Billionaire Compresses 20 Years of Wisdom Into 75 Minutes - Dharmesh Shah

You've had a good quarter. HubSpot stock, I think, hit an all-time high. You sold a domain to OpenAI. You came with a pod. You know, I don't care what they say about you, Dharmesh. You're doing okay.

I'm doing okay. I'm doing okay.

Uh, thank you.

All right. It's my first million. How do we use the hour so that it's your first million?

If all you do is spend 100% of your time converting your labor into value and do not increase your leverage, you're not going to get anywhere.

Okay, so what were the things you invested in that had maybe the highest return for you that did actually make you more high leverage.

Never in my mind has it been easier to get to that first million than right now. There was no good way to squeeze this in, but I can't not say it. I'm going to— I know I'm going to— Okay.

Let's start with opening remarks.

The first is what I'll call an unhidden agenda. And my unhidden agenda— so I have a picture of a Venn diagram. I love Venn diagrams. Circle number 1, I wanna talk about things that I think I have useful things to say and some expertise. Uh, so we'll definitely talk about AI and agents and things like that. But the other circle is things that I think are borderline guaranteed to increase the probability of you, the audience, making your first million. Thing number 2 is that in order to do that, uh, you know, we have at HubSpot, we have a culture of, uh, humility. That's one of the core, uh, 5 values at HubSpot. And I've said this particular line, uh, to employees at HubSpot. I don't think I've ever said it outside of HubSpot, but I'm going to, uh, solve for utility over humility. So if there's a way to say something that's going to be more useful as a result of, and, uh, but in order to do that, I'm gonna have to say something that's non-humble. I'm gonna go and say it even though it's non-humble because it increases the utility of it. And there will be a couple of moments, um, that are completely non-utility and non-humble as well. So that's, uh, a couple of twists in there.

Okay. So we have to just start with this, which is You're coming on as a guest, but you're coming on as the most prepared guest we've ever had. We did a pre-call, we discussed a bunch of things. Then you, uh, then I sent you some notes, uh, and I try to make it light. I'm like, just maybe one or two things to think about before the episode. Cause I never know how much work somebody wants to put in. You then send back a whole nother doc that's like, hey, here's a bunch of stories, ideas. I have some opening remarks. You have a whole bunch of stuff there. You went back and you watched your old episodes, which are some of the most popular episodes we've had. You read all the comments, you incorporated the feedback. Is this just how you do everything?

Not, not everything. Um, so confession on this particular, in this particular case, not only did I watch my prior episodes, read through the comments, but in the process of that, I saw the leaderboard on the My First Million YouTube channel and I'm number 5. And you don't know this about me yet, but you will. It's like, I've never met a leaderboard that I didn't want to get on the top of. Right. It's like, okay, what, what happened here?

By the way, Sam, that's what, when we, I was like, so are you coming on? What do you want to talk about? AI? That's obviously an area you know a lot about. And he was like, Yes, but through the frame of, okay, it's my first million. That's the name of the podcast. How do we use the hour so that it's your first million? So if you're listening to this, that I, he's like, I can't guarantee you're going to do it, but I can increase whatever that probability was. Can I in one hour tell you things that will increase your probability?

That's a promise. That's so good. Someone in the YouTube comments on a recent episode, we had someone on and Sean and I both sat like this for like 8 minutes. And, uh, someone was like, dude, Sean and Sam are just flirting. They're just staring. They're in awe. I have a feeling we're going to be getting a lot of, a lot of these.

Yeah.

I'm going to just get my hands ready. All right. So where should we start, Dharmesh?

So let's, and I'm not going to give you an autobiography. What I'm going to do though, is I'm going to take us back in time a little bit, because in order to kind of understand some of the lessons that I thought now in hindsight were sort of the most valuable for me. I didn't know this at the time I was living it because we often can't pick that up, but I think will be useful. So I'm going to go back to when I first immigrated to the US. I was in my early 20s and I was here just on a visit to my parents who were living there. I was in Indiana and applied for a job at Pizza Hut, rejected. Applied for a job at Big Lots, rejected. Applied for a job at Red Roof Inn. And because I was Indian and my parents were actually running, like they automatically assumed that I'd known things. I'd only been in the country for like 3 and a half days.

Because Indians are famous, not hoteliers, but like moteliers.

Yes, moteliers. And that's exactly what we had. We had a motel, like, yes. And it was not even like a franchise motel. It was one of those. Anyway, and so this was for the night shift, right? So that might be partly why I got it. So it was like 11 PM to 7 AM. And that's the only thing that would work for me because I was taking classes during the day. And so a couple of things out of that particular experience, and this, I think, will relate for a lot of folks. So in the early parts of most people's career, um, you're working retail, you're working some sort of job, um, and you have a, what I call your currency. And your currency is what's the kind of time value of your time. It's like, oh, you're making $3.65 an hour, which is what I was making in the kind of early, early periods. Um, and you're taking that kind of currency value, multiplying it by how much time you, how much labor you expend, how much time you spend doing whatever it is that people are paying you money for. And that's pretty much the production value. That's how you create some money in those early years. So mathematically, in that particular equation, there's only two ways to make more money. One is work more hours, and the other one is to raise the currency, raise the price that people are willing to pay for your time. Okay, great. And that time I was looking for all the hours I could get. It's like, I want to work more hours. And if someone cancels, someone like, I will be there. Just give me the hours. Like put me in coach. Can't believe I made a sports reference. Uh, I don't do sports at all, but anyway, um, it worked. So, so here's sort of the kind of the lessons. Like, you start there and you're going to end up spending a large part of the early part of your life, let's call it the first half, converting time into money in various shapes and flavors. That's effectively what you're going to be doing. And then you're going to spend the latter half of your life, uh, approximately desperately trying to convert money back into time. That's what happens. That's life. And so we go back to the, okay, I'm converting time into money, expending the currency. There's going to be this automatic increase that happens in your currency simply as a result of tenure. As it turns out, companies pay more for experience than they were. So even if you're at the same job doing roughly the same thing, you're going to get some marginal increase, not much, but it's going to go up. Now, my argument here is that in order to really kind of break into, like you're going to start to have to kind of accrue money. If you're in debt, you're going to have to get out of that first. But you're going to need to get some sort of leverage. Leverage that says, okay, what can I, and not leverage in the kind of leverage buyout, but leverage in the kind of Archimedes sense. The guy that's, you know, quote Archimedes, quote is the, give me a lever long enough and a fulcrum on which to place it and I will move the world or I shall move the world. And what's interesting about that, that quote particularly, and that's a physics thing. I love math and physicsy things. Is that, okay, so that fulcrum is actually very, very necessary. You need a point on which the lever is going to pivot. Um, and the degree of kind of amplification you get for your force— that's what leverage creates— is how far you are from the fulcrum. So the kind of the lesson is, as you're spending your time, if all you do is spend 100% of your time converting your labor into value and do not increase your leverage, you're not going to get anywhere. So what you have to do is you have to allocate some percentage of your time to say, Even though someone's not paying for this particular time, I'm gonna go read a book, I'm gonna go do this, I'm gonna do a seminar, I'm gonna meet a friend, I'm gonna, whatever it happens to be, you have to kind of make that investment. You have to carve it out. Otherwise you never get the leverage necessary in order to make it to that first million. That's like the number one lesson. And the thing that I did that was, uh, very, very useful that I still carry to this day is that you sort of have to carve out literally some amount of, uh, dollars for yourself. And time and money are equal to me, uh, back then. It's like, and what I mean by that is like, I'm going to take 10% of all the money that's coming in right now. I'm going to spend it on books, on things or whatever that's going to kind of improve my value. And it's funny because even in my first job, and we'll talk about this in a little bit, is like, they wouldn't get me like a fast enough computer, wouldn't get a computer. It's like, I don't care. I'm not looking for approval from anyone or whatever. If like, if something's in the way that I think will improve like who I am, and increase my currency, I will spend that money. I won't expense it. I don't, I don't care.

What were the things you, you invested in that had maybe the highest return for you that did actually make you more, more high leverage, that did make you more valuable, increase your rate? What were, what were the top investments you made?

Books were the highest, candidly. Um, and I read, uh, which book roughly? So there was, um, there was an author called Harvey Mackay who wrote some very kind of pedestrian business books now by today's standards, not sophisticated at all. But realized like at that age for me, it's like, this is brilliant. It makes so much sense. It's, uh, the one of the books was titled, uh, Swim with Sharks Without Being Eaten Alive.

I think that was one of his, um, Swim with the Sharks Without Being Eaten Alive.

Yes, exactly. Uh, there was another one that was less about business, but still it's like everything I need to know I learned in kindergarten. And these are like basic, very, very like basic, basic things. But it's one of those that it's like, if you're an alien from another planet, which is what I felt like a large part of my life, it's like, Oh, so this is how the world works kind of thing. It's like, you know, it seems shockingly obvious right now. It just wasn't shockingly obvious to me at the time. All right. So, so that's kind of lesson number 1. You need to kind of get leverage. Lesson number 2. So after my Red Roof instant where I was night shifting, they had a computer there, which was one of the nice things to do their accounting and had to close the books. That was part of my job. So that was some of my early exposure to computers. But then I was able to get a job at U.S. Steel.

No shit. That's pretty good. That's pretty cool.

All right, my friends.

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And that was my first real programming job that they would hire. They hired me as an actual software developer at US Steel. I was still going through school. Working on my undergrad. Um, and it was great. I loved, uh, you know, loved the work. And the U.S. Steel plant that I was working at was in Gary, Indiana. And I don't know, things may have changed now. I don't know. Uh, Gary, Indiana was at the, like, top of the list of, like, the place you did not want to be. As it turns out, Indiana overall was in a fine state, but it's, like, very northish, uh, and very cold. And I had just come over from India. And so I did a very me thing to do, which was, it's like, okay, well, I have a job at US Steel. It doesn't really matter. You know, I'm talking to a mainframe, I'm writing my code or whatever. Do they have other places? Like, it's a big company. As it turns out, US Steel has a plant in Birmingham, Alabama. Did not know where it was. Never been to Alabama. But one thing I did know was like, oh, it's more south than here. Thing number one. And number two is like, it's not Gary, Indiana. So the mathematical odds of it being a worse place, because I looked this up, is like, are slim to none. So Birmingham, Alabama, still not necessarily at the time, um, best places to be. But I'm like, so I requested a transfer. It's like, hey, I'm working at software. I know I'm new, but I, I see that you have a plant down in Birmingham, Alabama. Can I go work down there? And they said, sure, knock yourself out. So I get down to Alabama. I'm working for U.S. Steel. And I'm an impatient person, but I was like working. It's like, okay, well, and I was making, uh, I think it was like around $27,000 a year, which was a lot better than I used to be making at Red Roof Inn. And it was a full-time job, like, cause I didn't have to like scrounge for hours or anything like that. It was an actual salary, which was awesome. The thing I learned though is like, okay, so how do I like progress? Like, how do I kind of grow? And the thing I figured out, um, and this was said to me by kind of my manager, he almost said it in these kind of words, which is, Dharmesh, look, if you're not making steel, shipping steel, transporting steel, moving steel, or selling steel, you're overhead. And like, that's the, like the time that the epiphany like sort of hit me. It's like, well, I don't want to be overhead. I was like, I don't want to do that. And so then it's like, this is once again, I'm a very, very simplistic guy. It's like, okay, well, my thing is software development. Where do I need to work where I'm not overhead? Right? And so then the kind of extrapolation is, oh, well, I need to work at a company where software is the actual product, just like steel is the actual product for you, STL. I need to get closer to kind of what the actual value is. So I opened the Sunday paper, which is what we did back then. This is pre-internet days. And I'm like, look for jobs at companies that are software companies. And so I applied for a job at a software company that happened to have a job ad in the paper in Birmingham. And it was a place called Semgard Data Systems. It was a software, bona fide software company. Apply for a job there, uh, got that job, which is awesome. And that was life-changing in and of itself. It's like, okay, software companies, when it comes to software developers, are much better at treating developers than non-software companies, as it turns out, as a rule. So like, this is awesome. And so the kind of the file away lesson here would be, um, your value is kind of inversely proportional to the distance from the actual value creation, whatever it happens to be. So if you're not in there, find a way to get there, whatever it ha— and I'm not saying you have to be in software development, but like the guy, like my manager had said, you have to be making steel, selling steel, or shipping steel, whatever. Everything else is sort of meta and is just overhead. And once again, this was the '90s, right? I think people have a more nuanced approach to how value gets created. But if you have a chance to get closer to the actual customer, closer to the actual product, you should take that. That will kind of increase your leverage. Increase your currency. So I'm working at Sumngard as a software developer. And this is a good story. I'll share, there's a high utility in this story. So I'm working there and I'm making, I think it's around $40,000 a year at that time, which this is early '90s, give or take. And Birmingham, Alabama, that was actually pretty good money. So they paid me. And the thing I was doing is that Sundar's software product was like a mainframe product. So they had the character mode terminals that you guys see in the movies now. Uh, well, there's still mainframes out there, but most normal people don't have to interact with them. But anyway, but they were in the process of trying to build a graphical user interface, which is the, you know, the latest thing back then that interacted with their mainframe. They wanted to offer like a Windows kind of GUI on top of their mainframe. So my job was to say, take this character mode screen. And create using this drag and drop tool, a GUI equivalent of that particular screen. There were hundreds of screens in the Sumdart product. It was a big kind of multimillion dollar product. And I'm like, well, this is stupid easy. And we had consultants on there because they were trying to kind of accelerate the development. And the consultant, I remember this vividly, was making $125 an hour to do this, what I thought of as being relatively rote work, right? But I'm like 2 months into the job. So I go to my boss and I'm like, you know, we're paying these guys $125 an hour and all they're really doing is dragging, dropping based on this character mode screen or whatever. This is not software development. And by the way, this is so trivial. My brother who has not graduated high school yet, he works at the Piggly Wiggly, which is a grocery chain down the South. Even he could do this like in a day. That's how, why are we paying these people $125 an hour? Does not make any sense. And so my boss said, bring him in. So I brought my brother in. He's 17, still hasn't graduated high school. Showed him what we're doing. He's like, okay, look at the screen over here. Do this over here. You drag and drop in here and I'll review your work at the end of the day. We didn't know what to pay him. So we paid him $5 an hour. So my brother starts working there. I'm there and we're cranking along, kind of building this new product. I hired all my classmates from undergrad because that team The team is growing, we're trying to doing this new product at SumoGuard. And I continually kind of get impatient. I'm like, okay, well now I'm at a software company. Now I know the value that I'm creating. It's like, okay, like what gives? And I'm, so I'm like constantly kind of going back to them. It's like, what do I have to do? And I'm still individual contributor, by the way. I don't, not managing anybody, but I'm like, I get the way this stuff is working. And so they were actually super, super nice and generous. And so they kind of bumped me and kept bumping me. And I was only there for like, I think it was like 14 months or something like that. Um, and so eventually they were paying me like a quarter of a million dollars a year in Birmingham, Alabama in the early '90s. And I've only been there a year and a half because I was able to kind of connect the dots, uh, on the value being created. And then I sort of got tired of, because I think it was just kind of wrong of me to constantly go back to them because they were paying me like really well, right? It's like, okay, well. I sort of hit my ceiling of what's reasonable now for me to ask of this software company, um, to pay me. It's like, okay, well, what do I have to do? It's like, well, I have to get closer to the value creation or whatever. It's like, like start my own software company. That was the kind of— I had no product idea that was like, oh, this is the thing I need to do. Like the, like the thought that went into my head is like, oh, in order for me to like do better and kind of get more leverage on my time, I'm going to now have to leave SunGuard and go do my own thing and figure out like software to build and go do this. And the one thing I do know like how to do is make developers happy. Because I'd hired, you know, I hired all my friends. I'd like, I know what makes a developer click. And that was the genesis of my first startup. And the lesson here is that I'm going to have to share this, this one, one story. I'm going to regret this because, uh, I'm going to share it. It's a good story. Um, so in one of those kinds of discussions, um, with my manager, when I'm going back, it's like, okay, like, what else do I have to do? Uh, I mean, I didn't have any particular numbers in mind. Uh, you're like 27 at this point, 26, 25? Uh, yeah, roughly, yeah, roughly 27, somewhere in my— yep, 25 to 30. Um, and so after a point it was starting to get ridiculous. So he came back like, Dharmesh, do you really think you're going to find that many companies that are going to pay you X amount of, you know, like $200,000 or whatever it was that would have taken, uh, in that conversation? And this kind of came to me in the moment. Um, and the line I came back with was, well, as it turns out, this is the very kind of mathematical side of me, it's like I really don't need to find that many companies that will pay me $200,000 a year. I just need to find one. And I think there's one out there. That's all. It wasn't on a threat. It was a very, just a very measured, like logical, like a Spock-like response, right? Like, like that's not the function we're solving for. We're not solving for, you know, what is the local maxima in terms of how many companies are out there that will pay, you know, and what's the standard distribution. None of that matters. Like, I don't need to find like 100 of them. Like, I'm, I'm mobile. I'm willing to go anywhere. It's like, I'm willing to bet money that if I looked, I could find one, right? Like, that's, um, like the most scary.

You agreed with him in a way, right? He's like, do you think you find 100 companies out here that are willing to pay you this? You're like, no. But the good news is I didn't need 100. I need one. And I believe that there's one out there. And that, you know, that applies to dating. That applies to being successful at one bit, you know, making one business work will do enough to change your life.

And so there's two lessons to draw from that. Uh, one is, you know, the power of negotiation, uh, which is one of my other, like, one of my favorite books, most recommended books is, um, uh, Getting to Yes, which from the Harvard, uh, Negotiation Project. And that's the one book I think I've read like four times now. Uh, I reread it, um, like every few years.

Can you give us a quick insight for anybody who hasn't read the book, like me? Um, what's an insight from there that would make me a better negotiator?

Most people, when they think of a negotiation, they think about this kind of adversarial, it's me, it's a zero-sum game. This is what's happening. And as it turns out, most negotiations, both in life and in business, are actually not like that. And that first-order thinking in terms of like, oh, like, you know, my objective is to get the lowest price and their objective is to get the highest price for the thing I'm trying to buy from them, whether it's a house or whatever. And that's not the way to think about it. The way to think about it is to identify what your actual needs are. What's truly the thing? If you're solving for price, fine. But Recognize that and do your best to identify what the other party's needs are, because there is often, very, very often a path that actually will optimize for both of you. And that's actually a better path than just try to divide the pie and fighting over price or whatever. There might be something else that's actually more important, right? Um, and, and so this applies to so many different situations and we, like, I'll, I'll give you like a, a tangible example of that. I think, uh, a mistake. Companies make building their operating system in terms of how they run. It was something that, uh, HubSpot has taken to heart is that we automatically think that what, you know, people are solving for is like compensation number one, uh, and autonomy and discretion and scope of good luck. And, and those are all important. As it turns out, the number one on the feature list of what people want is actually flexibility. Like, and they would trade a lot of other things in exchange for flexibility, right? And it's, if you could just get to the bottom of that, if you understand that, then you can sort of trade off other things that might actually have a higher price to you. It's like, but flexibility, it's like, okay, like we can do that. Yeah, there's a cost to it, but the cost of not providing enough flexibility is actually much higher because the talent density is going to be lower. We're going to have to pay more, all things being equal. Um, but anyway, that was the big lesson from, uh, uh, Getting to Yes. There's a bunch of other ones that it's an easy read too, by the way. It's not a particularly like dense, heavy read. Um, I, even if you're not in business, if you're just in life, uh, it's a book worth reading.

When, when Jeremy Giffen came on the podcast, he said it, uh, he said the same idea differently. He goes, we asked him, what did he learn about negotiating from Chris Barling, who, who is one of the guys at Tiny? And he said, I used to think negotiating is like this, two people sitting across from each other at the table, sort of, I want this, no, I want this, the adversarial thing. He goes, Chris just told me, imagine you're both sitting on the same side of the table and you're looking at the other side of the table and there's the problem. And you both are looking at the problem and saying, oh, okay, so the problem is that you're looking for this and I'm looking for this. And then there's this other thing we haven't even discussed yet. How can we just, how can we together figure out this problem? And fundamentally just taking a different, taking that lens will allow you to be more successful in negotiation.

Let's say you're negotiating something that I think is a, uh, what I would call a non-commoditized thing. It's hard to figure out the price. It's a unique property. It could be a, a house somewhere where there's not 100 houses on the streets that just something that's unique and hard to find comparables on, whether it's wheels, doesn't matter what it is. Uh, the temptation is to go in as a buyer and say, Well, you know, it's got this wrong with it. This is wrong with it. That's wrong with it. I'm going to have to fix that. And it's like, it's, you know, and to try to kind of drive the buyer's expectations down. That's actually not the optimal approach in this situation, these kinds of situations. And the reason is the visceral reaction most people have, they're sitting on a unique property like that is, oh, like he doesn't actually understand the value. He's poking at holes all day, but he doesn't get the fact that this, this, this, and the other thing. What I need to do is find someone that actually appreciates the value of this thing, and then I'll do better on the price, right? And there's no objective value because there's no comparables. Like, no one really knows what the actual fair value is. Now, flip that on its head. Let's say I went to that same property. I'm like, this place is fantastic, I love it. Let me tell you the things I love about it. Let me tell you why, like, I am like all in love with this thing that you're selling right now. And you go through that and it has to be authentic, has to be genuine. I'm not making this up. And then I put my price out there. It's like, you know, here's what it is. Now the seller has to say, okay, well, am I really going to find, like, I don't know what the price is. This person seems relatively clueful. He loves this place. Am I going to find someone else that loves it more than Dharmesh loves it? Probably not. Like he totally gets this thing or whatever. So maybe his price is probably what the fair price should be. Right? Like that's, he seemed like a reasonable guy. So that's a, it takes people's guards down. And this only works by the way, when you have one of those kind of rare, it's hard to find comps or whatever, the price is not really objectively known. It's hard to kind of triangulate to a, like a quote unquote true price. Um, anyway, that's my, that's great. Our negotiating tip of the day.

So, okay, great. And so you, um, you told me something when we were talking before about this first company and you said, okay, so I did this company and actually Maybe there's more in that first company, but you told me something great that I want to bring up, which is then you did a second company. And this was one that I don't even know if it's on your LinkedIn. You're like, this is my embarrassing company. It's my, uh, things didn't go well. And Sam, the story he told was he was like, I did the first company when I just didn't know. I didn't know anything about anything. So I'm clueless, blah, blah, blah. We're just making up as we go, super scrappy. And it, and it kind of worked. It worked. Uh, then he's like, I'm gonna do the second one, but now I'm so much smarter. I'm like, uh, now I actually know what I'm doing. I have some experience. I'm going to do things the right way this time. I'm going to go raise money. I'm going to hire better people and I'm going to get a better offer or to do these other things. I'm going to do it proper. And then I guess that that business, you can tell the story here, but it didn't work. But you said some great line. You go, just because you were, just because I was ignorant doesn't mean I was wrong. Meaning that first time I did that first business, I was ignorant. I didn't know anything, but it doesn't mean I was wrong. Can you, can you unpack that idea?

Let's say there was an objective truth function. That says, okay, this was in this particular situation, the right decision to make in whatever situation you're in right now. That objective truth function, if we had run it against all the decisions I made in that first startup, I think my hit rate was actually pretty high. And the hit rate of lots of founders, because our natural instincts in that situation actually turned out to be good instincts, like being resourceful and not kind of spending too quickly or whatever, taking your time, doing all the things that kind of came as natural instinct. And I was not a natural born entrepreneur. It's probably likely why I have the insecurity, but in something like a startup or entrepreneurship, there's a bunch of decisions you're going to make. A lot of them maybe may or may not be optimal, but what was definitely suboptimal in hindsight was second-guessing myself on the second one. It's like, I'm going to do the opposite of what I did in my first one because it's like, what a chump I was back then. So I'm going to go, I'm going to do a speed run. I'm going to do it faster. I'm going to write a $500,000 check to myself on day one. To fund the thing or whatever. It's like, like, who has time? We don't have time to go through those kind of cycles or whatever.

Really quick, I, I remember a time in high school I had this like hillbilly friend that had like a huge chest because he was like so strong at bench pressing. And we went to like an exercise class and the teacher was like, the best way to get strong in your chest is to do incline bench press at a 30-degree angle. A 30-degree angle is so much better than a 45-degree and so much better than a 10-degree. And my redneck friend who didn't know anything, he just would go down and lift weights, he was like, I must have been doing them at 30 degrees because I'm strong as shit. Like, it's like the same thing. It's like, dude, it doesn't matter. Like, if you know what you're doing or not, it's always to get the end result. What was your, uh, what was the second company? I had no idea that you had a failure under your belt.

Yeah. Yeah. Well, I've, yeah. Yes. Um, I had, so it was a kind of Facebook before Facebook for small business. It was like effectively a CRM. Uh, so I've been working in CRM now for a long, long time. Built for small businesses. And this was right in like the 2000 timeframe. So right as the bubble was bursting, and the first company was not an internet company. This was, it was a web-based information management tool for small businesses around customer.

What was it called?

It was called Captivo. C-A-P-T-I-V-O.

How much did you raise and how long did it last before you shuttered it?

So once again, because I was going to do things differently this time, I wrote the first $500,000 check. And I kept writing checks. I'm like, I have money, why would I not like just fund myself?

Um, can you say, can you say how, how, how much did you, how much did you have and how much of that did you put into the second one? Can you say that?

Um, I think I probably put in about $2 million, I'll say, give or take.

I found, uh, I Googled Captivo Dharmesh and I found a PDF that has a lot of handwriting on it and it looks like it's a case study for Sloan. And, uh, you're trying to make a point and you said, uh, In '99, I, I founded my second startup called Captivo. Uh, this is what it was. It was in many aspects similar to salesforce.com. And about 2 years in of the product development and over $1 million of capital invested, mostly of my own, Captivo could still not gain any significant traction. And ultimately it was sold in the pro— uh, and, and it didn't work out. And so this is like the only thing that I can find about Captivo on the internet is a case study that you helped write.

By the way, and it's like we sort of take it for granted now, partly why, and it's not like, you I'm not trying to hide things, uh, but the internet wasn't as big a deal back then. So yeah, I wasn't blogging or no one was blogging. So it was like, okay, well, why would you just say things? Like, where are you going to say them to? Um, but so one of the, um, kind of interesting things as far as kind of closing out that particular chapter, what ended up happening, I'm going to make my third sportsball reference. And this one's a golf one. It was a long putt to par. Uh, what happened was I took that company Captivo. Merged it into my first startup, which I had not sold yet. So I was doing two, um, two startups at the same time, which is not something one should do. Um, and then ended up selling the kind of merged entity. So I ended up making my money back for all intents and purposes. I didn't really lose anything, but it was a very, very long path to para. I just, yeah.

Um, so the big idea so far where, uh, at the beginning you're going to trade time for money and then at some point in your life, you're going to desperately start trying to trade money back for time. That's life. I think that's a, that's a golden nugget. The second one is cool. You can either get more hours or increase the value per hour. And that's where you started taking budget and investing it in books and training and seminar, whatever, whatever you can try to do to increase your own value. You get the job at US Steel. That's where you realize you're either an asset or a liability to this company. You're either overhead or you're the one actually creating value. If you want to be higher leverage, you got to be Closer to where the actual value is created. So then you switch, you do a software company, you do that. The lesson around negotiation. So go back and ask for more and specifically not just ask for more, but what would it take for me to be making more? It's more, more like the question you asked your boss. Is that right?

The actual lesson, um, I drew from that is the, the power of being able to reduce and frame something in a very simple, like inarguable way, right? Like the fact that it was so punchy, right? Like it was just that one sentence. I don't need to find a bunch of companies. I just need to find one. And I think I can, right? Like had that been like a 5-minute long conversation, me going back and forth or whatever and trying to make an argument, I don't think it would've worked. What made it work was the fact, and this is, I think is a very, very, it's a, like anything else, it's a developable skill. And you like are like actually Sean are the, are the master of this is being able to what I call like insight compression, right? And I just made that up. It says, can you take some big idea and kind of boil it down, boil it down to like, it's the, the essence is still captured and it's just a dense distillation, for lack of a better term, of that idea, of that concept down to something really simple. Um, because the simpler you can make it, the more likely, uh, it is to be transmissible, to be communicated, to be whatever. And this applies to so many, obviously applies to, you know, copywriting and marketing and things like that, applies to venture pitches, applies to So many things.

By the way, I think one good point to make in this is this isn't just a mindset you had when you were young and broke. Like you took my Power Writing course a few years ago. It's like, dude, this guy's a, you're a founder of a $20, $30 billion public company. He's sitting here in the course learning and seeing, can I learn something about writing? Can I get a little bit better at this one skill? You are still doing that now. Not just when you were, you know, 20 years old, it's like, oh, I'm a beginner. I gotta like, you know, start to level up. It seemed like you continued doing it. A guy came on the podcast the other day, uh, Mike Posner. He's a musical artist. He talked about he had had his first song go huge. So he thought, oh, that's what I do. I make songs, they blow up. That's, that's, that's me. I guess it's hard for these other people. It's not hard for me. And then, you know, so the first song is like, you know, whatever, 5 times platinum. His second song actually was still like double platinum, but felt like a huge failure. Third song, single platinum. He's like, I'm going downhill. And then the studio shelves them. And for years they're like, it's too expensive for you to even produce the music. So we're just going to keep you, you're on the shelf in the music industry. I was like, what were you doing during that time? And I thought he would just say he was depressed eating Cheetos on the couch. He's like, yeah, I was depressed eating Cheetos on the couch. And then I dusted off the Cheeto dust for a minute. He's like, and I enrolled in Berkeley College for Music. And he's like, I was learning to improve my singing, my ability to play instruments. I couldn't play the guitar before that. So I learned to play the guitar and he's like, yeah, I just figured, okay, this period of my life, I'll just sharpen up my skill. I'll become a better artist. And he's like, I would go to these classes with a bunch of college kids and here I am, Grammy Award winning. I've been on the charts. I've made millions of dollars as an artist and there's better singers in here than me. And he's like, it was a real mindfuck. But what I took from that whole story was, damn, that's kind of inspiring. Like this guy used that time to sharpen his skills. I think a lot of adults just stop. I think they just, oh, that's stuff you do when you're young and you just don't need to invest in learning anymore after that.

So talking about the Power Writing course that you have, and then just kind of writing and copywriting generally, is that the return on time for developing writing— I have not found the ceiling yet— is that it is just so high. I cannot describe to people, like, if you could do nothing else, let's say you had 5 hours to invest in the next month or something like that. You could spend it all on learning how to write well, and future you will look back on those 5 hours and say, boy, that was a great use of 5 hours, right? Or 10 hours, whatever the number is, right? Because that's what I consider to be a, just an amplifier of things, right? Like it, it will make you a better thinker, better communicator, better pitcher, better salesperson, better everything.

We were talking about, uh, being close to the action. I don't remember if you talked about this on the pod or if you talked about it just privately, but I had known that you bought Chat.com and we have known that you've been about agents. I think last podcast we talked about vectors and things like that. I think we had mentioned agents and it seems like that's like a big thing to you right now. And speaking of being close to the action, you bought this thing, Chat.com. I think you said on the podcast it was something like $10 million, or maybe you said 8 figures, I forget. And then it comes out like 2 weeks ago that you sold the domain chat.com to OpenAI for around 8 figures. And I think it said it was like all—

well, we should add one thing. When you came on the pod, you had just bought it and we were like, what are you going to do with it? You're like, not super sure. Yeah, I'm going to try some things. Um, but I just think it's a great domain and I think it's a great investment and you just, you had made a bet, but you didn't have the, it's not like you had it all figured out and it was all de-risked.

Yep.

Um, you made that bet then. Now here's the update. What happened?

Okay. So a couple of things just to kind of, um, so I think the time I went on the pod was like within like 72 hours of when that kind of purchase that happened. So it was just, uh, it was just done. It was not distilled in my head. I actually had a plan for it. I was going to build, um, a chat application on top of the GPT algorithm. Similar to ChatGPT. And the thesis, and I, this is, there were, there have been two times where I accidentally competed with OpenAI, which I don't advise anyone to ever do. Uh, uh, he's on like literally on the top of my list of people I'd ever want to compete with, uh, is Sam Altman. Just too smart and even a more red-blooded capitalist than I am, actually. I mean that in the most positive way. So my original thought was, it's like, okay, they put this ChatGPT thing out there. It's a demo app, right? It's like, it's there to demonstrate the power of large language models and the underlying GPT algorithm. OpenAI is a platform company. And there have been stories about these kinds of things, which is, oh, someone invents a cool new technology. I think PayPal started that way. They had some payment transfer thing and they had an app that says, oh, here's our encryption technology demonstrated by me sending you money over a PalmPilot or something like that. And they're like, oh, well, that encryption part we don't care about. We care about the actual transfer of money part.

Is it the story with OpenAI? Like they were doing this thing to sell to software companies and then someone was like, Dude, can you just make this thing so we can show people what we're working on?

Yeah, that's what— and even Sam has kind of gone on record and said that, right? They had not expected it to kind of go— it's like, this is a way for us to kind of demonstrate the technology and kind of make it accessible so people can try it. Uh, and so it sort of caught them off guard as well, right? Which is like, this was not— it was not expected they were going to get tens of millions, and it was 100 million users, uh, within a couple of months. But in the back of my head, I'm like, okay, well, that's great, but they're going to go back to being a platform company. But someone should actually create something that is that end-user application that sits on top of LLM, like GPT-3 at the time. And then it just so happens it's one of those, the universe sort of configured itself and like chatbot.com in a random event became available for sale for the first time in like 30 years. That'd never been actually used before. And I'm like, I just, I need to do this. It was like, that was kind of thing number one. It's like, I could use it for that. Thing number two, kind of rationalization to myself is that this is the COVID charge to get into the AI party, that people will take me seriously. It's like, no one really knew me in that space because I'm not from that world. I didn't go to machine learning school at Stanford or something like that. But that's sort of something that's sort of hard to ignore. And deep down inside, I'm part marketer, right? I think it's like, oh, This is a good story. It'll get people's attention.

Did they reach out to you with the idea of acquiring it? Or did you, were you like at a conference with them and you're like, hey, I have this thing if you want it.

Like, I'll tell you the, okay. So, uh, I'm going to draw the line in terms of, uh, at the transaction beyond, because my experience, I think I am at liberty to share, uh, what happened post that, uh, decision. Um, I'm less comfortable sharing. So The way it kind of came to be is that I was at a Sequoia event. I think I actually talked about this on the pod. And one of the things that Sam announced at that event, Sam Altman was there, was this, oh, you know, ChatGPT, you guys know and love, yeah, it's awesome. We're gonna like support these plugins to ChatGPT because right now the limitation of ChatGPT, it can't access third-party data sources. They can't really do anything. And it's got the data that it's got based on its training dataset, but it's like a snapshot in time. But these extensions will sort of amplify, multiply the capabilities of ChatGPT. And so that's sort of when the little switch went off in my head. I'm like, crap, OpenAI wants to create the ChatGPT of ChatGPT. It's like they're going to turn this into an actual platform, an actual end user app. And so that's when I'm like, okay, if I'm not going to do something, I think it would be unwise for me to keep that domain. It's like, look, I don't want to just sit on it if I don't have plans to do something with it. I did not want to go into competition with OpenAI because it was clear that this was going to be a big bet for them. That's not, you know, I was treating it as somewhat of a side hobby project. So I reached out to Sam, who I knew. It's like, do you know if you were like interested or like, and there were other bidders for the domain at the time that it went for sale. And my third back of mind motivation was I had a suspicion of who some of the other players might be. I didn't want them to have it either. Just the kind of competitor side of me.

Did you sell it for a profit or was it just like a, like you, like you, I think you said on Twitter, you sold it for shares of OpenAI. Was it like, man, I'll just give it to you for the cost in order to be able to invest in your company?

I thought I did this cleverly. When I made the announcement that I had sold it, I didn't share the details, but I provided a GPT prompt that says, if you type this into ChatGPT that says, oh, Dharmesh likes to buy domain names, but he usually does it because he's got a project in mind. Dharmesh doesn't sell domain names at a loss because he doesn't have to. Dharmesh also doesn't like profiting from his friends, and he considers, you know, he's known Sam for a while or so. OpenAI did buy ChatGPT. These are the facts that you know. And then it's like, and then the prompt is, if you had to guess, what do you think, you know, the, that the domain sold for? Because, you know, I'd also disclosed I was a shareholder in OpenAI. This has happened. a while ago. And so it's like, you weren't a shareholder before that.

You weren't like, yeah. So, but you would have loved to be an investor in OpenAI. And this was, like you said, the COVID charge. It was the ante in order to get there.

This was like a, even a, even a better party, right? This is the shareholder party. That's, uh, yeah.

So I think based on all that, I think I put your prompt in and it was like, Dharmesh bought the domain for $15.5 million and now owns $15.5 million of OpenAI stock. That was like the, uh, that was the, the AI answer to it. You could leave it at that.

Yeah, we'll leave it at that. Um, that's so funny.

Do you have any—

All right, so one thing I have to, I have to, I have to share with you, and this is the, uh, non-humble utility part of it, but there's a lesson in here. So there's an old, uh, Steve Jobs quote around connecting dots, and the quote goes something like, you can't connect the dots looking forward, you can only connect them looking backwards. So you have to have faith, faith in something that the kind of dots will connect at some point in your future. You just have to trust your instincts and And I've been a big believer in that even before Jobs said those words, which is you sort of collect what he calls dots. And I really like the idea because I love graphs. On my list of things that I love, it's like, okay, well, if I made an inventory of all the dots that I've collected through my life, and dots can be people I've met, can be skills I've learned, things, experience, lessons. And then over time, if I had to go back and write a history of my life and say, oh, Well, this was kind of a weird dot at the time. Like, I could never have guessed that had it been not for that dot, this over here probably would never have happened, right? Like, we don't know in a parallel universe, like, what was actually going to stick. But I can tell you for a fact that the universe as it exists right now would not have happened had that particular dot not been collected, that I had not collected it. And so my big lesson here is that you have to spend some amount of your time, and it's the same kind of lesson, just phrased differently. Around investing in those dots that may or may not make sense at the time that you're doing them, but they feel right. They feel like they could have something. And it doesn't have to all be kind of maniacally diabolical and capitalist. Sometimes it's just like, I want to collect this dot because I love this. I believe in it. I have conviction, whatever it is, right? It's like, it's you. Uh, it's your time on the planet. It's your money, whatever it is you're doing. Uh, you should be able to kind of collect those dots, but if you kind of trust your instincts, um, so, and not all the dots are going to work out. And this is the beauty. Of these kinds of things is that you don't need for all of them to work. You just need one or two to work really well, and that's it. Like, that's literally it, right?

Um, I'll use a sports reference. In basketball, there's people who you say have a nose for the ball. They just know where the ball's gonna bounce. They know where to be. The ball just sort of always ends up in their hand, end up in the right spot. You talked about your first job application was to Pizza Hut, you know, back when you're, you know, just moved to the country type of thing. But pretty quickly you found yourself in software development in the '90s, which is arguably the best place to be. Then you, you said in 2000, you started a web internet company. Internet was the next best place to be after that. Then you create HubSpot, which was a cloud SaaS company, which is arguably the next best place to be for that next decade. And now you just sold chat, uh, chat.com to OpenAI. You own a bunch of OpenAI and you were talking about AI agents. And I would say that seems like in this decade, the best place to be. And so I view you as somebody who has a nose for the ball. And what I mean by that is like the frontier that you're interested in seems to be the frontier where all of the action and the value and the trillion-dollar companies are going to get created, which means if the trillion-dollar companies are created, that means the tens of billions of dollars companies are going to be created. The billion-dollar, the $100 million, and the $10 million companies also, uh, it just means it's the, it's the target-rich environment. So I think that when you say this is the thing I'm most interested in, we should pay attention. All right. Tell us why agents are the thing we should pay attention to.

Yeah. And I'm kind of bringing it back to the kind of early, just as a thank you for the lead in. This is, that was great. Um, is that, you know, we talk about you, the audience making your first million or your next million if you're, uh, you know, further along in the, in the journey is that, you know, that first one is almost always harder than subsequent ones. And that's, And that's not counterintuitive at all. Um, I will say this though, is that never in my mind has it been easier to get to that first million than it's going to be here, like as we're, as we're living our lives right now. And part of that, um, is what, uh, agents unlock. So let's talk about agents. We'll talk about what they are, why, why such a massive opportunity and what you, uh, the audience should do about it. Um, okay. So we'll take a step back to last year. Last year was all about chat and it's like, and everyone's used ChatGPT. We all get it. We type in a prompt, something comes back. Awesome. And that's what's a very kind of interactive approach to the use of AI, right? Like you type a plot, it's like, oh, give me a blog post or do this for me. And it comes back with a response and you may do a follow-up, but it's effectively this kind of back and forth interaction model with AI. What Asians saw, and as a result of that kind of interactive model, the tasks that you assign AI are generally more discrete. That says, okay, do this for me. There's a single artifact, produce a blog post, generate image, whatever it happens to be. What agents are, uh, kind of very simply, are— it's AI software that can accomplish higher-level goals requiring multiple tasks, I mean multiple steps. So it's not just a one-shot, give me a blog post and it comes back with a blog post. It's like, I want you to do this thing, and that thing may require 10 steps. And each of those things, like as we were just talking about earlier, it might need to functionally decompose everything in order to accomplish that higher-order goal. And it has to have memory, it has to do all these things in order to kind of make that possible. But that's what an AI agent is. And right now we're going to talk about agents as it currently stands. My expectation is that agents are the new apps. It's just software, right? So when mobile came along, it's like, oh, there's an app for that. There's an app. It's like, not that far in the distant future, everything is going to be— there's going to be hundreds of thousands, millions of agents, right? The same way that there's lots and lots of apps out there. So think about agent if it's simpler to do that. It's like, it's just an AI app that happens to do really high order or can do higher goals requiring multiple, multiple steps. So the thing I think, without getting into agent.ai too much, here's kind of my view of the world in terms of how this is going to shape out. There's lots of debate going around, oh, in order for it to be an AI, a true AI agent, it has to be autonomous. You can't have, you know, it's like, you just have to be able to, give it a goal. I'm more pragmatic than that. I don't think that's a requirement in order for something to be called an agent. But here's the important part is that, so if you kind of pull out that thread, the way the world looks soon is that we will have hybrid teams that consist of humans and consist of AI agents. And the easiest, simplest, and therefore in my, I'm going to say this, with some, uh, conviction because it's better to do it that way. The easiest way to pull that off and the simplest way to describe it is if you think of the digital agent as a digital team member, because that's the easiest way to get there from here, right? It's like, okay, if you just say, I'm just gonna hand it over and the, the agent's gonna create the, like, just do all the things, there's gonna be no humans. Yeah, that might happen someday, but it's probably not gonna happen as a direct jump from where we are today. What's likely going to happen is that individual tasks will get automated and we will start injecting, uh, but having these hybrid teams in the same way we had hybrid teams before we had like all full-time employees, like, oh, I'm going to hire a freelancer for 3 months to do this because we don't need them forever, whatever, for whatever reason you did that. And they're like, that's okay. They don't work in the office. Then we had hybrid from a geographic perspective. And now we're going to have hybrid from a carbon-based life form versus non-carbon-based life form perspective.

It's basically like this. It's like We've got guests coming over. And now my wife decomposes that into, okay, we need to clean the kitchen. We need to clean this area and we need to get food. We need to order food. And so she tells me, load the dishwasher. I go load the dishwasher. Then I hand it over to my agent, my dishwasher agent, who then will wash those dishes. And so I'm kind of the, she's the, she decomposes it. I'm a human in the loop. I'm doing one step that hopefully, ideally, that we could have another robot that loads the dishwasher. But for now, I do that. But the dishwasher is better at doing the dishes than I even was and will do it well every single time. I trust that agent to do it. That's what the inside of companies is going to look like.

Yes. And it might be that, um, you know, and I think we will have humans doing the review and approval for a vast majority of tasks, right? So I think the digital team members, for lack of a better term, are going to be doing lower level tasks to start with because that's the things we can trust them with. It's like, okay, well, the stakes are much, much lower. It's like, okay, produce 10 versions of this blog article. It's really like super important for my business, but then let me pick the one that's actually going to go out. And then once I pick the one that's going to go out, because I'm a step in the process, the human doing that, then the post-production maybe is all digital. We don't know, right?

Give us an example of an agent you're using that like you actually use now because, you know, on a day-to-day basis or week-to-week basis, it's actually, you know, live. It's working. It's not just a cool demo.

At least a good, uh, nice simple example is, uh, I have an agent that says, so I really like this episode of, let's say, My First Million. And I recall hearing something about X, like some words stuck into my mind. And I want to write a LinkedIn post based on that. But here's what I want to happen. I want to— all I'm going to give it as input— this is the instructions kind of MPC model, right? It's like, OK, here's what you get from me is a YouTube video. What I want as an output is a LinkedIn post that's going to do well by some definition of do well. We have training data on that. Okay. What it's going to do is going to say, okay, first step 1, pull the transcript from a YouTube video. Step 2, figure out who the players are. Step 3, highlight the things that are quoteworthy, tweetworthy, remarkworthy, whatever it was happens to be. Step 4, figure out what the hell Dharmesh was actually asking about. There was a snippet in there that you made reference to. Clip that as well. Put that all into the thing. Now go say, okay, like, What style happens to work well on LinkedIn specifically? I was like, you write me a 200-word prompt that describes the language and the style, whether it's bullet points, whether it uses emojis, doesn't use them, like what works. Have an agent that does that, like a style creator thing, whatever. Take all of that and now produce a LinkedIn post and just give it to me.

And so you do that. You have a thing that does that?

I have a thing that does that. And by the way, the, the, the, really fun part about this, it's like Lego bricks, right? So I have an agent that does a YouTube transcript, relatively straightforward, but it's a better YouTube transcript than the one that you would just get copying off the web because there's an LLM involved. It's like, I want a YouTube transcript that has chapter headings, which is not going to be in the transcript. That's going to bold things that are actual quotes or whatever. It's going to format it in a way that's human consumable. Way better transcript than the regular transcript you get out of YouTube.

So like, check this out, Dharmesh, have you seen this? Go to mfmvolt.com.

Mfmvault.com.

My friend Greg is building this. Um, and it's not, it's not ready for, uh, you know, the big time, but here we are. Let's, let's do it. So mfmvault.com, you land here. So what he built basically a site that kind of works like what you described just for specifically My First Million podcast and fans. Okay. So he's like, all right. He was like, I don't just want summaries. I want, he's like, you know, I like MFM because it's got ideas. It's got frameworks. It's got stories. And those are like the big things that he really cared about. So if I just go like, first he's got just like a bunch of, and AI is basically extracting those from every episode. It's like searching for frameworks, searching for stories, et cetera. But like, let me just show you this. If I go to episodes, we'll try this live, see if this works. And I typed Dharmesh, and this is our last episode we did in 2023. So it's got the, the, you know, the overall summary with chapter titles, like you said here, but check this out. So if I go to stories, it's like, ChatSpot's $1 sale, uh, Pandora's Manual Musicians. It's like the 17-year evolution of chat. And if I click that, it'll take me to that moment, but it'll also summarize it. There's also frameworks in here, like an AI immersion week. Basically, uh, the idea here was how I dedicated a full week to just hands-on experimentation with AI tools only. And so it is extracting and categorizing and linking these ideas from the podcast this way. But to do it, he's like you said, he's strung together 5 agents. There's the, the listen for when there's a new episode. Then that guy says, I found a new episode, pass it to the transcriber. Transcriber's like, I transcribed it, pass it to the summarizer and the extractor passes it to those guys. And he's like, great, turn that into clips, pass it to the clip guy. Right. And each one of those is their own agent. And I think that's, that's, and then like you said, it's composable Lego block. So. If I want to use a summarizer for something else, well, that's, once that agent exists, he can summarize anything, not just MFM episodes.

Yep. That, that, that is the future, Sean. So, um, so just like a quick one sentence description. This is the positioning. Uh, I'm going to test it out on you guys as well. Is agent.ai is the number one professional network for AI agents. It is also the only professional network for AI agents.

It's LinkedIn for agents.

Yes. And so the question is like, why, why do agents need their own professional network? Right. That's a reasonable question to ask. And the answer is, if we imagine that I happen to be right, that we're going to have this hybrid world where we have both, uh, AI teammates and carbon-based life form teammates. Well, how are we going to find those people? Right. So we have Fiverr for humans that we can sell. I need a logo created for whatever. I can go to Upwork. I want to hire someone. For the next 4 months to do whatever skill set or whatever. There needs to be an equivalent of that for AI agents. I don't know what's out there. I don't know. And here's where it starts to get really super cool. So imagine a professional network and it has ratings and reviews. It's got their experience. Like, oh, I'm an agent that does this. I've been used 40,000 times. And here are the people that like me. Dharmesh follows me on, on agent.ai, right? Because humans can follow agents. Agents can follow other agents. And what's going to happen over time is that agents will be able to hire other agents on the network because everyone knows what everyone else can do. They can try other agents out. It's like, oh, I've been given a budget of $100 to try 5 different agents to figure out which one is the best for my particular use case. And it can go without human intervention, just go try best. Like, oh, network, like, yeah, I'll pay you this other agent. So over 30 years, I built a lot of software that is what I call solo software, right? Like just like software for me, for my public speaking, count the LPMs in a talk, that kind of stuff. And then I found that most of those things can be better.

Oh yeah. I like it.

Yeah.

By the way, I did not invent that term. Stand-up comedians use that. That's been around forever. So yeah, I stole that from—

Sam, it's something that funny people like us, we know, but we wouldn't expect you to understand that. Dharmesh, can I ask you a, I'm going to ask you a rude question and then I'm going to ask you a thoughtful question, but I'm going to start with the rude question. The rude question is this, dude, you're a billionaire and you're super smart and you love all this new tech. Like, why aren't you doing the Elon thing? Elon's like, cool, I did my Zip2, then I did PayPal, then I did Tesla, SpaceX. I'm going to keep kind of building new companies, but bigger, badder bets. You've been at HubSpot for so long. You've been there for, you've been doing CRM for like 30 years. Like, don't you feel like You want to just spread those wings, baby, and just fly and just go build your rockets. And like, what's your— why aren't you doing like a next grand act? Uh, that's my rude question for you.

Yeah, no, it's, it's, uh, it's not rude at all. And the answer is actually quite simple, uh, and has the added value of being true, is that this sort of is my next big act. So the problem is, okay, so let's say you're playing a video game, pick up your video game of choice. And you've kind of ground it out, you've built the things, you've got the weapons, you're there. Like you're now in kind of power mode. You can do now, let's say it's Zelda or something like that, which I love, one of my favorite games. And now you can just go out exploring and try things and do stuff because you've got all of that. If you're gonna play a new game, there's a bunch of stuff you still have, even though, because you have to sort of get right, you're gonna have to build a team. I'd have to go find a co-founder. By the way, I've won the co-founder lottery, right? Like I didn't, Like no one knew it at the time, but that has a massive impact on your outcome. It's like there's so many things I'd have to get right just to be able to kind of do the next thing. I think my odds are doing the next, like even something like agent.ai, my odds are higher pulling that off with the infrastructure I already have beneath me in the form of HubSpot. And sometimes I have to squint a little in order to kind of squeeze the thing and make it fit in the HubSpot-shaped box. And I have mechanisms for which I can kind of do that. But I don't feel like I've ever been, uh, kept from doing the thing that would have been my big bold idea as a result of being, uh, a CTO at HubSpot. If, if I ever, like, if that were the case, yes, I would go, I was like, you know what, it's, it's been a great ride. Uh, you know, wish the company well and we'll continue to be a cheerleader, but I don't, I don't accept your answer, but I, why don't you accept it?

Well, let's break it down. He's a logical guy. Let's break it down. So let's say he has a, has things he's excited about, new technologies, new ideas, just potential, potential to create cool shit in the world.

All right.

So there's two ways of looking at this. Either HubSpot, um, HubSpot is the best place to do that, which I would just view like, like, I'm not, I'm not saying the infrastructure. I'm just saying like the company HubSpot, which has like a specific mission and set of customers it needs to serve and like existing business model and all those things. Like, The odds that your creative brain would latch onto an idea that also was like, should be on HubSpot's roadmap just seems like unlikely to me, or just like a, an unnecessary limit that I wouldn't put on. Okay. So then let's say there is an idea that you, you get excited about your version of SpaceX or whatever it is, your Neuralink, whatever the idea is, either, well, HubSpot's not limiting me and I'm getting these benefits. Okay, cool. There's that trade. So it's kind of like, what would you gain if you actually were out on your own? You would like, there's like all these things, like when people have their job and then they try to have a side hustle. There's one great thing when you go and you quit your job to do a startup, which is that you've now quit your job to do a startup. You've now told the world, you've told yourself, you've told everybody that like, I'm going to make a thing because I just gave up a thing. And that means I got to have a new thing now. And I think that the, uh, burn the boats thing is like probably one of the only assets or advantages a startup in general has, or an entrepreneur has, is that they, they just go all in on something. They don't have any meetings about anything else. They don't have any distractions. And they've told the world, I'm gonna do this. And I think there's something very powerful about that. And I think the, if I really wanted to turn the knob and be like, what would be the, and by the way, you don't have to do this. I'm not saying one needs to do this in life, but it's like, let me see what I can, let me see how fast this car can go. Let me see what I'm capable of. I just view that you're more likely to see the highest potential version of you outside of HubSpot versus doing side projects while using HubSpot and then doing, talking at Inbound and then taking these meetings. There's gotta be the unblended version. The concentrated version had to be more potent than the blended version. So that's my case.

Sean's trying to convince a billionaire of a founder of a $35 billion company. Be like, hey, what are you going to—

it's the ant telling the elephant how he should be walking, right?

What are you going to quit your job and actually do something with your life and go in on your side project?

Take it as a compliment. It means I view you as an Elon-level character, you know.

I, I, that's, that's a very high praise. Thank you. Um, but I'll say this, like, I think it's, uh, it needs to be said. I am a big, big believer, um, in kind of taking that leap of faith, right? Um, and, and going out and doing the thing. And that's great. And I'll say it's gonna, it's gonna sound defensive, but as I don't mean it to be, um, but like, as I kind of write the next chapters of my life, as I'm looking out, like, one of the questions I've asked myself is like, okay, It's like, what does success look like? Right? Like, okay, so what do I want to reflect back on of the things that I did, right? And a couple of things have kind of emerged from that reflection is I like to build things. And that is the truest thing that there is. I like to build things, right? And so one thing I've kind of managed to do, which doesn't happen often, so I don't have any direct reports because that would keep me from building things, right? If ever there was a time where it was like, oh, like I can no longer build things as a result of X, whatever X happens to be, I will break down that wall, whatever it is, HubSpot or otherwise. So that's one thing. And I will say this, I mean, I think your point's really well taken, which is most of the time we have these kind of externally imposed rules on us. For instance, if you're an engineer, it's like, well, you're CTO, you shouldn't be writing code anymore. It's like, and I do not accept that thesis because software is a creative discipline. It's a very hits-driven business. You have to be right a very few number of times. It's like, we don't tell a musician that's really, really good, oh, you need to stop writing music and doing music and go hire somebody. We don't tell exceptional writers to stop writing and manage a team of writers. Keep writing. Do your best to minimize the stuff that's not writing time. And that's what I feel like I'm doing. I'm maximizing my build time. And to me, it's in my personal mission statement. Is to help millions grow better. Like, that's the simple— like, I want to be able to look back on it and say I had a positive impact on the most number of people. Like, that, that multiply out, like, X amount of impact, whatever that impact is, on Y number of people. That's my truth function. And this is why I don't do one-on-one meeting, because it doesn't scale, right? This is one of the reasons I'm here and not elsewhere. It's not just because I like you guys, it's because I can have an impact. And the reason I chose the topic, it's like, oh, this is what I want to talk about. It's like, Ah, you know, what's the best way for me to use this time that if I look back on it, or the people that are spending an hour and a half-ish, um, you know, listening to this, like, was that a good use of my time? Did it actually, did Dharmesh deliver on the promise of at least marginally increasing my probability of making my first or next million, right? That's the—

you, you, you do this a lot. You kind of like are telling a story and you have like these little like bits that are like wildly fascinating. One of them being that you have like a personal mission. Do you have personal values like a company does that you, you and your family or just you operate against?

We've talked about it. We haven't done it. We have, um, so the, the HubSpot values are effectively the founder's values, right? That's where the original kind of company values, uh, came from. And there's, and most companies are actually a reflection of their founders.

Um, what, what is the most controversial or, uh, value that has the biggest trade-off? Like not everybody would choose this, but we choose this. What, what's, What is that for you guys? Right? Like, not like integrity or, you know, like whatever, things like that.

Yeah. One of the ones that, uh, almost didn't make the cut, uh, not because we don't agree with the value, but there were others, is humility, like humbleness. Right. And like the common argument that comes back is like, we're supposed to be a winning team. We're aggressive, which we are. Right. And so people often confuse humility with a lack of confidence or lack of aggression, assertiveness, or all these things. That's not it at all, right? The humility is being self-aware, is being able to recognize and not being a know-it-all. It's like, I'm here to learn, having that kind of, uh, and, and that is a large part of what drives HubSpot. And so I kind of, I've fought for that value for a long, long time. The second most controversial one is empathy, which is our second value. And that, uh, it didn't always used to be empathy. We changed it along the way.

Sam, what's our values on the pod?

Yeah, that's a good question. The reason I've been asking this is like, Blackpink. Well, I've been like thinking about like, do I have values? Like what are my values? Like it's kind of cool.

Is denim a value or objective?

Like it's kind of cool to like codify it. Uh, but no, I like, we don't, MMM, well, like we kind of have values. Like we say the, we've had people in the pod who are like, have done like bad stuff and you're, and they're like, are you going to like crucify me? And we're like, well, like our default is not to like criticize. It's like to build people up, but sometimes that might happen. But anyway, we like. So we have a couple, but it's interesting to kind of explicitly say these are the values of X, Y, and Z. And Mark Zuckerberg, I read this cool thing about him, or maybe you even told me on the pod, Sean, where he was like, a value means you have to sacrifice something. So move fast and break things means we are going to move fast. And because of that, I am okay with breaking stuff. Like it, like too many people, their values are things that are just obvious that don't involve a sacrifice.

That are just platitudes. Yeah.

And by the way, there's not, there's not many of these. So for example, move fast and break things, I think is in the pantheon, the hall of fame of like, you know, values. Um, another one is like Ray Dalio's Bridgewater thing. They have like radical honesty or radical candor, which is like, we are going to uncomfortably be honest with each other. And we just think that that maximizes in the long run, but in the short run, this is not going to be like anywhere else you've worked because we take that seriously. We take the trade-off, which is discomfort, for the upside of being radically honest.

So I think that's— One thing I have, just because it jumped to my end, and I think it's a useful thing. So we talk about maximizing, right? And that's, I love that word. And many of you have likely heard of this notion of like finding the maximum. And then the trap that people fall into is finding the local maximum versus the global maximum. And Just from a layperson's perspective, it's like, imagine that you're looking at a graph, like a normal— imagine a bell curve, for those listening. It's like, oh, there's a point at which that value is the highest, right? It's the top of the hill, so to speak, in mathematical terms. The local versus global maxima is like, okay, well, that's the highest point. But let's say you were to zoom out on that same graph, and then there's this other bell curve right next to it, which is an even higher maxima. It's like, okay, well, if you were just solving based on that chart that you were looking at because you were zoomed in, you didn't actually find a maximum. You found the local maximum, not the global maximum. That's the— and so here's the— and so that one, that part of it is obvious. The non-obvious part is that often in order to even see the global maximum, you actually have to climb the local maximum hill. It can't be an abstract sit on the sidelines. It's like, oh, I'm going to go wander around. What you have to do sometimes is you have to make the effort to climb the smaller hill you get to the top of the spot, it's like, oh, now I see the landscape and there's that massive mountain over there, which is the thing that I'm actually meant to go do. Right. And so part of it, and this goes back to the kind of connecting dots thesis as well. It's like sometimes you have to do the thing that does not seem like the big bet in order to have the perspective to see what the big bet's going to be. Right.

Sam, have you heard this concept of RAS? Like instead of SaaS companies, RAS companies, you know what this is?

I saw him put that on there and I was like, is that Like a different word, like riz? What does— I was like, does this like razz? Is that— is he gonna like make fun of— is razz meaning like you're gonna make fun of me? Like I'm gonna razz you?

No, this is a big idea. Dharmesh, could you do the—

do the razz thing? Yeah, well, I'll be the other. So we all know SaaS, which is software as a service. And we contrast software as a service to software as it used to exist back in, like back in my day, I can say that now. And back in my day, software was shipped in boxes on CDs and things like that. And you kind of plugged it into your computer and loaded the software up, um, to do whatever you wanted to do. And software as a service was, oh, you don't actually buy the box, you don't buy the CD or whatever. We just provide the value of the software to you as a service over, over the internet, over the cloud. Results as a service is like, actually, you don't even access the software. You tell us what it is that you actually want to do. What's the outcome that you're looking for? And we'll just sell you that.

You want the LinkedIn blog post at the end.

A good example would be is like, oh, uh, I could sell you like legal software to kind of analyze a contract in the real estate space that will give you commentary on whether this matches benchmarks or even in the VC world, uh, a term sheet or something like that. It's like, oh, here's software that will help you like power write, uh, a real estate contract and do the—

well, it's like, it's like HubSpot. Here's software that you can write blog posts to capture emails and get more customers.

Yes. But this thing is like, okay, well, what if you could just skip the intermediate steps? Like, oh, you want more customers? What are you willing to pay for customers? And this, this idea is almost as old as time, right? Which is because we've had, like, in that particular example, we've had lead gen companies forever, right? Which is effectively results as a service. Like, don't worry about phone numbers. Don't worry about this thing called the internet or whatever. Pay us X amount of dollars every time your phone rings.

Well, and it's also a sales technique, which is like, do you want guests to feel great at your home and to be popular? Okay, buy our vacuum to keep your carpet clean.

Yes, that's exactly, yeah, we've had that in the copywriters, like people don't buy, don't want drills, they want holes, right? Like that's the drill is a tool, hole is the actual outcome desired. So RaaS is kind of the next kind of wave of software, which, and there will still be software being used by whoever's providing the results of the service. That's how the thing gets accomplished. But the way it might be packaged and sold, you know, might end up being RaaS. One thing I'm just closing out on the agent front as far as the call to action. So I forget the name of the guy that built the MFM Vault. Greg. Yeah, Greg. Okay. So what Greg did in terms of sequencing these things together, right? So he effectively built an agent, right? But it has multi-steps. Each individual step may call other AI tools. Agent.ai not only is a professional network for distributing agents and finding agents, discovering agents, reviewing and rating agents and talking about agents, It also has what's called an agent builder, which is a platform for building agents without writing code.

You've had a good quarter. Uh, HubSpot stock, I think almost hit an all-time high. You sold the business, or you sold the domain to OpenAI.

Came on the podcast.

You came on the pod. You're, you're, you know, I don't, I don't care what they say about you, Dharmesh. You're doing okay.

I'm doing okay. I'm doing okay. Uh, thank you.

I don't care what they say. You're all right.

What I love about you is you have a bunch of things that sound like paradoxes. Like, you're extremely gentle and kind. You're also, like, I would say, competitive and aggressive in other ways. I think you are humble, but then you're also a marketer, and you're like, oh, I could see the marketing value of this and the practical value of this, but I also, you know, I'd rather be, you know, quiet, low-key. I don't need to brag. And so you have all these, like, contradictory things, which I think makes you interesting.

Hey, by the way, is this— you said there's— you go, as soon as I get on a leaderboard, I want to be number 1.

Yeah, you're like, but then I don't want to be on the list.

Is this a leaderboard where you're like, I would like to be richer? Because it would be like, like, I think you're— you might try to be cool and be like, no, I'm happy. But like, I think with every level you are on, whether you are with 1 billion, you want to get 10. Whether you have 10, you want to get to 50. Just like, no matter how ripped you get, you want to get a little bit more ripped. Like, Um, is it, is it how much of a motivator is like, you know, it says 1 on Forbes now. How do I make it say 10, 10 billion?

Yeah. Yeah. Yeah. Well, it's, it's a really good question. I tend not to have explicit goals. Like goal setting is not something, and I'm not discounting it. I'm not, um, disparaging it at all. I know some of the smartest people, um, you know, have goals. They have those kind of like really concrete things that they're shooting for. It's not that I don't do it now. I never really did that, right? It's like, okay, I want to get better. I want, you know, I want to have money. I want to be able to have freedom, make choices. I want to have the things that I— and this is, I've said this, uh, you know, before, I, I like to configure the universe to my liking, to the best of my ability, and whatever resources I can kind of accrue to help make that possible, I, I will go try to find a way to make that possible, right? That's, that's, um, but like, so like deep down inside my soul, I'm a Like I'm a math and physics guy that's not smart enough to be a math and physics guy. And my truth function is, like I said before, it's like, okay, I'm trying to create, based on that mission statement, positive impact for the most number of people, like multiply X by Y. And the marketing is part of that. It's like, okay, well, I'm not going to be able to impact people if I'm not doing some marketing. It's like, I can say the most brilliant things in the world. If only 17 people look at them, then the value of X is 17. For that particular unit of, uh, unit of work. And that's just not how I operate. I will make sacrifices on other fronts in order to solve the true, like, truth function to solve for the mission, uh, for me personally. And that's sort of, that was the, uh, the balance there.

We talked about a bunch of stuff. You had opening remarks. Do you have a closing remark? Is there a, is there a way you want to end it? Did you achieve your mission of, of, of saying what you thought would help somebody increase their odds?

Uh, my ask, my favor is, uh, leave a comment and let me know what you thought. That's where I keep scoring. That's the leaderboard I'm after right now. You say I'm just like, I'm number 5 on the YouTube list. I know comments and engagement actually help the algorithm probably more than likes do, by the way, for the record.

Um, so dude, you're the man. We appreciate you doing this. Um, I have a notebook here, uh, where I take notes. I'm not going to turn it. I don't want people to see it, but, um, I have filled 3 pages of notes. So you're the man.

It's always a pleasure to be on. Thanks for having me. Thanks for indulging my quirks.

Dude, you're great, man. You're fun to hang out with. You are fun to hang out with. You're fun to talk to. I feel energized when I talk to you.

It's good to see you guys.

We appreciate you. That's the pod.