HubSpot Co-Founder Brian Halligan on How to Hire Great VPs and How M&A Really Works

I'm obsessed about executives not joining startups today that don't know the product. This is the problem I see today. All so many veterans that work 10 years wherever, they don't really learn the product before they start. If you don't know the product, how can you survive? It's just brutal, right?

One of the things we did at HubSpot is when we hired a new rep, their training wasn't sales training. Their training was, okay, you've gotta learn HubSpot. Pick Start your own small business, buy a domain, build a website, put your contacts in there, sync your LinkedIn, and do an email marketing campaign. And then the test was after the 3 weeks of training, I would— the test was in front of me. They had to present their business to me and show me their website, show me all that. Yeah. All the reps really viscerally understood the value and really knew the product. I think that helped a lot.

Okay. We've dug into a lot of things. Do you have time for 3 questions on the journey? So Brian did a LinkedIn post and a Twitter that got a lot of engagement on YouTube and others. I'll link to it. It was on the journey. At first I thought some of it might be looking backwards too much, but actually it's all pretty, pretty darn good. I, I'd encourage everybody to read it. A couple of things that stood out, well, a lot of things that stood out to me. Let me pick two out of order. One was something you said that I just think is so helpful, and it was something that Dev from Mongo said years ago at SaaStr that I missed. I just refound it. He said, and he's a great operator, right? VC, the whole thing. He said, you're lucky if 60% of your management team really works out. This was in a conversation with Jody Bonsall. You said something pretty similar, like half, right? And I'll find the exact quote, but it was pretty interesting. And this is, I actually think once you even have $2 million in revenue, all that matters is the management team. Nothing else matters. You think competition matters, But a great head of engineering and product will outpace the competition, right? A great growth marketer will max. A great sales team can punch above their weight class. Is that what you think? 50% of them? What's that?

I would push back on that, but I would say that too. 50, 60%. So I, one of the things I do at Sequoia, I run something called the Kids Table and the Adults Table. The Kids Table is companies between $5 and $50 million growing infinitely fast. The Adults Table is companies between $50 and $500 million growing at least 70%. And I just saw with HubSpot, like, we've hired a lot of its exes. Many haven't worked out. And then they just started asking around the kids' table and the adults' table is similar. So if you are, if you're hiring people and 18 months later, 60% of them are gone, misery loves company. I think it's pretty typical. Now, it might be a little bit of a limit to that, but there is a couple things at least that we're trying at HubSpot to try to get better at it. I'll give you an example. Like, we were hiring a head of revenue at one point, and we had 8 people on the panel to interview the head of revenue, and all 8 people gave him a 3 out of 4. So good, solid, everyone solid on them. And we had somebody else that got 4 4s and 4 2s.

Okay, on a scale of 1 to 4. Yeah, I picked the latter, but I want to hear the story.

Anyway, we picked the guy who got all threes and he didn't work out. And my lesson is, and he didn't work out for a lot of reasons, but one of the reasons is we hired for a lack of strengths, not for— we hired for lowest common denominator. We didn't hire for someone who's spiky. And I think you should hire for somebody spiky. I also think the per— the person you're hiring, yeah, there needs to be at least one person. It's like a venture deal. It's Sequoia. It needs to be at least one person around the table that is, I put a, I gave this person a 4, by hook or by crook, I'm going to make this person successful. And if it's all 3s, everyone's like, ah, somebody else will worry about them. So that, that's one thing. That's one thing we've changed. Yamini Dharmesh and I have changed that. And it's Unless it's 2 out of 3 of us or 4. The other thing we changed is the size of the panel. Like the more people you have on there, I don't know, we just said we're going to have 4 people interview these folks and we trust these 4. It's Arash, Yamini, myself, maybe one other person. Yeah. And if it's, if we got a couple 4s on there, as long as we don't have a bunch of 1s, like we're going to go with it. So we go for, back here, we go for smaller panels. That's, I don't know, I feel like our last 2 hires were excellent. Still honeymoon period, but everyone's feeling really good about them. Those two little hacks helped us. The other hack that's helped us is we just don't hire anyone from Google or Microsoft or a giant company that it's like a different level of abstraction from where we're at and is used to having, you know, a lot of staff and a lot of help around them. Maybe we're still earlier in our journey, but we like to hire people, call it ServiceNow or Atlassian or companies like that. They're a little ahead of us on the journey who have seen the movie recently. We've had bad luck with the Microsofts and the Googles. Not that they're amazing, just like, just didn't fit.

Yeah. Let me ask you two questions about that. So with these refinements, what percent of the VPs, not putting the last two on the spot or anything that you just hired, but what percent do you think can you make successful? Is it higher than 60? Is it 70? Where, what's a, what's a yardstick where it's you, not them? What percent could you expect to work out?

The learnings are relatively recent, like the last— we had a bunch of turnover and it was like, man, we gotta rethink how we're doing this. And those are two of the changes we made. And frankly, Jerry's very much out on this, but we are, we're all feeling pretty good about it. And I do think like when they fail, that 60%, part of it is HubSpot's got a unique culture. It runs pretty heavy on the tracks. It's very much a culture, like a first principle thinking type of culture. So if you come in with like your playbook of how you did it at salesforce.com and we're going to do it here, the immune system will push that pretty hard on you. And so part of it is it, I think it's not the easiest place to join. I think it's an amazing place, but I think, yeah, half of it is the person we hire and how we hire them. But part, part of it is our culture is unique and it's special.

Yes. All right. One other question. Maybe this one's a slightly tough one, but so this has nothing to do with HubSpot. This is my life experience. When you hire the folks to stage ahead, you're like, listen, we want Atlassian in service now. So it's nothing to do with the last— at HubSpot, this is what I saw at my tenure at Adobe. The problem with some of those folks is they're often the ones that got fired. Like they're not like— is HubSpot is more dynamic than Atlassian. I get it. But Atlassian is still. It's not like this. How, when you're with these almost peer executives, right? How do you make sure they're jumping for the right reason?

I, we really try to figure that out.

It's complicated, right?

But we, okay. And we almost never hire somebody where we don't know somebody on the inside that we can really check it. Like anyway, we have, yeah, we, it, we really try to avoid it. What happens a lot?

Yeah.

So right now we're looking for a VP or SVP of FP&A, for example. The woman who left HubSpot got a CFO job. She's terrific. We're looking for a replacement. And the person we're talking to, I'm not saying the company she's coming from, got passed over for the CFO job at her company. The company in question is talking about going public. They want some of you who've been there, done that in the public company. And she got passed over. She wants to be a CFO, blah, blah, blah, blah. And so we're getting her. I like that. I'm cool with that. I'm not cool with somebody who got pushed out. And we try to suss that out.

Yeah, it was tough. It was, I think a lot has changed, but when I was at Adobe, the hiring criteria for a VP, it was impossible. It was to hire a VP and to give them that title, right? At whatever level of VP it was. They had to have been a VP at a peer company. We don't say that, but so what was crazy was you could only hire from Intuit, Microsoft. And so they were always people that got pushed out or fired because I'm going to go from VP of, of SVP of whatever at Microsoft to SVP or whatever at Adobe.

Why?

It just, there are instances, but it's tough. You got to hire the, ask the director or something for it to have a reason to go to. So everyone I've met. Through the recruiting was just fired from one of the peer companies. I'm like, I can't do that, man. All the VPs of engineering candidates they brought in, they were all fired.

They must have. Don't you think they would?

They did. They did. And I thought it was crazy, but I get it. It's just too tight, right? It's, we have to have a standard. So you could come in, but otherwise you'd have to come in as a director or something. No one, demotions are tough too at big, bigger companies, right? People don't vibe the demotion.

Yeah. The other thing I would say about all this stuff is I see it. I saw in every round HubSpot raised, the new venture capitalist comes on board and first thing we need to do is upgrade the team. And I just think homegrown talent is dramatically underrated. Like you look across HubSpot's management, you like, you go to HubSpot's management team now, everybody's been there at least 10 years. Grew up in their career with us, our head of product, our head of engineering, like pretty much everybody. A bunch of them we hire out of business school, out of engineering school. It came up through our farm system. And I think VCs are too quick to discount that. And they get all the context, they bleed orange, like it's— and if you look at Apple and Microsoft, like there's a lot of that. And so I think that's a best practice for particularly for a new venture capitalist that may be I think that's an overrated best practice.

Yeah, I think this is a, I just got two more questions for you, but this is one of the follow-up on this was the home, your theme in the post on homegrown talent, right? I, it's the least risky bet you have, right? Is backing your winners that you have in-house, right? Bringing in outsiders until you have to is so risky.

Super risky.

So risky, right?

The other thing I would say is, okay, you have this director and you want them to become a VP or whatever and put them on a development plan and all that. I'm against conventionalism, but there's a lot of conventionalism out there. It's like you need to develop them and the boss needs to develop them and they need the internal mentors. And I never really, no one ever, I never, no one was ever like, I'm your mentor. He's my mentor. She's my mentor. I never went through like a training program. I just was self-motivated and I like to learn and I tried to get better and yeah, I would ask my boss for advice, but most of my bosses just like leaning on my head. And so I underrate organizations' ability to develop the up-and-comer. Yeah.

Another subtle thing. That I suspect worked well at HubSpot that sometimes people miss is the more SMB you are, the better it works because you get so many at-bats, right? When I look at our old sales team, the first salesperson in at Gong ended up running sales for years. The first guy at Rippling is the CRO today, and they were great, but they didn't cut— they came in as the first rep. And there's many reasons, but one reason is if you're closing 500 deals a year, you get a lot of reps. If you're closing 3 $10 million deals, it's very hard to be homegrown talent, right? And so I think the more SMB you are, the more you should lean on your bench because my God, they know so much in 24 months, right? They know, they get so many at-bats.

You don't have at-bats rep-wise, but engineering-wise, product-wise, CEO-wise, it's probably no benefit there.

No benefit outside. You're right. No benefit outside of sales really.

Yeah. I've been super impressed with how well our homegrown talent has been. And they've carried us a long way. And I look at Apple and it's pretty similar. We model ourselves, the one company we model after is Apple. We're no Apple, but we'd be like, we are, and we try to copy them. And it gives me a good feeling in my heart when Ferlinghetti gets up there and does a presentation because he's been there since he was like 14.

And then one last question on this, then I want to hit At least one more and then we'll break. I made, I try to speak with data, but there's one rule I've made up and I can't find any data to support it, but I think it's a good one, which is the 50/50 rule for your executives. Promote 50% from within and source 50% from without to get new DNA. If you go too far, if you're all from within, it's great, but eventually groupthink can set in, right? If it's all from outside, it's so risk, it's so, you lose all the DNA, right? Did you have any targets like that at HubSpot? Have you thought, are there any goals in terms of internal versus external for leadership?

I always had that exact same thing. Maybe I stole it from you for years, but now I'm good. And now I'm questioning it.

Questioning it. What do you think the ratio should be?

I think internal. I like the internals.

Oh, lean in even higher. 75-25 or something, right?

Yeah. Yeah. If you get somebody who's killing it, lean in. Yeah.

Yeah. I was at a board meeting this week. At a company called Mango Mint, which is, sounds like a hard one. It's, it's SMB SaaS for beauties and salons. It's the worst of the worst on the 2x2, small TAM and super competitive. Nothing harder, right? Nothing harder. But they're coming up on $20 million, growing over 100% with 110% NRR. And I sat with the head of sales, but I didn't really know her background. She was the first person in. She actually had volunteered to join. No, she didn't even take any money when she started and she came outta the industry. She was like a hairdresser or something. She had no classical, but this is 7 years later and she has an incredible team and knows it cold. And we're, she's talking about how to, she hasn't done this phase before. And I'm like, my bet's on you.

Yeah.

Hire 2 great VPs under you as you scale, 2 great leaders.

Go hire the, the She ran a hair salon.

Yeah, she worked in one. Yeah. So it's, but this so much, you'll never, you want to bet on those people until they say they can't. But she has all the energy, all the wants to build the team. Did it's you want to, that's the 75-25. You want to bet on those folks as far as they can humanly go rather than have the stuffed shirt, bring in someone that from, I love ServiceTitan, but bring someone in from ServiceTitan at $700 million AR that just got fired. I don't know if they're going to crush it.

And how do you think you did? I'll ask you a question. Back at Adobe, when you hired that person for Intuit, who was a VP, and you kept the person at a VP level, and they were fired from there, and, uh, QuickBooks, blah, blah, blah.

Yeah.

Did it work ever?

Here, the market share went from 28% to 11%. So what do you think the answer is?

Market share of what?

E-signature space. When we sold, this is why it was stupid to sell. We had 28% market share by revenue and maybe 40% by transactions because we were cheaper than DocuSign. It was 11% within 2 years of me leaving.

Wow.

It's hard to go from 28% to 11%, isn't it?

And then this is the other one. Yeah.

It stayed for a while when my sales team stayed, they stayed a while, but as soon as they were left and it was those, and it's, it sounds critical and it is critical, but it's also just a learning, right? The market share rapidly decayed after the team was gone. It rapidly— and now I suspect it's in single digits. And it retreated. Some of it's for logical— they retreated to verticals they liked, like government and education. But the problem is we were good in tech and like sales. And so they retreated to areas we were weak. So if you retreat to areas you're weak, you can push it through the channel, but it's like a double whammy, isn't it? Like, and— but that's what happened. Going from 28 to 11 in SaaS is hard with renewals and stuff. It's hard.

Make sure you answer the question I asked.

Sorry, I thought the number might— maybe I misunderstood the question.

Yeah, yeah, answer my question. But you're at Adobe, you're hiring people, you hire that Intuit person.

Yes.

They got fired, but they're not a chump if they're VP at Intuit.

Not a chump.

Did they ever work out? Were they ever great?

No. And listen, the real reason is, and this is what I obsess about now, I obsess about this. They never learned the product. They didn't even try. They ran the playbook and the strategy meetings and did the raw with the team. Probably better than I could. I'm a raw guy, but I'm a little intense. Probably more kumbaya, but never, never learned the product. And I remember once, for example, as I was coming out, one of our biggest customers back in the day was Groupon. It was a million a year. Okay. And we were super early in mobile. Like, we launched everything mobile the day it came out. But by that time happened, DocuSign's mobile app was much better than ours. Okay. So we had this tough meeting with Groupon. They're like, we love you, but like, we need mobile to be better. And one of the executives stood up and we had this really limited integration in Acrobat Reader. Okay. That barely worked. And he put it up on a phone. He said, it works great. This is like not the right answer to the, like, what this person wants. This elegant workflow to sign the contract on the phone, not native, but in an app, like we don't, we have it, but this just check the box answer, like just showing that a really clunky thing that doesn't work. Like that's when you don't know the product, right? And he wasn't technically wrong, but that's where you see decay. And so no one, and I'm obsessed about executives not joining startups today that don't know the product. This is the problem I see today. All so many veterans that work 10 years wherever, they don't really learn the product before they start. I'm just, I just, I'm just gonna use the HubSpot playbook. I'm just gonna use the whatever playbook. And people are tired and they just want a job and they don't learn the product and they just all fail. And that, that's what I saw. It wasn't that you're right. They didn't have, they had good management skills, right? They had good leadership skills, but never, how can you survive today if you don't know the product? How can you survive? Maybe you can sell these old core products, right? The core, but that's the part. It's just brutal, right? It's just brutal. So that was what kind of, I knew it, but that's just never knowing the product.

One of the things we did, I don't even know if we still did it at HubSpot, is when we hired a new rep, their training wasn't sales training, training-wise. Okay, you've got to learn HubSpot. Pick, start your own small business, buy a domain, build a website.

Yes.

Put your contacts in there, sync your LinkedIn and do an email marketing campaign. And then the test was after the 3 weeks of training, I would— the test was in front of me. They had to present their business to me and show me their website, show me all that. Yeah. All the reps really viscerally understood the value. Also understood where the bugs were back then and, and really knew the product. I think that helped a lot.

I think the problem is that, and listen, that honestly, in today's world, any rep that could pass that test, I would hire 100%. I think the problem is we stopped doing that around May 2020. There was so much hiring and so much demand literally across the industry. Having the sell me the pen died. The demo died. It's just, I've got 4 offers. I've got offers from, from Gusto, HubSpot, Rippling, Deal, Gong. I, the Brian, Lorraine has 11 offers. Okay. If I make her do 3 weeks in a demo on a case study and a pre— she's gone. I gotta hire her today to hit the plan. And we lost this. We stopped doing, and we stopped doing reference checks too. Reference checks and the demo died.

After we hired them. So once they get hired—

Oh, this is after.

Okay. It's too much to do it before. Yeah, I agree on the reference checks. Everyone gets very lazy on reference checks.

It just ended. Yeah, I guess if you do it after, it's okay. It is. I think I still find—

Instead of like classic sales training, we did HubSpot product. Like you get to learn how to set it up.

You got to do it. You got to be an expert. And yeah, I would say 90%. Every time I have an interaction with sales or customer success, I use it as a lab too. I just find over 90% have no idea how their product works today. No. And I really think it's a legacy of this, these crazy times in 2020 when maybe it didn't matter.

You think it's coming back?

You know, the meta, I think this is one of the meta issues for the future. I think we figured out a lot of stuff. I don't honestly think we figured out the people issues. I don't think it's coming back. And I tell you what I'm worried is, you know what, when I, when this is a conversation so many CEOs and CROs have behind quiet doors, they'll never have in public or on LinkedIn, 'cause they're gonna get fried for it, which is how do we do with folks that just honestly wanna work 10 or 15 hours a week from home? And you can criticize them, but I get, on the other hand, I almost get it, right? I almost get it. This is, I'm working from home today. You're, I think you're working from home. It's, it's It could be worse, right? So I'm critical and yet I have to also get it. I don't think we have the answers. And one of the answers folks tried is, okay, listen, we'll just try kids. We'll just try the kids. Don't, you know what I'm speaking in, we'll be ageist. We'll hire folks that are 21 or 22. It's worse. I think it's worse. The expectations from TikTok and everything are worse. And so I don't think that's the solution. I can't hire anyone that started in 2021, but that's not working either. So I don't, I think AI has to bail us out. I think AI isn't just, I think it's the solution. We have to get, especially on the, we have to get sales and marketing and support so good from AI that we're not reliant on the 50-hour work person that spends 2 months learning HubSpot and deploying their, this is, you just asked my view. I, more on yours. I don't, I think this is the great unanswered question going into the future in B2B. We do not have enough people that want to run. The old playbooks.

I don't actually know this whole gen— this new generation that well. I knew millennials when I was— I'm actually a big millennial fan. I'm a millennial fan. I will say something about the founders. I mean, mostly true Sequoia, but also true Peller. I worked very hard when we were starting HubSpot. The founders today are tyrants. There are 100, a lot of them are like, well, 120 hours a week. I know I don't have any life. Like they, and it's, and I think it's a lot of it's Elon and he's like a new template for how you do this kind of thing. But I have noticed like a change in the intensity of the work. I'm not sure exactly how I think about it. I think that's what it takes. And almost all of them coming through these days have that. I've always thought obsession is a good feature in a founder, but like that obsession taken to a bunch of them I talk to are 120 hours a week. It wasn't that way before. And so on the founder side, there's an intensity that is, to me, new in the last few years.

Yeah, I think it's— I, I do think— I think that's the weird thing. If you just meet with founders, you'll think they're harder working than ever, and they are. I think founders today work even harder. I thought about work every minute of every day. Saturday, Sunday, in the shower, on a run. But I didn't work as hard as Adam from Owner or other folks do. I didn't work 6.5 days a week and do nothing but work and lift weights. Nothing else.

I was like you. I'm constantly thinking about it. I probably put in, I mean, okay, maybe 6, but most of the people I know are 7 days. They're just cranking and they see a window of opportunity and they're like, I'm going to march hard.

So it's a weird world where the founders are working harder, for real, working harder than ever. But then I just don't think all the folks we need to help us build these companies. And I, this sounds critical. I'm no longer critical. I think it's hard to find more than 10 people on your team that want to work at that intensity, right? And you can build this Elon thing and there are cultures that do it. The owners and others have 50, 100, 200 people doing this, but it's. I just don't even know. I honestly don't know where they find them because it's a needle in a haystack today. 'Cause when we started in startups, you were crazy to do a startup either as a founder or as an entry-level per— you were, everyone was crazy in startups. Everyone was crazy, right? And it's very mainstream. So it's tough, right? You can't expect normal people to be crazy.

I agree. All right. What else you got?

Okay. Last one. This one's just one to pick out, but I, I just, I'd never heard anyone say this before at SCaLE. We didn't get any acquisition offers.

We didn't. Salesforce never made a serious acquisition offer. No. And there was all these rumors Google was acquiring HubSpot. No, we didn't get it.

Never.

No.

In 18 years or whatever it is, 18 years.

We've had a couple snips, but No, I, by the way, it surprised me. I thought there'd be a lot of acquisitions. So it's a little bit, I worry when you say your company is $25 million in revenue growing 300% and getting a billion dollar acquisition offer. The acquirer, let's take Salesforce and HubSpot. I'm an interesting example. Salesforce invested in HubSpot, knew us quite well.

Yeah.

A Salesforce automation company at a time when HubSpot was still a marketing software company. We pivoted and we got into CRM ourselves. But at the time, and then salesforce.com woke up one day and said, we want to be in the marketing. We like the sales software and the marketing looks pretty attractive. And at the time, there was ExactTarget, there was Responsys, there's HubSpot, Pardot. There's, there was 10 of us.

Yeah.

And there was like the email marketing ones and the marketing automation ones. And They weren't going to buy— they weren't going to buy two. They weren't going to buy— they were going to buy one, and they bought ExactTarget. And then once they bought ExactTarget, just so happened ExactTarget had recently bought Pardot, so they actually got a freebie. But for your company, if there is one obvious acquirer— and for us back then it was Salesforce— and they buy something else, first of all, Salesforce went from being like our best friend to— we, they were a formidable competitor in the marketing software space. So it slowed our growth down. And second of all, like our natural acquirer is gone. So be careful on that advice you give them.

Yeah, I do be, I am very, I don't know the right answers, right? It's a big problem.

There's one natural acquirer and they're coming now and then there's, and you say no and they buy your competitor or they build it. Then the window closes and then not only does the window close for the acquirer, but you're competing with that big company.

Yeah, it's always stressful when a big company says to you, you get, you'll get a call. We're thinking about build by our partner. That's like the corp dev language, which I hate, but you should take it. And I got freaked out when Adobe said it to us, but, but your point is you should take it seriously. It may be language, but it's can be maybe very build by our partner is serious language.

Salesforce made a few acquisitions recently. We just want to start a cash flow in the CPQ place. There's a bunch of CPQ companies out there. We picked one.

You won't buy another.

We won't buy another.

Would you have— it obviously wouldn't make sense if you open up Yahoo Finance today, but if Salesforce had offered you a billion dollars pre-IPO, would you guys have taken it?

I don't think so. We were pretty committed to building a standalone company. The line we always use, we still use, is we want to build a company our grandkids would be proud of and build an anchor company in Boston and all that kind of stuff. So I don't think we would have. It would have been nice if someone offered though. It'd be nice to be wanted, Jason.

I think the reason I brought this up, not only is these stories great, I do think, I do think this is such good advice. I think when you read social media, especially what VCs say, it seems like there's a lot more M&A offers than there are, and there's tire kicking. And there's emails, but one, it's acquiring a company is a much bigger deal for a tech company than you think. Maybe not for a PE company, it's a big deal for Salesforce or HubSpot to buy someone. It's a big, the soft costs are much, much more than the cash or stock. The soft costs are huge. The business process, it's a big deal, right? And VCs act like this happens all the time, but I don't think real offers happen all the time that are good. Real offers are rare, right?

One company that I'm involved with just got acquired by Stripe for a good number. Yeah. And it's an early-stage startup. And I asked him about the process. Yeah. And he didn't give me a lot of detail on it, but it basically like, if you want to sell your company, no one's going to want to buy it, by the way. It has to be completely—

That's another issue. Yeah. They have to want it for type of a deal.

You can't wake up one day and be like, oh, I want to sell my company, hire a banker. It never works. It's inbound. It has to be inbound. And I would take the calls, like we always would engage with Salesforce. We kept them close. We let them invest. We partnered with them in the field and we would always keep in touch with the big folks around us because we always wanted the option to say no. Google or Amazon or Salesforce, anyone's like, we want to get into CRM. We want to at least get the call and have it be our option to be like, you know what, it's going great. We think we're $35 billion market cap and we're marching to $350 and good luck and we'll see you out in the field or let's partner.

Yeah. People say a lot of VCs say, go sell your company or you should think about it. It just doesn't work. The only way it ever works is if you've already gotten a reach out, then it's somewhere between inbound and outbound. Right.

Keep in loose touch. And one of the things I did with Salesforce is we met them after our Series B. Yeah. And we were deep partners with them, like really deeply integrated with them at the time. And after we met Danny Hoffman, everybody in there, once a quarter, I put together a back then a PowerPoint deck of what was going on at HubSpot, 4 or 5 slides, unit economics, hockey stick, and I'd send it to them just to keep in touch. Things are going well. Here's the partnership. No one does that to me. It's surprising. Like we did, I lead nurtured Marc Benioff and John Samorjai and Brett Kuehner and all those people back then for years. And even after they invested, and then once they, once they acquired and became competitors, I ended the lead nurturing campaign, but I would keep in touch with them and nurtured the relationship.

Yeah, you got to, I know we got to break it a minute. When I was on the other side at Adobe and I, they, Adobe did M&A was just coming back when I got there. It had gone on pause during the downturn and they had lists. They had target lists, right? I don't know. And I, Salesforce's there got leaked a couple of years ago on Business Insider. It was really interesting because it's very methodic, right? They had a target list. And what I learned at Adobe is the target list in RBU and all the B, like one or two of them made total sense to me. But the other ones, I would never put them on the list. These are human-driven. This is what Yamini and Brian and Dharmesh think.

It's gotta be one person. Yeah.

And like their ideas may be tempered by where they live, who they've met with, who Sequoia knows, who Dharmesh is seed invested in. And it may shock— as the company gets bigger, their views of what is hot and is important is— there's so many startups, right? And I was just— some of the ideas on this list were obvious that it was, it was pre-Figma, but some of them made— I'm like, Why is this—

is crazy.

Like, I've been a SaaS founder for a few years now. I got a couple better ideas. Yeah.

We just bought a company called— we just made a couple acquisitions. We bought Clearbit, we bought Cashflow for CPQ, and we bought Stoneframe AI. And in all the scenarios, there's kind of one person on the exec team who is like the champion and I'm going to make this work. This is the idea. And there's pushback and there's back. What about this company? I'm like, whatever. And they're in it. Gosh, it helps if it's the CEO. Yeah.

CEO gets it, gets the biggest chip, right?

Yes. I don't think Ford buys anything without Mark Benioff being said.

Yeah. It's funny. I'll tell you the last, not to spend too much time in the earliest of EchoSign, we got this soft acquisition offer from Salesforce and John did it and we all did the pitch. And it was for so little money. I said, I just can't afford it, but we did it anyway. And here's the interesting— I can share the other interesting learning. Some of them probably don't matter because it was a long time ago. It was like a year one deal. But what was interesting is we failed the due diligence. And the reason we failed the due diligence is they said our engineering team wasn't strong enough. And what's interesting from that story is they were not only so good, but my CTO is one of the chief senior scientists at Adobe today. He's off the charts. Good. But the, but that was so important. Like you just don't know what the goals are. And that was a dumb reason. I get why they made the decision. He was cranky. Okay. And people matter in M&A too, right? Cause you got to work with these people. And my CTO thought he came with his best outfit and best attitude, but he was a little, he would always tell you why you were wrong. I love him, but it doesn't always work at big companies to tell They're, but, but that was the, that's a weird reason to do it. And it was wrong, but right. So you just don't know what the motivations and goals and why they wanted to do ExactTarget over HubSpot. To me, it makes no sense, right? But there was internal logic to it, right? That we might even today, we might, you might know, you could ask Scott, but we might not even know what the logic was, right?

The only one that says in the cases, those 3 acquisitions are decent size acquisitions. That's why the CEO, the founder and the CEO mattered. And we wanted to keep in our team. That founder CEO.

Yeah.

It's like interviewing a VP. We need—

it's like interviewing a VP.

Yeah, it's very similar to that. Is it a cultural fit? We think we could see this person here in 10 years. Would we like to work with this person? That's how we looked at it.

Yeah, people miss that. Like, you're being interviewed and it's—

be—

you don't even realize you're being interviewed. And the bet on the people, and it's just— it's, it's so It feels very transactional to a founder in some ways, and they don't realize how much energy is going into it at the acquire. It's so much. Clearbit, big deal, whatever. It's just, but that's years of downstream impacts, whether that deal works out or not. And just the human time, the distraction, the integration, the, all the meet, the internal meetings about how to integrate it, where to integrate it, pricing. It's like that could be 10,000 hours of like expensive people's time. Forget that. It doesn't even matter what it costs to buy it in some ways. Right.

Jason, this is lovely chatting with you.

You're the best.

I need to run.

Yeah, we're over. Brian Halligan, thank you for everything. Always great. And we'll see you soon.

See you soon, buddy. Bye.

Right, man.