Dharmesh Shah explains how HubSpot's founders pitched investors using comparables from other software companies rather than a specific valuation target. They bet that marketing, shifting from arts-and-crafts to data-driven work, would eventually support a $100-$500 billion software company.
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When you were starting the company, did you have a number in your head where you're like, I think this might be a billion-dollar company? We didn't have a specific number in our head, but we had, I'll say, comparables for lack of a better term, which is, okay, there are successful software companies that have done similar or related things. Either they're in the same market or target customer base. And this is what we told to VCs at our pitch. We're like, in the history of software, no one has ever really built a $10+ billion household name, global brand marketing software company. And the reason companies have not been built in the marketing tech space is because marketing is an arts and crafts kind of discipline, but it's not the kind problems software solves. And our belief was that marketing was increasingly turning into the kind of thing software does solve. Lots of data coming in, you're trying to make decisions around all this stuff. And so our thesis was that someday someone will build a $100, $200, $500 billion software company that's doing the thing we're trying to do. Do we think the odds were relatively high that we would pull it off? No. But did we think there was an opportunity to do the kind of thing that you're talking about? Yeah.
