system and I like it and I know you're from the UK so you don't know about. We have, we have a thing in the United States. I don't know if you heard it, it's called baseball.

Yeah, I've heard of it. It's like rounders but, you know, more popular.

And like the Boston Red Sox didn't win a world championship for 84 years. Very frustrating. And they won four in the last 20. And when I look at the teams that won, they were a nice combination of People they drafted out of high school and kind of came up through their system and really got it mixed with some free agents were a little more expensive from other teams who had seen success before. And that mix really works. And I think that has worked for HubSpot. We've got a mix of people kind of grew up through our system and we hired people from the upside. That's. That's proven to work pretty well, I think. I think that's a good formula.

I totally agree. It's a good formula to have the combination. It's hard to do. Final one I just have to touch on before we do discuss some of the mechanics of your leadership is I identify myself with 20 VC. It's all I've ever known as an adult, which is quite terrifying. You'd been involved for so long. It was such a part of your identity. Was it difficult to transition out just in terms of losing a part of your identity?

Okay, it's a really good point about that. I remember looking at my review maybe five, six, seven years in and seeing comments in my review about how Brian doesn't understand that he actually is HubSpot. Like it's embodied in him in that every action he takes and every decision he takes is really HubSpot. And how those things came together. I was quite surprised at how much those things had merged together in the employee's mind at least. And that was actually some useful feedback and useful revelation. It made me think more carefully about my actions and my decisions I was making because I hadn't realized those things and kind of merged together. And I think that probably happens with CEOs of. Or founders of all companies as they scale. And it took me by surprise how much those things came together as we. As I transition out, I'm still involved. So it totally hasn't happened. Like, I'm still the chairperson. I still go to the office. I'm still very. I just had a, you know, a call with a bunch of techs yesterday. I'm still very much involved. So I. I think I'm not totally disassociated with it. And I think that's okay. If I had just left Harry, I think that would have been tough for me. I think you're right. I think my identity is pretty wrapped up in HubSpot. And there'd be some sadness around that, I think.

Yeah, I agree. I always struggle to go on holiday because suddenly you're like apart from your work. And when your work is such a large part of you, it's like, feel quite Isolated and not very good.

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

I mean, I love that. I'm just not going to tell it to my team who are already telling me that culture is something I need to work on. I do want to touch on your leadership. You know, it was something that so many of the references that I spoke to you said that we really needed to dig in on. And I think people change so much over time. So when you compare Brian Halligan that started HubSpot in 2006 to the CEO that transitioned to Yamini in 2023, what are the biggest differences in that style of leadership?

Okay, I mentioned reviews earlier. One thing that my co founder, one of the best things my co founder Dharmesh has done is he owned doing my annual 360 degree review. And he did it in a remarkable way. And we started doing this like five, six years in the way Dharmesh does the review. Sir, Dharmesh is very introverted and does not want to talk to anyone really does it. So he does a net promoter survey on me. And so he sends a net promoter survey. On a scale of 1 to 10, how likely are you to refer Brian as the CEO of HubSpot? And then why? And he sends it to 30 people. The board members, executive team members, frontline members, customers, partners, and people score me. And then they write a novel, Harry, Like a novel about me. And then Dharmesh takes a while and synthesizes it together in a really cool way. And I remember the first one I got was 20 pages. So I had a review that was 20 pages long and I started reading it. And the first, the beginning of it is here's your score and then here's your features. So Brian's really good, explaining the vision of HubSpot, for example. And then he would pull out direct quotes from three or four of the people who had said that theme. And I could read the quotes. Brian was. And I'm reading through it. And the first 10 pages, Harry, I was pretty convinced I was the best CEO ever, ever, because it was all my features. I got to page 10 halfway through and the next 10 pages were my bugs. And there was a full 10 pages of bugs with direct quotes pulled out each one and I had a big glass. I remember the first time I sat down at a big glass of scotch when I was done with it, pretty well convinced I was the worst CEO ever invented. But that was a very, very, very useful exercise we went through every year. And now Yamity goes through it to get awesome feedback. That's well organized and it was great. And there's infinite numbers of things I was bad at and not good at and they were all surfaced in that process.

What are the biggest elements that you changed on the back of those reviews?

I would say the biggest one that just I couldn't put to bed and we come up year after year after year was my thinking is, is. Is the. The control freakish of founders is a amazing strength in startup mode. And that amazing strength of founders turns into an amazing weakness as you scale and you're more prepared than everyone. You're overthinking and you're basically doing everyone else's job. And that just came up over and over and over and over again. And I do think I improved on that over time. And what I ended up, the thing I ended up coming to, like the same weaknesses would come up year after year. And some of the weaknesses were. Or some of the bugs are like, you know, at HubSpot, if there's a bug, sometimes it's like, actually that's the way we designed. It worked as designed. Some of the bugs were actually, I thought features and they'd show up on both sides. So I would pick a couple of things, I would work on improving and then a lot of them I would just be like, you know what? I'm never going to get better at that. I'm going to try to hire people who map perfectly into those weaknesses. So I'm the type of person who's. Who. Okay, great. I've got all these weaknesses. I try to hire around them and I try to advise my folks to hire around them and can I lean into my strength? So if I have a strength that's like a 10x strength, how do I make that 100x strength? Or I've got a weakness that it's a minus 10x strength, just leave it at minus 10x because I'm never going to get it to plus 10x. That's kind of how I think about it.

I totally agree with you. Did it upset you?

Yeah, kind of.

Yeah.

Kind of, yeah. Reading that was. Was a little upset. Was a little upsetting. Yeah. I will say one piece of feedback I got back then. So I've been reading about Jensen Huang and Elon, because they've got such unusual CEO styles that completely fly in the face of everything that any CEO, coach or anything you read about being a CEO will teach you. And one thing I. Jensen Huang's really got a very different playbook. He's the CEO of Nvidia. One of the things he does is he criticizes in public. Okay? So he's got his team. He's got 40 direct reports, which is pretty weird. Or 50 direct reports. And if somebody says something, disagrees with, or does something that he didn't like, he will in front of everyone. I think he does it in a very nice way, but admonish them or criticize them or give them feedback so everyone can hear it. And I remember back in the day getting feedback that I used to do that people really did not like it. And I probably didn't deliver it as diplomatically as Jensen does. And that has private and public praise in public. But I wonder about. I think Jensen might be onto something on that. I think I could have delivered more diplomatically, but that was one I was thinking about as I was thinking about this interview that I wonder. I wonder about.

Brian, help me. I'm a young CEO. I am incredibly direct. Me and you sit down. I said, brian, listen, let's be honest. That was shit. You need to improve on this, this, and this, and please don't do that again. And people find me too direct and too harsh. If we're honest, I was the same.

I was the same. I got more diplomatic. One of the things I worked on was getting more diplomatic over time. And the other thing that I didn't realize is how much Harry, people really listen to everything you say. Yes. You have merged as the founder with the company. Everything you say, people pretend like they don't listen and they push back at you, but they remember what you say. You'll run into somebody in. You know, you'd be walking down Newbury street in Boston and bump into an employee and you'll have coffee with them. They'll say something. Remember when you said this four years ago at a company meeting? No, I don't remember that at all. So people really, really listen and over index on what you say. And so I do think getting better and more diplomatic over time did help me and help the company.

Can I ask you something about the control freakiness? I get you, but I quite like sweating the detail. And I think some of the best founders do sweat the details. He mentioned Elon. You know, when you think about Elon, in his mind, I Don't know if you listen to the Walter Isaacson work that he did, but he said one of the most special things about him is, like, the detail orientation he applies to systems machinery, systems thinking. And I'm like, I think Elon sweats the details. And I think some of the best do. How do you balance sweating the details but not being too control freakish?

I'm not an expert on this, but I think, okay, I will tell you the one thing I learned from Elon. So Sequoia has an annual. I call it a glamping event. And Dharmesh and I, I would describe us as indoorsy, not outdoorsy. And so they invited us to the glamping event. And we were like. We debated it, like, should we go? It's glamping event, but great speakers. It's gonna be really good. So we went. And I'll tell you a funny story about it, but it's the first glamping event we went in. The first night, Harry was freezing cold, freezing cold. And it was freezing, and we're intense, and I'm like, God, why did I come here in my. And my tent mate was John Collison from Stripe. And I just remember I was so darn cold that night, I was tempted to be like, hey, John, should we just cozy up here so we don't freeze to death tonight? I fortunately resisted that temptation, but I've never been as cold. Anyway, the next day, Elon spoke, and I remember his presentation. He probably would forget it. And he spoke about vectors. So he's a physicist, and he thinks about vectors, their power and their strength. And he talked about how organizations have all their people are different vectors. And in most organizations, you have some strong vectors, really strong employees, and some less strong employees. And in most organizations, your vectors are pointed all over the place. And he's like, the one thing he focuses on, if he's detailed about, it's just trying to get all those darn vectors pointing in the same direction. Small vector, big vector, but all pointing in the same direction. And I kind of think about it as inside of HubSpot, there's 8,000 people. And if everyone's pointing in different directions, you add, let's say 8,000 is each a value of one, and they're all pointing each other. You get a value of zero. But if you get them all pointed in the same direction, the value is 8,000. How do you get as close to 8,000 as you possibly can? I remember that clearly from him. So I think he's in detail on Certain things, but certainly not everything. He's CEO of X number of companies. I can't remember five, six companies. He can't be completely in the details and everything, but he's in the details on systems thinking, types of things like that.

It's funny because I went to a Sekora event and John was my tent mate and he actually suggested spooning. So Sean's gonna listen to this and be like, what the. My. My question to you is just on that, like the vectors, what does that actually mean? Brian? Sorry, does that mean like set a North Star and align everyone to the same goal? Or. Or is it like make everyone have the same similar broad set of skills? You don't want that because then you'll have weaknesses that aren't covered. What does that actually mean in reality?

I think it's really underrated. And I see these startup. I spend a lot of time with founder, startup founders who are CEOs and want to go from startup to scale up. And I think a big leap for HubSpot was when we got on this vector bandwagon and we got into a planning cycle where we can be like, here's what our mission is. Let's not change that or change it rarely. Here's what our strategy is for these this year. Here are the main initiatives we're going to work on for this year. Here's how we're going to track them. Here's the infinite number of initiatives that are proposed and people are kicking around and talking about and want to do in their pet rocks that we're not doing this year and we're just going to ignore them for another year. Once we got some discipline around that, then the vectors got aligned, the company worked a lot better.

Sorry, I'm still laughing about a collison tent. I mean, that really is an interesting one. I think we mentioned that kind of my directness in terms of my feedback. And then you mentioned listening to the Scott show from Atlassian. I speak to you and I honestly look at other CEOs, read about other CEOs and go, I should be like that. I should be like that. And you said before, you know, be yourself. Well, actually, I think it was Ernst Hemingway, to be fair. He said, be. You know, plagiarism is a friend unless you're Bill Ackman. Be yourself because everyone. Because everyone else is taken. Did you always know the leader that you were? And can you take me to a time where maybe you didn't?

I still don't, Harry. I still really don't. Yeah. One thing I've learned about CEOs, they're all very, very different. And there isn't one model or one formula or one background. I've tried to look at different CEOs and come up with a rubric of like, this is what you look for. Here's the five questions you should ask a founder to tell if they can scale as a CEO. I haven't come up with that yet. In my. I had, I had three CEOs prior to starting HubSpot that I worked for. One of them was an inspirational sales leader. One of them was a very detailed finance venture type person. Another was a product visionary. They could not have been more different in background and demeanor, in leadership styles. And I tried to take the best from all of them, but I was just struck, as I look back at how different they all are. So I don't think there's like a playbook or criteria that this is what a CEO should be like. I'll tell you another story, Harry. When we had about 20 employees, I joined a CEO group. By the way, if you're a CEO, there, CEO groups are incredibly helpful. And I joined one in Boston. It was called the High Growth CEO Group and there were nine members of it and they were looking for a tenth. And I interviewed to join. And I largely wanted to join because one of the members was a guy named Colin Engel. And you wouldn't have heard of Colin, but he started iRobot, the room of vacuum cleaner. And I would describe my relationship with Colin in, in two words, man crush. I really thought he was amazing. He was an MIT guy, started a company, it was public, it was a high flyer at the time. And I just wanted to learn from him. And I, and, and, and there was another guy on there that had started a company called E Inc. Called Russ Wilcox. And that was another high flyer that you wouldn't have heard of, but they made the screens for the Kindles when the Kindle was first out. So it was on fire. And then there were a bunch of other CEOs of other kind of random companies, but I really like those two guys. And seven of the CEOs were hired gun CEOs from the outside, kind of been there, done that. And two of them, Russ and Colin, were founders. And I remember at the time, 20 employees in. I wanted to seem like a CEO, I wanted to act like a CEO, and I wanted to be, you know, central casting. And what I noticed in those meetings was two of the companies were incredibly successful, seven were kind of going sideways. The two were successful. Were founder CEOs. And those founder CEOs were really frigging quirky. Like super quirky guys. And they're great. And the other guys acted like CEOs. And I was like, I'm quirky inside. Maybe I can just be quirky like these two. And so I tried to start being myself after that and it paid off. Trying to be somebody else has a lot of overhead to it. Those two had a big influence on my career.

I love that. And I totally agree with you on the quirkiness. I think. I think.

By the way, I'm just gonna. I'll save you the Wary of your. Like, are you quirky? You're quirky.

Me?

Yes.

I am not quirky. I do want to learn from you though and kind of start at the talent funnel. Hiring is something that I would say is my biggest weakness. Honestly. Actually Brian, I hire amazing people but I have a low hit rate. So like 50% workout was the review that we had. I hired 10 people in the last three months. Five stayed in three months. What are your biggest lessons on how to hire the best talent and what would you advise me?

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

What are the biggest hiring mistakes you made? I'm a big one for falling for logos 1 and then I also am impressed by it sounds stupid but like big words and smart thoughts. And I don't often check the foundational skills enough.

Okay. I would kind of frame it a different way from the logo per se. I. My analogy for being a founder CEO trying to go from startup to scale up is it's like you're climbing a mountain and it's very icy and there's like an ice cliff in front of you to get to the top. And I think what. And you're trying to. You get your pick and you're Going up the mountain and it's treacherous and most people fail. There's a reason they fail. It's really hard. And where I think people fall down in hiring and they, when they're hiring board members that are hiring tech team members. It's not just the logo. It's what you want is somebody who's three years up the ice cliff from you, who struggled through that same path. What you don't want is someone who's 10 years beyond it or even worse, somebody who's never really climbed that ice cliff. They started their career on top and stayed on top. And so it's not just the logo. Like, I think it's okay if you hire someone from a much, much bigger company, if they have climbed up that ice cliff and they have seen the lessons and, and I'll give you a great example for HubSpot. We hired a board member a long time ago whose name is Jay Simons and Jay was the COO at Atlassian. You had the Atlassian founder on your podcast.

I know Jay well. I had Jay on. He's a absolute legend. Yeah.

And he was, he still is on our board. He was three years ahead of us on the ice cliff. And you know, HubSpot's whatever, 2 point something billion revenue, they're for something. And they were a few years ahead of us on the ice cliff. He had just seen everything already. So he's on the board. We're having an issue. He had just solved that issue or just dealt with that issue. And so that recent relevance was incredibly valuable. And so that's what I would encourage. And so like at HubSpot's hiring today, we're looking for a board member. I'm pretty skeptical of hiring someone who's been in Google a long time or Microsoft a long time. But if I'm looking for somebody who said ServiceNow or Intuit, and yeah, that's pretty interesting to me. So I'm looking for somebody a few years ahead of us.

Would you hire someone if you had reservations about them? I'm asking specifically. I'm hiring someone potentially now. And I'm like, I do have concerns.

But I don't think I ever hired anyone where I didn't have some concerns.

There's always red flags and you just got over them. How often did those red flags materialize versus they didn't.

They usually did. They usually did.

You mentioned, you mentioned, you mentioned the quirkiness. Yes. I'm quirky too. I also work really hard and I drive a very intense culture of hard Work that's not very popular in modern society with younger people. How do you think about like founders who are quirky, showing their quirkiness in hiring? Do you know what I mean? I don't want to put people off by being too quirky up front.

I think you have to be yourself. You have to, you have to shave off a little of your hard edges. Probably I had to definitely shave some of mine, but I, I was very much myself and I think it attracted a certain type of people and it definitely repelled a certain type of person. Like you spent your career at McKinsey. You come in and interview with me. You're probably not that interested in working for me. You're probably not and that's fine. Now I think you fall in a trap where everyone's similar, but I think you will it when you're. I would be surprised if anyone you hired didn't have some red flags. Yeah, I would be very everyone. And we hired like, well, they've got some strengths and some weaknesses. I think we're people. I think we're scale ups fall down on hiring and founders fall down on hiring is. You've got, you've got a panel of people who are interviewing a VP from. For. Of whatever, of products and you've got 10, eight people. Interview them. If you've got candidate first candidate Mary gets four, four out of ten, four out of fours and gets four, two out of fours. And so it's mixed. And then you've got Jane who's got eight, three out of fours. You always hire the Jane. That's all that's just always happens. You always have the Jane. I think you're better off with the Mary. And you want kind of spike a spiky team with some people who have great strengths and great weaknesses and you want to spike in different directions. I think you want to avoid that lowest common denominator type of hiring.

I always actually say that to LPs. A lot of LPs ask me about manager selection and I say like you should invest in the ones where it's like, they were terrible. They never responded to an email. But they also had Brian saying they transformed my company and I couldn't have done it without them. That's no manager I want to get behind.

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

Do you think speed of response is a feature? Not A bug?

I do.

How do you manage it though, Brian?

Like, I mean, okay, this is the Iran part because I'm not that good at this. So I, I, we were just talking about like reflection and I don't do New Year's resolutions, but every quarter I do a quarterly plan. So I kind of grew up in sales. So the sun rises and sets in the quarter for me. So I just wrote my quarterly plan and I typically get about half of my quarterly. I've got like six or seven items on there and so I sit down and do those quarterly plans. Now the tricky part with working with me is if something's not on my priority list or my quarterly plan, it could be weeks or months before you get an email response from me. But if you happen to be engaging me on something that's on my quarterly plan, I'm back to you in half a second, so I probably am, I would, I would be, yeah, there would be red flags. If I were hiring me, I would have some red flags on that.

Okay, so we have some, I would.

Say about prioritizing Harry is I think too many people run their life through Slack and through their email and that's everyone else's priority list imposed on you. And so you're really just spending your whole time working on everyone's dues and you have to do something out, of course. And people just don't spend enough time like, well, what am I trying to get done this month or this quarter, whatever it is, and like have their list and like I need to make progress on my list today, not just be responding to everybody else's emails. I think the way email and Slack and text works is you're just very reactive.

Brian, what's on your list today? You're not CEO of HubSpot anymore.

Okay, you wanna know?

Yeah.

My list today or this quarter?

You choose.

Okay, let's have a look. So this quarter I have some things I don't want to tell you about on there.

Shared tent with Patrick Collison.

No, I do want to get married. I've never been married. I don't want to get married this quarter, but I want to get married.

Are you dating?

Yeah.

One woman.

This is part. We're not going to get into this. Okay, so I'll just say, why do.

You want to get married, Brian?

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

Like what sort of thing if you don't.

Okay, I'll give you one. I absolutely crushed my back last quarter moving a couch, and it was like I had a knife stuck in my back and I don't want to do that again. And so I go to pt, I'm doing yoga. Like, I'm obsessed now with my back and it's much better, but I want my back to be. It's like. Okay. I think of it as like, you're redoing a house. You've got the crappiest room in your house. You want to go in the crappiest room and make your crappiest room your best room. And same thing with your body. Okay, My back is the worst part of my body. How do I make it go from the worst part of my body to the best part of my body? So, like, that, for example, is on my list this quarter.

Okay, what else?

Okay.

Improve your back.

Okay. I don't know if I want to tell you any of this shit, Harry.

Don't worry. It's a judgment free zone.

No, I'm not going to tell you anything.

Okay, listen. We do quarterly planning. And do you review them, by the way? Like, do you mind?

Every morning I look at my quarterly thing, I'm like, I'm actually working on the important stuff or am I working on the big stuff or am I working on the little stuff? Am I working on every else's stuff or go to my own stuff?

Do you mind if you don't hit them though, like you said?

Okay. I typically have like a 50 hit rate. Some of them are hard.

Do you carry them over if you don't hit them?

I sometimes do. I sometimes kill. I kill them. Sometimes they become habits. So some of the things I put on my to do list are habits that aren't for them. So last year a lot of them were about work out every day. Now I work out every day. It's a habit. I do it every morning. I don't have to it put. Put it on my, you know, goal list or eat in a certain way, that kind of thing. That's. Take certain supplements. Some of that is all kind of baked in now.

Yeah, no, I get that. Okay. Going back to the hiring and the talent retention element, I don't think people.

Really care about that kind of stuff. Like, why would someone care about my quarterly plan?

Oh, they know. They absolutely do. Because if you think everyone wants to be their best selves and everyone wants to improve in some ways, I don't do. I don't do quarterly planning. It'd actually be quite helpful. Brian. I'm pulled in every fucking direction and I end up probably misusing a lot of my time actually every day to go, right, this, this and this. That is my job. Yes, pretty helpful.

So that's super helpful actually. Yeah, maybe you're right. It's super helpful. I started doing it a couple of years ago. It's been. It's been huge.

Also, I think people forget this with like content and shows, which is like, yes, people want strategy in theory, but they also want who you are, you know, I think this is why shows with venture capitalists are very difficult. Because, you know, the venture capitalists don't even know who they are, so it's difficult for them to say it on a show.

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

No, but you can pay $300 an hour and your therapist will tell you if you're me. Can I ask on the talent side though? The thing that I struggle with is actually letting people go as well. I mentioned I'm quite good at being direct. It sucks letting people go. What's been your biggest lessons on how to let people go the right way?

Okay, I don't have a great insight beyond platitudes of this, but I will say that the most frequent reason I let someone go and the most common failure condition is I kind of think of this equation of are people solving for themselves for their team or for the enterprise? In the failure condition for people scaling up in their careers, your vp, your first time VP or whatever it is, they don't solve for themselves. Almost never do they solve for themselves. They're solving for their team and they're optimizing for their team. And while they're optimizing for their team, oh, by the way, they're sub optimizing for their neighbor's team. And that, that's the number one failure condition where as we're scaling up a VP or a director or whoever just isn't doing well and their team's giving them feedback, they're not doing well, their peers are giving feedback. That's the failure condition. Solving for their team over the enterprise.

Solving for that team over the enterprise. Do you think they know that they're doing that?

They definitely get feedback. On another thing, I would say this is a little depressing, but we do net promoter surveys for the whole company. We've been doing this for 15 years, where once a quarter, we ask every. Every employee, scale of 1 to 10, how likely are you for HubSpot as a place to work? And then. Why people write novels on that too. And we track it, and then we track it by department and. And the scores move around by departments. They can move around a lot. And so let's just say you've got a VP of marketing, and their net promoter score for marketing is like, 55, 65, 58, 59, then, boom, 30, and some feedback on that VP. And so we package all that up. We give feedback to the vp. Oh, you're solving for the team over the unprepared. Blah, blah, blah, blah, blah. And they work on it. What I found, and it's a little depressing, is you put somebody on a recovery plan, more often than not, they don't recover, and we end up parting ways with that person. Once they've lost their team, they almost never can get that team back.

Do you agree? When there's doubt, there's no doubt. Max Levchin told me that.

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

When you doubt someone's ability to do a job, there's no doubt that you should let them go. Never before have you been like, gosh, I really. I don't think Brian's got it. And then actually, you were wrong. And Brian has it. And he surprises you massively in a year's time.

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

Hmm. For me, it's the hardest thing. Do you have any tips on actually how to do it? Like the words that you use in terms of letting people go? The words use the setting. Do you have other people in the room? Anything not to say?

I don't have anything beyond the obvious things of do it live, not on zoom, don't have anyone else in the room. Be empathetic, be fast.

Yeah, you mentioned that. You mentioned that.

And if it's. If it's a surprise, it's your fault.

Yeah, you mentioned the MPS there. HubSpot is always hailed. And I've listened to. So, like, you've done shows before. I've listened to all of them, by the way. And people often ask about, like, what was HubSpot's magic about the culture? And kind of the fourth time I was like, God, I wish someone would ask, when did it go wrong? And what did you learn from it going wrong? There's always a time in a company to actually write. It breaks.

It broke around the hole. You go from knowing everyone in the organization, knowing a bit about their background, you interviewed everyone to gosh, you just don't know some of the people. It goes from very flat, like there's no layers or there's one layer to like there's two layers in there or true layers of management in there. It starts slightly to go from everyone's missionary to there's some mercenaries and so there's something about 100ish people, 150 people where most CEOs I talk to. Something kind of changes in there. And we started getting very serious about culture around that time. It was, it was shaky in there. And then we started getting quite serious about writing down what our culture is, trying to embed that in our interviewing processes, tracking it with net promoter scores, being very transparent about what those scores are, what feedback is, working on all that stuff. We got very serious about culture and over index on it for many, many years and got, I think we got, I think we got quite good at it.

Brian, a mercenary is bad if they're pointed in the same direction.

It just. Okay. I think most of your employees are mercenaries. Post 20 employees, largely mercenaries. And I think it's fine. You know, I think, I think, I think missionary and companies have unfair advantages in that they're able to attract better talent, retain better talent. I think people today have lots and lots of opportunities. Like the unemployment rates are quite low. Generally speaking, very talented people have lots of opportunities. Humans are quite mission driven these days. Do you think so?

I mean this in the nicest way. Do you think so? If we think About HubSpot, empowering SMBs to do more, creating opportunities and jobs respectfully of the 7,000, how many people are like, yes, I'm empowering SMBs today.

First of all, our mission is enabling millions to grow better. So not grow in a crappy way like creating spam and cold calling and advertising of people. But like how do you, how do you market and sell in a. Really match the way you market and sell with the way humans actually want that to happen. And so I like our mission, really like our mission and I'm personally motivated by it. And I think some percentage of the employees are but like do are all of them. Definitely not. And it's okay, you know, that's okay. But I do think a decent percentage of them are. I don't think though, like, okay, let's say 7,000 employees and X percent are very motivated by the mission. Let's say we're at 70,000 employees. Is that 7x? I doubt it. Yeah, I doubt it.

How do you think about like, oh, only hire a star players? I'm like, when you get to 7,000 people, by very nature of A, you can't have that many a star. You just inherently have to have B and C team players at that stage. Is that fair or am I being unfair?

I think these sneak in, you got to keep the C's out. And I think companies need to have good review processes and good feedback and have to move their. They have to move people out if they miss the hire. And I think good companies do that.

Kind of speaking of people around you, Sequoia obviously led around. Can you talk to me about how Sequoia came into the fray and what that looked like?

Sure. Sequoia was a big help to help by the. So I remember. So we're a Boston based company and Boston based company is like no one gave us a hoot. I mean we would go out to the west coast and raise money. I remember the fundraising trips for Dharmesh and I. We get on the plane, we're all fired up. Like we got this. We got 20 meetings in sand Hill Road, up and down Sand Hill Road. And then I remember getting on the plane on the way back, we're both somewhere, just get crushed up and down Sandhill Road. In this one particular trip, we had like whatever, 17 meetings with DCs and got 17 nos in a row. Our last meeting was a guy named Jim Getz. Jim Getz is kind of a legendary VC at Sequoia. So remembers Dharmesh wasn't with me this time, sitting in a conference room and I was nervous. You know, Sequoia, it's like the center of capitalism, Sweaty palm, sitting there waiting. Jim's kind of a legend. And Jim walks in and as I'm shaking his hand like my hand is moving up and down like this, he says to me, hey, Brian, what's it going to take for Sequoia to own a piece of HubSpot? And I said, really? Not much. Just give me a term sheet. I'm ready to go. I had no other options. And so Jim kind of shook my head. We spent a bunch of time with Jim and then he handed me off to an up and coming partner named Patrick Pat Grady, who I think you know and super nice guy. And I thought we would have a term sheet and we'd be done in a week. And Pat Spent the next three months going through unit economics, through just every line of every spreadsheet. And I'll tell you one funny story about Pat. So we're in Boston and he wanted to talk about how we calculated CAC or something. By the way, during the time he dug through all that, he figured out we were calculating unit economics wrong and he got our head straight or a pricing model. He fixed a bunch of stuff during that. But I thought Pat was going to say no as he went through all this. But my Pat Grady story is, and I think this is part of why Sequoia is successful, is he texted me and he said, hey, you got time tomorrow at 10? And I said no, I'm tied up at 10, how about 11? He's like, no, I can't do 11. He said, how about nine year time? So I can't do that. He said, how about seven year time? And I said, well, usually just waking up, but sure. And then I thought about it, four o' clock in the morning, his time. I was like, Pat, do you have a life? Anyway, we had that meeting. Pat was incredibly helpful and Scoi was incredibly helpful, sort of rethinking our pricing model and our unit economics and really got us on a good path. They were really good. But that was the process with Sequoia. Handshake with Getz really was engaged. Pat dragged us through the mud, eventually got to yes and then we did the deal.

To what extent do you think Sequoia is a needle moving event when they invest in your company? A lot of people say like, oh, it's really all down to the founder. I mean, at the end of the day, cash is cash and sure it helps a little bit with brand, but whatever. Or is it actually no, it really is a seismic help for us.

It was huge. It was needle moving big. It was a big. One of the biggest needle movers. It was, the brand was huge for us. They helped us with our business model a lot. Pricing model two, their network, they do something or they did something cool back then, they call it the Sunrise tour. So once they make the investment, they invite the leadership team to come. Just meet everyone in the Sequoia community, all the right people at LinkedIn, at Google, you name it. And so like bam, your network gets three times bigger when they become an investor. So they were kind of huge for us.

I love that Pat though. I always do calls with him. I think we have like a monthly call and it's always at like 5am and he's already done a workout and I'm like, what the fuck is wrong?

He's a machine. I think they all are, by the way.

Is that what you think makes them successful? You've worked with them for years now. What if you were to say what makes them successful? Are you an LP in them? I know I am. Yeah. So we both are. What do you think makes them successful?

Okay, I know them quite well. I think there's a network effect in the venture business, of course. So they have an unfair advantage in that. They did LinkedIn, they did Apple, they did all these companies. So they have that network and they have all that knowledge and they have that brand. And so in some industries, brands more valuable than others, it's very valuable adventures. So that, of course, is given where I think they're special is they don't take any of that for granted. So there's a whole new crew over there that runs it, Pat and Rlof. And they're paranoid. They don't want to lose that mantle. They know they have something fantastic that Moritz and the rest of them Dug Leone gave them. And they work, like, really work. So they work much harder than any other VCs I've come across. And they're absolutely paranoid that they're going to lose it. They're also. There's something in their genetic code where I think this works for them, but it can be depressing if this is in your company. They don't celebrate their successes. They beat themselves up for their failures. Really beat themselves up for the failures. And I think they kind of dwell on their failures and they don't want to repeat those failures. I. I think. I think there's something in the culture there that will sustain that competitive advantage, at least through this generation. It's very. The current crew is really good.

I think the current career is fantastic. I agree with you also on the work hard. I've never seen ethic like it. Fucking love Doug. Anyway, can I ask another slightly personal one, but I heard that Sequoia bought some stock off you and it was one of the most costly mistakes you made. Bluntly. Can you take me to that why you sold and just the decision making for you then?

Yeah, it was sort of Series D. It was. I forget how much they invested. Call it 40 million 250 million valuation. Like I said, if they didn't do it, every. All 17 other VCs had said no. And so we were very grateful they did it. And when they were doing it, okay, it was a complicated round because salesforce.com invested and Google invested This is before they had like big venture arms. So there just wasn't a lot of room in there. And they came up with the, I thought a clever solution which was we'll buy some of the exec team and founder shares, which is very common today. Of course, buying secondary, it wasn't back then. And so they bought it. And if you think about that, I sold some shares at a $250 million valuation. Now the company's worth 100 times that. But I would also say I don't regret it at the time. I don't know how much it was, call it $1,000,000 relative to my current net worth. It was very much a life changing event. And so people think about the time value of money. The time value of money and they think about, okay, you have 10 return on it. That's not how I think about it. Like a million dollars then was so much more valuable to me than today, let's say. And so it was very valuable to me. It was very valuable to Sequoia. And they was smart of them because they were nervous we were going to sell salesforce.com salesforce.com made an investment. They did not. They were not thrilled about that idea at the time because they were worried Salesforce would come in and buy us at whatever at 2x and you know, Sequoia wants to make a 10x. And so they come up with that clever solution. I think it worked for them because it gave us a backbone. It moved our horizon from like two years out to like 20 years out and really let us plan for the long term and have a strong backbone if someone did come in and want to acquire it. So it worked for both of us.

What advice would you have for founders who are considering selling some secondaries?

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

What was the most tempting opportunity to sell? I'm sure there were many.

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

I have, I have lots of my friends from school. You must have so many girls that hit on you. How are you like richer, better looking? I used to be very fat and I'm like, nope, that never happens. Be a nice change. Can I also. We mentioned Pat. We mentioned our love for Pat. I definitely have an insecurity and people throw shit at me on Twitter. Brian for commenting on operations without actually having had a career as an operator. I vehemently argue back that I'm building a media company. We have many people in the media company. It does millions in revenue. To me it is building a company, whatever that is. You said before about the importance of investors have been former CEOs and former operators. Why do you think it's so important that your VC has been a former operator or CEO? And can you just take me to that thinking okay.

I remember when we were starting HubSpot we wanted VCs who had been CEOs and by the way, most startups don't have a choice of like 20 term sheets. We certainly didn't. But if we had the option of having a VC who was the CEO before that was, we would go with that. It was A plus if the terms are the same and our A and Our B were VCs who had been CEOs before. Pat had not and he did the D and he had an observer seat. And I would say Pat was relatively quiet. But Pat figured out ways to add value that were super useful around benchmarking relative to every other tech company in the world, network with every other tech company in the world and really geeking out early on unit economics for SaaS companies. So he found ways to add value where he didn't stick his nose into operational details per se. So I think, I think both can work. I think the reality is there's very few VCs today who are been there, done that, CEOs who have built big companies. I just, there's very, very few of them. So I don't, I don't think you can have that criteria anymore.

And I actually don't think it matter. And so what I. Let me just unpack that. If you were a CEO before COVID very different approach to work, different generational kind of thought process around what motivates them. Pre AI, very different, pre cloud, very different. What it takes to be great is so different you can playbook and templatize it. It's fucking different. Doesn't matter. And so actually are they a good source of cash? Are they supportive and won't throw you off a board when it's a shit quarter? And do you like working with them? I honestly say that's my. If I do anything on top of that, great, let's have ice cream. Like what a win. But honestly, I don't buy the like, am I being wrong?

Well, I think it's important if your VCs haven't built companies before or their pattern matching is light, they're new. Having a great independent is worth his weight and goals. So we were early. We had two founders on the board, we had two VCs on the board. We had a terrific. Our first independence woman named Gail Goodman that people wouldn't have heard of but she started. She was the CEO of Constant Contact, which at the time was a real high flyer and she had real operating experience that was relevant, timely. She was a couple years up the ice cliff from us and the thing she had that was useful is the VCs would get on me like really grinding me about something, not growing fast enough, burning whatever it would be. If from time to time, if they were being too aggressive with me, she would sort of back them off. They were a little bit intimidated by her and that was very, very helpful. She gave us great operational stuff. So having other people in the room who have seen the movie is useful and I would push back a little. Yes, everything is different post Covid. Yes, everything's different post AI. But building a team, raising money, how do you build a category? How do you build a go to market machine? All of that, that transcends across from the friggin 1990s to today, so much of it. I don't think things are totally different from pre Covid to Covid. I don't think things are totally different than pre AI to AI.

Do you think the VC product is good today, Brian?

I think it is. I mean at the end of the day they're selling a product to their LPs right? They're the customer's kind of the LP actually. And 5% of the VCs are incredibly successful and 90, you know, 90% are meh. In a decent or a lot of very few are really successful but they're so successful that the category writ large does pretty well. So from that perspective, I think it's a good category. I continue to invest in it. If you look at it though, the small VCs are the ones where the, where the alpha is not the big ones. And VCs, there's a tendency to get bigger, but in terms of the offering to their other customer, the founders. When we did our Series A, it was a $5 million round on a $6 million pre money value valuation. So we sold 47, 70% of our company on Series A. That was standard, Harry.

That was like, where was the business at then?

We had half a million dollars in revenue growing fast, or maybe even a million. It was, it was doing all right. And it, you know, it was in a whole new category that no one really understood. Like who did that deal, General catalyst.

They killed 5 million at 6 million.

Yeah, we had three term sheets and we're all right around there.

I'm not surprised. You had three term sheets.

Yeah. Yep. And so I know we've had a bubble in 20, 21 and whatnot, and it's, it's popped. But even today you're doing a Series a in on a four. I mean, you're not really, you're not diluting 40% on your, on your round.

Do you think, do you think Vantia is broken, though, in the way that you are incentivized to scale a lot of firms at AUM gathering and asset managers, and we've moved, as Douglioni says, from a, you know, a high margin boutique business to a low margin, highly commoditized industry.

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

How did you think about that? You're investing now?

I have an angle.

You know, we're doing a $25 billion company. It's a pretty good angle.

I don't even think that's enough in the angle. Like if I were to go in and try to compete with Andreessen Sequoia, with all those folks, I don't think that's a good enough angle. My angle is I start a climate fund investing in ocean startups. And the reason I did that is because the ocean's absorbing much of the carbon dioxide today and it can absorb if you're careful with it. Much, much more. And there wasn't like a real ocean climate fund out there. And I wanted to have an impact on, like, that's where I'm going to spend my money. And so we become like a magnet. If anyone's got an ocean tech startup, you know, they come to us.

Final one. Before we do a quick fire, you mentioned, like, 17 VC meetings, 17 nos. What was the worst VC meeting you had?

Okay, it's with a firm here in Boston, a storied firm, and it had a storied founder. And we had pitched one of the partners several times, guy Jeffrey, and he was interested. So we came in for the full partner pitch. And the founding partner was a little rough. And anyway, he sat next to me. I hadn't met him. He's kind of a legend. And I've done a lot of venture pitches. I had it down. Just say, I'm lively in the pitch. And he fell asleep. He felt fucking sound asleep during my pitch. And they sat next to him and I kind of nudged a Cher woke him up. And so we finished the pitch. And I remember Dharmesh and I looking at each other, well, I guess we're not getting a term sheet from these folks. And then ironically, they went away and came back and gave us a term sheet. That's strange. And then we got the term sheet, Harry, and it came through. Fax is a long time ago. And we got it, and I quickly looked at it. I was like, oh, it looks decent. Send it to my lawyer. And within five minutes, my lawyer called me, which was unusual. And he said, I saw the term sheet. And I was like, yeah, how's it look? He's like, did you see the pool? And I said, I didn't really take a look. Remind me what the pool is again. This is our Series A. He said, oh, yeah, it's the amount you. You're holding aside to hire people. He said, did you see the size of it? I said, no. He said, it's 22%. And I said, okay, is that normal? He said, seven or eight is normal. 22 is a lot. He said, why don't you call him and ask him about that? Hung up the phone, call Jeffrey. And I said, thank you, by the way. Thank you for the term sheet. Very surprised we got it after the fact. Fell asleep, but thank you. Just out of curiosity, why is there such a large pool? He said, well, just in case we need to replace the CEO. I was like, I'm the CEO. When were you going to tell me that you were planning on replacing me. He's like, well, there hasn't been a good time up until now, but why don't we talk about it? So that was a bad, that was sort of a bad experience with me, with the founder falling asleep and yeah, they wanted to replace me.

And so you said, where's the DocuSign? When do we stop? I've been wanting to get out of this since the start. Oh, baby, you could have saved yourself 17 years. That is amazing. Listen, I want to do a quick fire. I've so enjoyed this, but I'm going to say a statement. You're going to give me your immediate thoughts. Does that sound okay?

That sounds fabulous.

Okay. MBAs are ridiculed today. Do you still think they're worth it?

Okay, I'm going to give you a snobby answer.

Great.

I got three things from my mba. I got a lot of knowledge. I had a great network, including a co founder and all our angel investors. And I got some pedigree. The truth about an MBA is.

You.

Can get the knowledge from any mba. It's the same stuff they teach at every MBA program. You can even get it online. Now you only get the pedigree and the network from top tier MBA programs. So I think it's worth it if you go to a top tier MBA program. I would also say I don't think MBA programs are breeding grounds for founders. It's a relatively like if you're doing the decision tree on your career and you decide to do an mba, it's a pretty risk averse move. It's not a risk seeking type of a move. And so I don't think MBA programs are breeding grounds for great entrepreneurs necessarily.

Speaking of breeding grounds for great entrepreneurs, are people born CEOs?

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

What was the most poignant near death experience for HubSpot? When you reflect back, way back through the journey.

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

What did your investors say?

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

What changed?

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

Did Figma kill the M and A market?

It killed part of it, I think. Or maybe killed part of it. It let's say you're a scale company and you're looking to buy business for 20, 30, $40 million. It's not just that it might not get approved like Figma didn't, it's a 15 month cycle to find out. And so it used to be you're doing an acquisition is three or four months now it's like a good 15 months to get through the US, get through the UK, get through the EU. And so all that time a lot can change. So I think you've got to think long and hard before for doing a good sized acquisition. Having said that, I think the smaller M and A market's going to be wide open.

Well, I think to that point though, FIGMA today correlates to about a $30 billion price with the appreciation of Adobe's stock price. If you actually think about that, that's very disincentivizing for large players given NASDAQ's rocking. The fact that you could end up paying double for an asset that's actually only worth half. I'm not saying that of figma, but of any appreciating stock market price that's the way it would be. That's not very encouraging. Why will smaller M and A be wide open? Like, why would you bother, Brian?

I think a lot of companies are going to have to sell. They're going to get stuck.

But who's going to buy them? Like it's going to get blocked. Private M and A, private to private. Which board members are like, oh yeah, blow up your headcount by acquiring another company.

I don't think they get blocked. I think you're doing an acquisition under 10 billion. Unless it's super strategic. I don't think it gets a long look from the regulators. I think those flow through and they happen pretty quickly. Like we just, we just bought a company and it was a couple months. It was, it was Fast. It was $200 million deal. So I think more of those happen. I think VCs, I think they'll be very happy to sell their company to a HubSpot or Atlassian or Dropbox or you name it, or even a bigger company. I think Microsoft can buy companies or Google that are 5 billion or less. I think those go through.

Why, why do you think the IPO market will be wide open?

I think it's just correlated with, with nasdaq. I think the. There was this weird bump that happened in Q4 and it's come down a little, but Nasdaq's up. You look at stocks like HubSpot like it was running along kind of in a normal path. The market cap went up to 40 billion, back down to 10, it's at 28 now. Like we're not an asset, we're neurosuction. But you know, the tech public valuations are decent. So I think it's a decent time. If you're stripe or you're, I don't know, any number of companies, Reddit. I think you get a decent valuation.

I get you. I look at like, look Jeff at Twilio and I'm like, fuck. That's a brutal one, isn't it? You get an activist investor.

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

Okay, final one. Where is Brian in 10 years time with 20, 20, 34.

Okay. I.1 thing I like to do is I like to spend time with founders, CEOs, startup CEOs, that want to be scale up CEOs that want to go through that journey I went through, and I like helping them avoid all of the mistakes I made along that journey. And I do that with my climate fund. I do it with, like, Sequoia. I'll do that with Sequoia founders. And I enjoy it. It's sort of a hobby. And I feel like I'm giving back to that founder and giving back to the universe a little bit. So I, I want to do more of that. I think it's quite enjoyable and a good thing for society.

Brian, this has been one of my favorite shows to do. I knew this.

What do you mean, one of.

Yeah. Pat will always be my number one.

Thank you for having me on.