Unleashing the Power of SMB: Combining Enterprise Software with Consumer Scale HubSpot's Founders

Name: Unleashing the Power of SMB: Combining Enterprise Software with Consumer Scale HubSpot's Founders
Uploaded: 2023-11-28T15:15:03+00:00
Duration: 54 s
Channel: Jason M. Lemkin
Description: In this monologue, one of the founders explains the primary motivation behind starting the company. While both founders met in graduate school and shared…

28 Nov 2023 · 1 min

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In this monologue, one of the founders explains the primary motivation behind starting the company. While both founders met in graduate school and shared a passion for small‑and‑medium businesses (SMBs), their prior experience was in enterprise software, which they describe as having long sales cycles and limited data feedback. They contrast this with consumer applications, which they view as high‑risk, either becoming massive successes or failing entirely. The founders argue that SMBs combine the best of both worlds: the ability to charge for software like enterprise products, yet the massive scale of consumer markets with millions of potential customers. They see this hybrid space as an underserved market that larger enterprise‑focused companies overlook, providing a strategic opportunity for their venture.

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The only reason— well, not the only— I mean, the primary reason we started the company is both of us had a passion for SMB. This is when we were both grad school students, when we first kind of met as classmates. And partly the reason is we had both done enterprise software before in our prior lives. As it turns out, enterprise software sucks as a life. You've got these extended sales cycles. It takes you so long to figure out product market fit because you don't get as many data points back. The other end of the spectrum, you could do consumer applications, consumer companies. And those tend to be very kind of bimodal outcomes. Either you come up with something great, it's the next Facebook and it's billion-plus dollars, or it's nothing because, you know, the advertising side— you just don't know if you're going to break it through. The beauty of SMB is that you have the kind of old-fashionedness of enterprise, which is you can charge money for software, but you have the scale of consumer where there's millions of them out there to be served. And we were just excited about— and we thought it was an underserved market that, you know, there were— everybody ends up getting pulled up into the enterprise.