How To Come Up With Billion Dollar Business Ideas | Hubspot Co-Founder Dharmesh Shah

So this is what I call like the trillion dollar Venn diagram of success, right? Uh, I just made that up. But so you draw those circles of your skills and say, okay, well, I am now not like one in a million, I'm one in a billion, right? Or one in 5 billion, whatever that is. And if you can convert that into some kind of monetizable business thing or whatever, that's when magic sort of happens. So, so that's kind of thing number one is like, what's your thing? What are your skills? Um, and what drives— how much value will that intersection create is two things. One is how rare is that intersection, whether it's 2 circles or 3 circles or whatever, how rare is it? And then the other one is—

So on the pod right now, we've got Dharmesh. Dharmesh is the founder of HubSpot. He's, uh, your technical title is CTO, right?

That is correct.

I see you more—

I think this means that, uh, that you have to do the ad reads for your own company today. Why are we talking about HubSpot? You do the ad reads. You tell people why to buy.

You're talking about Hostpot because you guys do a much better job. I am terrible at that. I'm terrible at the promotion side of things.

But the, uh, Sean, do you— you're renting a house right now?

Yeah.

And Dharmesh, you do not rent though, right?

Not anymore. I did for a long, long time.

I'm a big believer in rentals as it turns out, but I, uh, I'm staying in Brooklyn for the summer and I rent a furnished house and it— or an apartment and it is so much better than owning a place and having to worry about stuff all the time. It is so much better. I, I think I, I'm on the renting train. I think now, like, I've kind of been there, but like, I actually love it more. Do you like it? Because Sean, you owned a place in San Francisco for like 4 years and then now you rent again.

Way better. In fact, every time something breaks, I now just have joy to be like, let me call somebody else. It's their problem. It's their cost to fix. They have to arrange it. They have to do whatever. And I don't have to think about it. Plus also in California, property taxes are like insane, or like in San Francisco, because the, the, you know, the house price is so high. So, you know, even if you tried to do the calculation, it's so hard to beat just this annual property tax every single time on rent.

Wait, so Dinesh, if you, if you had the choice again, I mean, I, I think maybe perhaps you bought because like your wife wanted to or your kids wanted to, but if it was up to you, Even with a family, would you be a renter?

If it was up to me, yes. Because just the decrease in maintenance and wear and tear on one's psyche and soul that ownership bestows upon you is just not worth it. That's my thing. It's just like, I don't want to worry about those things. I want to get as close to living in the Matrix as I possibly can, right? And renting is a step closer to being in the Matrix. We don't have to worry about physical things and atoms and things like that. It's like, ah, that's somebody else's problem. I just show up.

How, how many people in your socioeconomic, like, ballpark, like, uh, you know, founders of multi-billion dollar companies or people like you, do you think also rent? Because I think that'd be a sh— if it were a fair amount, that'd be fairly shocking to a lot of people. But do you know a bunch of people that are similar to you that still rent?

I know people that are similar to me in terms of that they would prefer renting because I've talked to them about this, but almost everyone I know now, once you get a family and once you have like other things that you're trying to factor in. For instance, you know, one of the things my wife loves gardening and loves having a yard and that's kind of hard to do in a rental. Not that you can't do it, but it's right.

One thing that a guy told me who's similarly, you know, I think he's probably got like a $10 or $20 million house. He was like, it, he's like, renting is amazing until you want the, until your wife wants a specific house. And then once your wife wants a specific house or in a specific neighborhood, that neighborhood, like, like higher end neighborhoods have no rentals. So you just can't get into that neighborhood, which means you can't have whatever. So then you're forced into a different path. And so I thought, you know, it's a, it's a version of good problems to have. So we'll count it that way. Um, all right. What are we talking about? Where should we start?

Well, you have a few things left over from the last episode, Sean. I don't know if we want to jump into some of those. Um, let's do one.

Let's do one because I think you will have a take on this. So, so have you ever read, I don't know, do you know Paul Graham, by the way?

I do. We're not best buddies or anything, but I do know of him. I've met him. Yeah.

So he's from Boston, right? Or Cambridge?

Cambridge. Yep.

Yeah. So you guys know one another.

He wrote a blog post back in 2008. It was October 2008. So this is like right after the crash and it's, it's just, if you go to paulgramm.com/badeconomy, um, is the name of the blog post. And he makes this case where he goes, The economic situation is apparently so grim that some experts fear we may be in for a stretch as bad as the mid-'70s, which is when Microsoft and Apple were founded. And as those examples suggest, like a recession may not be such a bad time to start a startup, but he, which you've heard before, but I thought there's one interesting part where he goes, I'm not saying it's a good time either. The truth is more boring. The economy doesn't matter much either way for, for a founder starting a startup. And I actually thought that was a really good point because I hear this so much. It's like, I, I'll talk to kind of young founders and they, listen to Twitter and they listen to podcasts and they listen, you know, they listen to kind of these, like a lot of it's like, you know, VCs who are, you know, also pandemic experts and also, you know, you know, macroeconomists as well. And so they hear and then they sort of start to adjust their plans and their mental models and like their room for everything. It's like, dude, if you're a startup, you're like an ant in this world. Does the ant care what's going on with the presidential election? No. Like You basically just need to build a product. You need to carry your little piece of dirt. It's like build a product, get a customer, get 10 customers. Like it doesn't matter if the, if the economy is bad, if you can't get 10 customers, it's not gonna work anyways. And so I thought it was a great little blog post talking about like kind of starting a startup during the downtime, which is where I think we're about to, or we just officially entered a recession again. So, yeah. Uh, I was curious, Dharmesh, do you have any thoughts on that?

Yeah. So my position is I, I lean more towards kind of the Paul Graham end of the spectrum, which is I think it's either neutral, that it doesn't matter. It's one of the things you're suggesting towards positive. And the positive elements of being in a kind of downturn in the economy or recession is that things become available that would not have been available to a startup before, like talent. It's like, oh, well, there are people sitting at Meta, Facebook, or sitting at Google right now that may be reevaluating their lives, or they may have just been let go from a venture-backed company that raised $200+ million. Right. So now you've got this talent that's coming on the market that might not have come on the market before, uh, things that were super expensive like buying Google AdWords or certain marketing channels because you have this glut of money and glut of venture capital. Um, you know, I think of venture capital as a very efficient machine of turning like money from LPs into Google AdWords revenue, right? That's, uh, they're just a conduit between the two. Um, and as in a downward economy, you're going to get less of that kind of glut of money flowing in, which drives the cost overall down for certain things that I think are important to entrepreneurs. So I'm I'm generally net positive that a down economy is actually a relatively good time to start a startup.

For like the last 18 months or, you know, whenever, like the last 24 months when everything's been booming, I've, uh, my wife works at Airbnb and, uh, you know, I've got a lot of friends that work at HubSpot, obviously HubSpot and all these, and Sean was at Twitch. So we have like some, some perspective on how, on the salaries of big companies. And I've seen some of these salaries and they are crazy, crazy, crazy, crazy, crazy. As the, as like a leader and, uh, the biggest shareholder of HubSpot and you like see these, see these numbers, are you thinking to yourself like this, like we can't afford to pay someone like an entry-level person $250,000 a year. I don't know how this is gonna work. Like what, what's your perspective on that when, when these salaries are going so high and now it's like a little bit normal, more normal.

Yeah. But as a, as a startup, I mean, you can't afford those salaries anyway, right? Unless you are one of those kind of rare exceptions that has $50+ million going outta the gate, which is, very, very rare. And so, you know, one of the things a founder has to kind of get good at, it's convincing really smart people to do this irrational thing, which is join you in your startup, right? And if you can't, if you can't do that, if you can't make that sale, which is the most important sale you'll make, is being able to kind of attract people and then its customers, um, it's not going to work. So you have to do one of two things, um, either recognize kind of superstar talent and give them something they can't get, um, because it's beyond competence. It's like, oh, you'll learn more here. Oh, you're gonna do your own startup someday. This is the place to get your startup MBA because you'll be exposed to a bunch of things. You'll meet your future co-founder of the company, those kinds of things. Um, either you have to do that or you have to say, I'm going to be really good at identifying diamonds in the rough. People that have not made it, uh, to the $200,000+ $300,000+ salary yet, but they will someday. I caught them early in their kind of evolution. And so I can get them there. That's the— so it has to be one or the other form of arbitrage. Otherwise you, you can't play the game. That's just not, uh, I don't think it's viable.

I, I'm doing— when you're saying that, it's like resonating so much because it's basically all the 3 things we just talked about I'm doing. It's like I started the Milk Road in January this year. And so, you know, it's been— it's about to be 6 months or it's been 6 months. And it's like, here, let me start a crypto company right when crypto crashes, you know, like 70, 80%. And at the beginning, Ben, even my co-founder Ben, he was like, you know, The only thing I can see going wrong is if crypto goes in a bear market. I go, well, crypto is going to go into a bear market. Like, that's like one of the few certainties of crypto is that it goes up and down. And when it does, it is dramatic in both ways. It goes— the elevator is dramatic in both ways. And I was like, you know, so it's just a question of like, do you— what do you think, that kills it or do we just make it through? Like, there's— that's really all we have to think about here. So that was the first part of starting in a bad economy. The second one on talent was I recently hired this guy and he quit a pretty well-known, uh, venture-backed company that I think had just raised maybe $50 or $100 million. And he joined, and I had talked to him a little bit before he joined. Like, he was thinking about doing his own startup. He had— we had traded a couple emails, nothing serious, just he had— he was wanting me to use his product. Then he took a job at this place. All right, whatever. I forgot about him. Then he emails me, and I shared this on Twitter. He emails me, subject line, I have made an irreversible decision. And I was like, okay, I gotta click this. What's inside? And he's like, I just quit my job and I think you should hire me. And I was like, okay, direct and to the point. And he tells me why, blah, blah, blah. And so I was like, all right, boom, I'm sold. Very bold approach. I already liked your hustle before this. 'Cause when you were hustling to try to get me as your customer, I was like, this guy's good. Um, so, okay, let's do this. And I made him a job offer, which was not like, you know, a Silicon Valley job offer, but the guy lives in San Francisco. He was working for a Silicon Valley startup, so he was like, Oh dude, that's like a 50% pay cut. And I was like, um, and I didn't, I didn't say this out loud, but in my head what I, what I felt, I, I told him, I was like, that's what I can afford to pay right now. And like, look, you come crush it, the sky's the limit, but like, that's what I could pay you right now, uh, sight unseen. And I said, and in my head I was about to tell him the, the line that I had heard from Warren Buffett. You guys probably heard the story, but when Warren Buffett goes and tries to work for his, you know, kind of hero or whatever, Ben Graham. And he's like, you know, I'll work for you for free. And Ben Graham goes, your price is too high, sir. Which is, which is the truth, which is the idea that you got to shadow Ben Graham and work side by side with him every day was you should be paying for that if you really want to be like a successful investor. That's how I felt. And I didn't want to say it because it's kind of arrogant, but it's like, dude, if I take you under my wing, my team is like 3 people. If you become one of those 3 and you're working out of my— he came over to my house yesterday. You're sitting by me working at, you know, side by side every day. Like, really, I'm providing more value to you than you are providing to me at that point. And like, there's still a, you know, I appreciate the value you bring, but let's like, the dollar amount is like the salary dollar amount is not what, not the value you're getting. And I think he knows that intuitively and that's why he said yes. But like that Ben Graham story always stands out.

Family.

No, no, he's a young guy, just graduated from college.

But here's the thing, I think people have a couple of thoughts on that. One is the salary slash compensation is just one vector of value that you get from a company that you join, right? Another one that you get is you get the learning, whatever it is that they get exposed you to. Another one that you get is a network that you build while you're there, right? So there's all these other things that also in kind of an aggregate, and maybe, and I think it's common for people to over-index on the compensation or the kind of current compensation, um, and under-index on other things that And then there's just the raw emotional value. Do you like being around the people that you're around? Do you enjoy the idea that you're working on? Like, is it— those things matter, as it turns out. I have a fun HubSpot story. So when we started on this compensation thing, Brian and I had to pick salaries for ourselves, something more than zero. And so we picked $5,000 a month, right? It's like, OK, well, it's a number. And obviously, below market value. We'd been out in the market for a while and had worked in our lives. So when we hired employee number 3, we had to decide what we were gonna pay them, $5,000. Hired employee number 4, $5,000. And so we just built, it's like, okay, if you're here for the salary, you're here for the wrong reason, right? That, that's not why you're gonna join this Motley crew of folks. And that lasted for like a while. It's like we, and then we, and then it kind of has this inertia built in where it's like, okay, well all of us sitting in the room chatting with you that we're trying to get you to join the company are all paying each other, I mean, paying ourselves $5,000 a month. Now what do you think you should be able to get when all of us are making $5,000? Of course that doesn't last forever. And you have to, uh, you get—

what was the pitch at that time? So it's not like, you know, no offense to, to HubSpot, but it's not the sexiest idea. You're not saying we're building the electric car here, you know, like you didn't have that going for you. Um, you know, you might've had like a, you know, your own magnetism, which is like, you know, like for me, I get this cheat code cuz like this guy, he listens to the podcast and, and this happens. This podcast is a great talent pipeline for us because people will listen to it and over time they just, they decide for themselves either I think this guy's a dummy and he annoys me, or I think this guy's smart and I really like, you know, I'd love to be, hang out with these guys. I think I could learn a bunch from them. And so it becomes an unfair advantage. But you didn't have that back in the day. So what was your, how did you convince people to do this $5,000, you know, Lego block of, uh, salary building?

Yep. So we cheated a little bit, right? Because, um, of the first 8 people in the company, 7 of them, uh, came out of MIT Sloan, the same school that Brian and I went to and we met in class. So it was kind of in-network kind of thing. It's like, okay, well it's just, a bunch of friends that sort of know each other in network or whatever. Let's, let's go do this thing. Right. And it's also, and they were kind of far enough along in their careers that they were not missing meals or anything like that. Right. They had just gone to, you know, business school or relatively, uh, good business school. And, and so that was it. It's like, and then the other thing, and this is the, uh, part, there's equity, but there's also the, like, this is not that risky, dude. Like, let's say this doesn't work out and we end up being chumps. So the idea is really bad 3, 6 months from now. You will basically be able to pick up where you left off, right? There's like, there's no loss other than the opportunity cost of those 3 to 6 months. This is not like an irreversible lifetime decision that I've made this call and that's all I'm going to have to be able to do for the next 5 or 10 years. And that was enough. It's— yeah.

What did things change? How many people do you think, how many people do you think at HubSpot have made like 8 figures because of their equity? And once you worked with those people for a long time and you're like, oh shit, like we, the company went public and like You don't need to work anymore, which, and, and does that change the dynamic?

Um, it hasn't. So to answer your question, so I always have to, there's this little, it only takes like a second and a half for me to translate 8 figures into what is that actually? So that's $10 million plus.

Um, yeah, like maybe, maybe, maybe $5 or $10 million is like the number where you're like, fuck this, I don't need this job.

Uh, probably somewhere in the 20 to 30 range, if I had to guess, of people that have made that much, um, you know, over 50, maybe even 100, like millionaires in the 7-figure range. Uh, but even when that was happening, right, like, well, a couple of things. One is it distorts it a little bit because as a private company, even though the valuation from the last round or whatever is X, uh, the shares are not liquid, right? So they're worth it, but they're worth it on paper. They can't go out and actually sell their shares. So that's kind of thing number one. Um, and so it doesn't, even if they wanted to, doesn't, we can't really change behavior. You can't go off and you know, buy something with, with, with your shares. So that's thing number one. But thing number two, it's that we did have like this kind of esprit de corps, right? It wasn't really about the money. It was about winning. It was about kind of building something together. And I, I like to believe that it wasn't even really the idea that if we had taken that same early group of 20, 25 people and parachuted them into some other company, into some other industry, there's still software and SaaS. That we would have likely done reasonably well as well. I think it came down to the people had good chemistry, they were focused on the right thing. I think we, our early hiring policy was to hire kind of smart people that get shit done. That was kind of the thing, right? We want people that have high, what we called high wattage. They were like measurably smart. If you had to have them take an IQ test, we didn't do that, but measurably smart. But there's lots of very, very smart people in the world, but they have this kind of predilection to action. Like they could not help but like if they found a problem, they're gonna go try and start solve it. They're gonna jump in, you know, feet first and they're just gonna do it or head first, whatever the phrase is. And that was enough. So we, and we made a deliberate decision not to hire what we call press release hires. A press release hire is when you hire someone and then you feel compelled to issue a press release, say, oh, HubSpot just hired the VP of sales from such and such company, whatever that is, a 30-year background in doing X. If we felt like we ever hired someone that was worthy of a press release, we did it wrong, right? That's not the kind of person we were looking for because they may have done amazing things at Google, Microsoft, Facebook, pick your company of choice, but the startup is such a different context and you're, you're paying for these kind of specialized set of skills that may or may not be relevant. Arbitrage is really, really hard. So we're bigger on the identify diamonds in the rough, people that are going to be big, you know it. It's like you're buying a stock early. versus going after the folks that already were press, press release worthy.

So I think I, uh, that's been my skill. Sean, you've kind of seen my journey. I think my skill has been finding the diamond in the rough, diamonds in the rough. So we've had like, well, Sean and I kind of discovered one another. Uh, but then like there's Steph Smith, who's now at a16z. We had Trung, who's popular. We've had a bunch of people who went on and founded different companies. And what I've always looked for, like I purposely have looked for these diamond in the roughs because I was like, I can't afford, you know, to pay X, Y, and Z. So I got to hire this 24-year-old who I know will be a boss in like 5 or 10 years.

By the way, Sam, it's not just that you can't afford them. I remember once the hustle got to the point where you could afford them, you were just kind of disgusted by the concept of somebody making that much money. I remember you were just like, how much do you, how much does this kid over here work? This like engineer at my office. And I'd be like, I don't know, like whatever, one, one, $150, $170. You're like, what, $170? Oh my God. Like, this is, you know, if this person left, would the company fail? No, no, not at all. Well, it was crazy.

That was 10 years or that was a year ago.

Yeah.

So things have changed a little bit. But also, like, your people would show up to work at like noon and I'd be like, what the hell, man? This guy like just waltzed in and like, you're going to— and he's like, he arrived right when they're serving lunch. Uh, but, uh, we've, we've like discovered some cool people and I always look for a couple things. The first thing is actually, this is from Paul Graham. He goes, I look to hire animals, like people who like you're a little bit afraid of. And they're like, uh, just like freaks where they work a lot. I also work, look for people who are like weird. So I always want like weird people who have like fairly extreme opinions, even if I totally disagree with their opinions. I really like that someone's like well thought, well, uh, well researched and has a strong opinion on something. But I love like weirdos and eccentric people. And I have found that if you can, at our startup, at the Hustle, we did a really good job of like accepting weirdos and letting them be odd. And like, we like embraced it. And I always found that to be kind of like a, uh, a, uh, we used to say, you know, let your freak flag, uh, let your freak flag fly. And, uh, we're like, you know, I don't, I was like, we'll have, we had all types of different people. We, we had, uh, just, just every type of like person. We, worked at our company and they liked that we like embraced their odd, their kind of like them being different.

Yeah, we have something similar. So we have, you know, 5 kind of core values as part of our HubSpot culture. One of them is, is remarkability or being remarkable. And what we mean by that is there's something noteworthy they've done in their past or there's something quirky, something different, something that's an outlier about them. And it doesn't have to be specifically business or whatever even role that they're in, but there's like, they're just kind of like off the kind of main beat. And that we've done well with those kinds of people. We give them a home, kind of let them, uh, do their thing and it tends to work out. Yeah.

So Sam had weirdos and kind of like let, let your freak flag fly. You have the, um, the, uh, remarkability. Have you done something remarkable? We had one at Bebo that was the same as we, we used to say we hired degenerates. It's like intentionally a, a, a word that's usually negative, right? Like we hired degenerates. And what we said, we would always ask me and Furkan, we noticed this in each other. We were like, Dude, we've gone through these phases in our lives where we just got really obsessed with something that didn't have a clear payoff. Like, it wasn't the popular thing to be obsessed with, um, like it wasn't the like cookie-cutter good thing to be obsessed with. Like, it wasn't like grades in school. It would be like, you know, Furkan got really into, you know, um, this video game. And he was like, yeah, became like a top 100 ranked player of this game. And like, it was a total like, you know, in one hand I knew it was like a waste of time, but like I couldn't help it. I just loved it and obsessed with it. I became the best at it and I just wanted to win like so badly. And at some point I even stopped being about winning. It was just like I wanted to like get to like the next level and, and keep going. And I had, I had done the same thing with poker. He had done it with poker also. So we kind of identified these. Do you, it's like, hey, do you go through these periods of like 3 years of deep obsession around some competitive like thing? And, um, and then when you do, do you like really like try to study the game and figure out how to like What are the loopholes in the game? What are the rules of the game? You immerse yourself with other players in the game because like, well, cool. Our game now is just startups and we would try to find people who had some evidence of degeneracy. It's like, yeah, you come in at noon because you stay up till 4 in the morning, like building that, uh, SoundCloud player that works like TikTok for no reason because you're so annoyed that SoundCloud like is too slow in the way that they develop things. It's like other people would look at that as like, oh, you're not really reliable or very structured. Are you? You know, why did you work on that? That wasn't even like the task at hand. Whereas we would see that and we'd be like, oh, all we need to do is just point this guy's degeneracy at the right direction and then we'll win. And that was like our mindset.

Yeah. I think of that as a kind of borderline pathological obsession. Like that's like once you attach yourself, whatever it happens to be, right? And what our job is to kind of bring it just shy of pathological where it's like kind of harming themselves, but it's like you can't help yourself. You're going to like just dig in and whether it's video games or whatever it happens to be, people that have, I won't call it a gene, but that have that trait tend to work out well in startups because you're trying to attach yourself to a particular thing, a particular problem. The other thing I'm just, since we're on the topic of talent, I've got this little mini framework, works at multiple levels of abstraction. There are like 3 kind of vectors of kind of measurement of people. One is that you have the creatives and these are people that start things. They have ideas, they have 180-mile, you know, ideas an hour kind of thing if you sit down in a room with them. Then there are the, so they're the starters. Then you have the completers. Those are the people that can make a list of like, here are the things that need to get done in order for us to ship a product or do whatever. And often those folks are at odds, like the idea folks are kind of really frustrated with the completers that are just like, ah, I'm just trying to check a box and make our, it's like, yes, but I'm doing this thing and it's not good enough yet. But you have that tension and that's what brings in the third person, which is the collaborator. And the collaborator is really good at communicating, is really good at bridging gaps across departments, across individual people, and kind of pulling it all together. And usually you're looking for someone that has at least some, like a 9 or 10 on one of those dimensions, a 7 or an 8 on another one, and usually very low on the third, right? It's like you can have—

What are you?

Super creative. I'm on the creative side. I'm like, yeah.

For sure. Well, how have you—

Well, but how—

that doesn't make sense to me because you lead a $20 billion software company that you've been doing it for 20 years. Like, and as a CTO, she's like, how on earth do you pull that off? And it's public, it's publicly traded, which means you've got to go through all the bullshit that like is the opposite of creativity.

Yep.

How do you, how do you, how do you, well, like one thing you shared last time, you talked about those little like kind of calculators or the little like kind of growth, growth tools that you had built, which was just like, oh, I was just tinkering and I made this little like page load speed test site. And then, or whatever, I don't remember the exact examples, but you had built like 3 or 4 of those that drove like a substantial amount of traffic for HubSpot early on. And like even now with Wordplay, like, you know, you're just, you're still creating stuff even now.

That's like, we were just talking, we were just talking, he's getting ready for the earnings call. And like that to me is the opposite of creativity. You know what I mean? That's like, you're, you have so many, you have such a narrow lane that you could stay within. That's like, it seems so hard.

Yeah. So I'll say this, um, I have done everything in my, uh, in my power to reduce the time I have to spend on things that I'm not good at. Right? Which is the things that are kind of non-creative, not a part of that. So I don't have any direct reports, which is unheard of for a company that is, you know, for a founder that has, uh, 7,000 people in the company and a lot of them on the kind of product and engineering team, which presumably, um, you know, the CTO would kind of help manage and lead. I, I don't do that. Um, and so, and the only meetings I go to are where there's some creativity involved. I don't like to go to kind of status things and updates or whatever. It's like I can read an email as well as the next person. Um, So, but, but there are things that are non-delegatable that one of we should, we should probably talk about. It's on my list of things. So one is earnings calls. Another one is getting on the public stages, right? So for instance, we have an annual conference called Inbound that, you know, the last time it was in person, it had like 25,000 people in the live event, right? Like it's, it's big and I have to give the keynote every year and I've been doing it for 10+ years now, which I hate and I'm bad at. But that was one of those because I'm founder, that was one of those non-delegatable things, right? I couldn't say, oh well, we're going to have someone else go do that because, you know, in my role as founder, I have a certain kind of weight to me just by virtue of the title, um, of being a founder versus, um, someone else.

So—

Sean, listen to this. Listen to this Dharmesh story. And Dharmesh, you could fill in the blanks as we go because you could decide how much you want to reveal. But there's been a couple different times, maybe 3 different times I've introduced Dharmesh to a founder of a company who was raising money. And literally within 5 minutes he replied and said, I looked at the deck, I'm in for blank amount. He, he, you could reveal if you wanna say some of the, some of the times how much it was. But, uh, and he replied with, I'm in. Just so you know though, I've got one rule, which is I always side with the founder. Um, and I'm always on your team. But the downside of that is like, I'm gonna make close to no time. You didn't say it this way, but it is like, I'm gonna make close to no time for you. Or like, you know, like I think you said it, like, I'm totally going to be silent, a silent partner. I'm not going to bother you, which means if you want to bother me, I probably, you know, I'm not going to talk to you that much, but that's like the stipulations for taking my money. If you want to take it, great, do it. I've seen that happen 3 different times. And do you want to reveal how much it was or no?

Uh, I don't recall, but, um, I will say this. I've made roughly, I think a little over 100 investments now across my angel investment. Um, I won't call it a career, but my activities and 80 to 90%, um, I've never actually talked to the founders or ever met with them. Um, over vast majority of my deals, I make the decision within 24 hours. Um, it's like, like I don't have time to go dig into do due diligence on some industry or whatever. It's like, that's not the point. My point is not that there's only two reasons I do angel investing. Um, And it's, and none of, neither of them are to make a return. One of them is around living vicariously through other entrepreneurs. I just like, I like that process. And this is, you know, predates even starting HubSpot. And the other one, quite immodestly, is just bragging rights. Is to be able to say 5, 10, 15 years from now, it's like, because no one cares like how much you invest, whatever. It's like, oh yeah, I was in Okta back in the day. I was in Stack Overflow back in the day. I was like, you know, first money on this company, this company, this company. And that feels nice. It's, it's not such a, kind of magnanimous giving back to the community is purely like, oh, it'd be cool to be able to have been part of, you know, these great founding teams that went off and built great companies.

I really respect that you said that part because I thought you were going to say like, um, you know, to support the causes I care about.

Yeah.

I just, you know, just to foster entrepreneurship or like, you know, you know, use the D word, democratize something, something. And instead you said a true thing that I think every angel investor feels is like, it's awesome to have a notch on your belt and be like, yeah, I, I either I saw that or I backed that, I bet on that and it worked out and it's awesome. It's an awesome feeling. It is a perk of the job and it's a real one. So, uh, the fact that you said that to me shows me that you are a real one, Dharmesh.

I'm, I'm, I'm what I refer to myself as like a warm-hearted, red-blooded capitalist, right? So I have compassion. It's not like that I don't like people. I'm not a sociopath. Um, but I, I'm a capitalist. It's like, okay, well, for instance, I'm, this is gonna sound completely immodest, but we opened this door in the last episode, so might as well walk through it now, is, so last episode we talked about kind of putting a value on your time, whatever it happens to be, and that anything that falls below the line in terms of you can outsource a delegate or whatever for less than that, you don't do those things, right? You don't mow your lawn, whatever. If, um, and so I haven't, uh, I should recalibrate, but you know, my number personally, the one I use just because the math is easier is like $10,000 an hour. Like that's what I, if I were on the open market, I think I could, I could make that.

If that's what I would've thought higher, I would've thought higher. Well, what do you think?

That's the best number to use.

It's higher.

No, but I think, I think it would be like $50,000 or $100,000 an hour, maybe. Like, I mean, way higher.

One could make the case, but I can make my point without having to make that particular case.

Okay. Let me ask you a question to make it real. So you buy something, you book a plane ticket, it's like, whatever, it didn't work out, or you deserve a refund, but you'd have to go chase it down. Do you just have somebody who you're like, this is my chief of staff, my EA, that like I just say, you do it, or you're like, hey, it was $2,000, but it's below my hourly rate. I'm not going to do it. I just eat the loss and move on.

I don't do it because even delegating then requires some follow-up, requires some explanation, and they're going to apologize because they could only get half back or it was only a credit. It's like, I don't, I don't care. I just honestly don't care. Um, and so, and back to the investment thing. So let's say, you know, my, when I started, my average investment rate was, we'll call it $100,000, uh, give or take a little bit. Um, it's grown considerably since then. But if I spent like 5 hours doing due diligence or having founder meetings or whatever, I basically doubled their valuation or halved my investment amount, right? Because like, not only did I put cash in for which I'm going to get shares, but then I put another $50,000 or $100,000 worth of time in just in the due diligence, which is easy to kind of run up that bill. It makes no mathematical sense why people would do that, right? It's like, okay, um, do you really feel like you're going to— and the reason they rationalize, and this makes sense is that if you really believe that as a result of spending that time on the margin, you're going to make better investment decisions, you're going to pick better companies, you're going to do these things. And maybe for the first hour or two in an early-stage startup, there's just not that much diligence to do, right? Like, what are you going to dig into? It's like, you like the idea or you don't. You like the founders or you don't. Move on. Our software is the worst. Have you heard of HubSpot?

See, most CRMs are a cobbled-together mess.

But HubSpot is easy to adopt and actually looks gorgeous.

I think I love our new CRM.

Our software is the best.

HubSpot. Grow better.

Or the other part that's obvious but worth saying out loud just in case people are like, well, then why are you doing this podcast? Well, you also just do things you like. Those are the things that you don't do. You don't put a dollar amount on because you enjoy them and therefore it is not a cost to you. It is like a benefit to you. So So yeah, if you love gardening, then you garden. You don't put a $10,000 an hour mark on it. Is that fair for you? That's how I think about it, at least.

That is fair. And it's like, what, what I solve for is I like to solve for, it's gonna, it's a little bit of a squishy term, is just raw impact. I like scale. So if you folks were a much smaller blog, let's just say, it's like, oh, I'm gonna reach 50 people as a result of this. And I have ideas that I think are worth sharing. Um, and it was smaller. I'm like, and, and it's not like, oh, I don't get up outta bed in the morning unless there's at least, you know, 10,000 people.

It's like, if, if this was Morning Brew's podcast, then it would, we should have Amplify my time, right?

To what little time I have left on the planet, what things that I know. Um, so I'm always looking for, uh, to do things at scale. Like, how can I find a way?

Let, let, speaking of things at scale, let's talk about this thing because like on the surface, this thing that you recently did like a year ago is incredibly silly and not worth your time. But basically I think a year and a half ago, Wordle is like a game that an online game is like a word game that went viral. You built a thing called Wordplay. Is it wordplay.com? It's wordplay.com, right?

Wordplay.com, yeah.

By the way, you buy domain names. So you bought thehustle.com for us. You bought me copythat.com. Thank you for that. I forgot to say thank you in person, but, uh, uh, so you buy like a lot of amazing domains, but you have wordplay.com. And did you tweet that it was getting 7 million users a week or 3?

What was the number? Well, so the, I just went and checked with the numbers. Okay. So just to kind of place the timeline in frame. So November and December of last year, 2021 is when Wordle took off. And January is when it really kind of hit its, I think close to its peak. And that's roughly when the New York Times acquired Wordle. And a couple of things kind of bought me in. It was fine. I think it was a great outcome for Josh Wordle. But there were things that were kind of bothering me that were limitations in the game. And I was an avid player of the game. And now it's like, okay, well, the New York Times has bought it. There's no way that anything's gonna happen for like years, if ever. So that was kind of thing number one. Thing number two, like it was, it had been a while since I had launched like some simple free thing publicly. I hadn't gone through the process and there were other things I wanted to learn. It's like, oh, I wanna learn more about Vercel and Next.js and TypeScript and things like that. So I was like, okay, well this is a, Excuse, and then that intersected with the third thing, which was like the dominant variable in the equation, is my son was taking a Python programming class. He's 11, right? He's going through this process. And for him, it's still very abstract. He's learning programming, he enjoys everything involving technology and screens, but it was abstract. So on a Saturday night, I said, okay, well, let me build something. Python happens to be my language. Build something so he can see because he plays Wordle, he knows the game. Um, and so I started on a Saturday night with a deadline for Sunday that I'm going to launch something with him tomorrow. We're going to have Google Analytics on it. So we're going to launch it. I'm going to launch it by tweeting it. And so he know— he knows what social media is, right? He's, um, you know, uh, so I'm like, oh, we've got this thing that didn't exist yesterday. I wrote the code over the course of last night in Python, the language that you're learning, and we're going to launch it. And now you can see users coming in, right? You can see the And so now what I want him to have in his head is that when he, as through the course of his life, as he encounters problems that are solvable with software, which is a lot, like it's actually tactile for him. It's like, oh, I don't know, I don't have the skills right now to do what, you know, dad just did, but I know it's possible. I know it's possible because he did it in the span of 24 hours, right? So if I want to go off and build a video game, I want to go off and build some tool for my school, I want to build some social network for my friend, whatever it is, It feels like now it's more approachable for him. He's got years to go before he'll get to that level. But anyway, so those 3 things sort of came together. And so we launched it on that Sunday. This is, I think, in February or so, give or take. And since then, it's had like 45 million games have been played. 9.5 million people have come through it. Any given moment in time right now, if I were to look at the Google Analytics, it'd be 2,000, 3,000 people playing like right now.

Which, how did it get so much traffic? Where did the traffic come from?

Well, it helps that I have a social media following, right? I've got a million followers on LinkedIn. I've got 300,000 on Twitter. So there's that. Uh, there's some viral elements.

That's, that's a lot, but that's not, I wouldn't have thought that.

Yeah.

Yeah. It's not enough for that. Is it? How many users do you think got from that?

Um, in the early days, all of them.

Was it big? Was it big right off the bat? Like the first week, was it big? I know the first day, probably a bunch of people checked it out, but like, I'm sure you posted it. And that was the big surge. So what was like the first week roughly? Do you remember?

The first week was probably maybe 50 to 100,000. So it wasn't, it wasn't a lot, but it was something. Uh, but then it's like, once you kind of get into it, this is the, you know, the kind of power of iteration is that, oh, well, one of the things that I found missing in the original Wordle was that it was a single-player game. Like you played and you played once a day and that was it. Uh, so two big changes that we made in Wordplay. One was it was unlimited play. You didn't, you didn't have to play just once a day. And two, it allowed you to challenge your friends. So you could say, oh, I just played this word. I solved it in 4 turns. Here's my score. And send literally a simple link to anyone or a group on— and this happens tens of thousands of times, right? Like someone will take a link that they just played. They were really proud of their score. And then their family, they can post it to their WhatsApp group. They can post it there wherever they want and say, I invite you to beat my score kind of thing. And so that's the viral element. And so then as more people play, you can track that as you might have as a Google Analytics event. And say how many people, how many times are people clicking that share button and issuing challenges to other people? And so that, once you can kind of get into something where there's a compounding effect on the user base. So as a user base grows, and so now the thing I'm fighting though, right, is that, so that's happening, that's going well, but then the interest in Wordle and related games is waning because everything has its kind of peak and its ebb. And so, but it's been an interesting exercise. And so on the kind of learning path, one of the things I hadn't done in a while is like, okay, well what's traffic actually worth? Let's say I had to make a living on this thing or make the company quote unquote or project profitable. So I put Google AdSense on it, which is the easiest thing to do and discovered that like, if I weren't bothered by the fact that there would be 2 ads on the main game board page, if I were solving for monetization, it was like $90,000 a month, uh, in Google AdSense based on the traffic.

Yeah. Wow.

I thought you were gonna say way less. Yeah.

I thought he was gonna say like 5 grand a month, but 90 grand a month. And you're, you only have, your only costs are hosting, right?

Yeah. And my time. Right.

And first of all, Sean, go to wordplay.com and then go to like the about page. His about page is incredibly well written. It's wonderful copywriting. It's wonderful. Uh, you've got a wonderful voice. It says, uh, I'll just read the first sentence, but it says, why would you do this? Or better yet, why would I do this? That's a really good question. My wife asked me the same question. And then you like go on to explain why it just, you, you're, you're, you're quite a good writer for also being like this amazing engineer. Typically those things don't go—

I went to a car writing course that Sean put on, you know that, right? It's like, I'm not— I'm getting around here with my car.

The alumni. I like to say I taught Dharmesh everything he knows, even before he met me. I somehow taught him all that good stuff before he built HubSpot.

What, uh, what do you, so this was making $90 grand a month maybe, or about, what do you, is that—

it could, it's not, right? There's no ads here.

I turned ads off because that's sort of not the point. Uh, and people were asking me, it's like, Dharmesh, why do you have ads on this thing? I'm like, to learn. And like, it's like, I've learned what I needed to learn so I can—

Was, was tweeting and LinkedIn, posting this on LinkedIn the only way you got users? What do you think this could sell for right now? And is the, is this the biggest side project you've ever created?

Our buddy tried to buy it from— Suli tried to buy it off you.

Did he really?

He tweeted out, he's like, I'd like to buy this off you. I've, you know, I've built mobile games before, you know, he was like semi-serious at least. I don't know. I don't know if you talked to him or not, but I did not.

What do you think you could sell? What do you think, like, if you cared, what do you think you could sell it for? $2 or $3 million maybe?

I feel right now that, um, let's say the ad revenue would go down to like $50,000 or something like that because I haven't turned Google AdSense in a while. That's $600,000 a year. Apply a 5x multiple. Uh, so somewhere between $2 and $10 million would be my guess if I like, if that's what I was solving for.

So it's, and, um, is this the bit it was, was posting it on LinkedIn and Twitter the only way that you got users or did you do some other weird hacks?

I had my blog, had my, it's like I'm a big believer in like, you know, what folks call like the flywheel. There's all these little things that are attached to the flywheel, right? It's like, oh, well LinkedIn helps a little bit, puts a little energy, Twitter does a little bit. And then I have my blog and the email goes out and there's like things that I sort of do. Yeah, so it helps, but it's like the hardest part is that cold start problem. It's like, how do you get your first 100,000 people, 100 to 1,000 people? And then it's a matter of like tracking the retention rate on those users. Do they come back? The other thing that's been interesting about Wordplay as far as the lesson learned is that, you know, when it started, the average time a user spent according to Google was roughly 4 minutes on the game. Okay. In the early weeks. And now that number is at 14 minutes is the average time a user spends, you know, across however many thousands of users come in a given day. So.

Right.

What, and is this the biggest side project you've ever created?

Depends on how you measure it. So technically, no, not in terms of just like raw traffic. I've built graders and things like that before that have done better.

But what have you built that did— what side project have you built outside of HubSpot that gets more traffic than 2 or 3 million people a month?

I haven't really did side projects. This is my first one that was like clearly because it was a game. Had it been anything other than a game, I would have rationalized some way to bring it into the HubSpot umbrella because I like to have like all my eggs in that basket, but just given the circumstances here, it didn't really make sense. And even now, like I'm thinking about doing a kind of a marketing and sales related edition of Wordplay, right? It's like, oh, the entire list of words or do it based on MarTech companies. Like, okay, do you know the players in the space kind of thing? And then you can get sponsorships or whatever. Anyway, but yeah, Website Grader was the, this kind of a project where it was like a free, I'm I really like low-friction things that people can come to the website. And this is why my son and I were chatting yesterday, is we're looking at Flutter, this new development environment and language. Well, Dart's the language, but Flutter is the app framework for building mobile apps across iOS and Android and things. It's what the cool new kids are learning. And he's like, no, why would I ever want to build a mobile app? That's like something people have to download. I have to get approval from, you know, Apple to kind of post mine. Like, I want to like just do it like immediately. He's got done and he's right. It's like, okay, anyway. So that's the Wordplay story. It's been, it's been a lot of fun. I've, it's hard to know with these things like, like where the road leads, like Wordplay itself may or may not kind of connect back to other things, whatever. But the things I've learned through it, I think will. It's like, okay, well, here's what it takes to build this kind of thing. It's like, okay, well then I'm using it to play around with community. It's like, okay, can I take the Wordplay user base? What are the things they care about and build a community around Wordplay using one of the existing kind of community platforms? and, and see if that's a thing, right? It's like, okay, if you could aggregate people with like interests, um, that in of itself has value. And I want it to be something, something that kind of self-runs, but we'll see.

If you were, uh, I'm gonna ask Dharmesh, if Sam had built this as a side project and he was at the same point you're at right now, what would you like kind of advise him to do? If it was Sam's project and you were just kind of an outsider said, oh, that's really cool you did that. And it sounds like you've kind of reached this point where you don't really have a direction of where it's gonna go next. What would you kind of tell Sam?

Decide what you want to do, which is, okay, do you want to like take this to the next level and you turn it into a $100 million, billion-dollar business, you know, spin it off, or decide that it's just going to be a personal project. And just like my personal blog is, and I've made that decision. It's like, I'm not going to try and monetize and hire employees. I'm not going to do any of those things, right? It's going to be, and my son will continue to act as head of product because he's the one that tests the thing every morning. And we play tournaments every evening. That's the big new feature that's coming out. Is a multi-round tournaments. By the way, in terms of like, I think half of what I know, Sean, I learned from you. The other half I learned from, from MFM, right? It's like, so one of the things is around Chess.com, which you guys talked about, which I've been a member and player on for 10+ years. I knew of the site, but then you think about Wordplay is like, okay, well, this is Chess.com, but for word game enthusiasts versus chess enthusiasts. And then what are all these other—

As a reminder to people, Chess.com is like a huge business, like, like multi-billion dollar valuation.

We talked about this when we talked about chess also, which was what other things are like chess. And we had said Sudoku and we had said, I think we had said like a Scrabble or whatever. Uh, word is, word games are all, yeah, I think they're almost as big, if not, I think it would be, I wouldn't be shocked if it was bigger than chess. I wouldn't be shocked. I would, I would be more shocked if it was like a 10th the size as the chess enthusiast audience. Um, I would guess it's like in the range and there's very few games that are in the range. And so that alone makes it an interesting comp, um, in that sense.

So, so the lessons you draw from Chess.com, right, which is relatively straightforward, is you have like a rating system, right? You have leaderboards and scores, you have challenges, you have social connections where you make your friends on Chess.com so you can invite— like, it's all the things, right? That these are, uh, very easily translatable into other games like Wordplay, right? Um, so anyway, so we'll pick and choose.

As far as I give you one little feature I think would be cool, because, uh, leaderboards are always this problem in general where, uh, like a leaderboard's cool for the top 10 people. And then for everybody else on earth, it's like, oh great, I'm player number 3— 39,000. Fantastic. Right. Uh, and so there's all these, like, if you— I kind of studied this once, I was like, who solved this problem? And there's really 3 models that work. One is more like chess, uh, and, and games do this. They create a rank system. So it's not your number 80,000 in the world because that doesn't mean anything. But you go from bronze to silver to gold to platinum to master to grandmaster. And like, you, you just compete to get your own level up within that to get to your next badge. And that's a karate belt, the karate belt method, let's call it. Then there's the next one, which is your social, your rank matters when it's with people you know that are either your friends, your school, your city, something like that. So you could kind of hack a proximity-based thing. And then the third one, which I think is somewhat interesting, which is It doesn't even matter what my rank is, but there's something cool. Like if I go to Wordplay right now, I feel like I'm alone in this experience. I don't know that there's 3,000 other people solving this right now. And also I don't know, I bet you there's like some celebrity that plays Wordplay every day, right? Like I bet you like, I don't know, Mila Kunis plays this every day. And I think there's something really cool to like sort of like a stars, they're just like us vibe of like, if I kind of knew that, that X known people have solved it for today. That's just kind of interesting. And it's kind of like, you know, makes them more approachable. So I almost wonder if there was like a little feature like that where if you're a blue check tech person, you could kind of like auth in and be like, I either solved it or failed today. And you could just have that as a little board. Uh, anyways, those are my 3 random feature ideas for you.

That's a good idea. The one thing's, and I don't, it's not surfaced on the, on the product. This is a really good idea. But, uh, one of the things I do have is in the comment, there's a, there's commentary. So as you're playing, the software will kind of give you a little kind of sometimes snarky, sometimes fun messages, sometimes data. It's like, oh, You're one of the few people that's ever guessed this particular word. That's not a very common word to use. Congrats. Good for you. Or this is the 1,000th time you've used this particular word. You know, points for consistency. So there's this kind of running commentary, but I like the idea of like just kind of front loading is like, here's a number of people that have solved this game. I give you stats at the end of the game. It's like, oh, only 14% of the people or players solved this particular word. And it took them on average 7 point, I mean, 4.7 guesses. So yeah.

Can I throw 2 more at you? Uh, this is now my, my feature brainstorm for you. Uh, if you ever played Candy Crush—

there's nothing more—

there's nothing more than like an entrepreneur— there's nothing more than like a person who has no stake saying, hey, have you thought of— have you thought about— have you thought about this? Why haven't you done this yet?

There's nothing less entertaining on a podcast than me telling you features for wordplay, but fuck it, it's just our podcast. If you ever played Candy Crush, they do this thing which was they make— they, uh, so stakes stakes matter a lot in stories or any kind of like adventure. Um, and so like, you know, if you open up a pack of Warheads and if you see a black one, oh, that's the really crazy one. Uh, Candy Crush does this in their games where if you start a level, it says this is nightmarishly hard, or this is a, you know, medium hard or whatever. So I'd like to see that in the wordplay when I come into every day. I'd like to know if this is a nightmarishly hard puzzle or if this is just okay. It gets me amped up for my play.

That's a really good idea. And combining that with your tiering idea, and then we can, uh, move on, but So imagine we had a tiering mechanism that you can go from bronze to silver to whatever to ninja level. You know, right now when you start the game, you get a random word that— and other people get random words as well. And there's a daily word that everybody plays together. But imagine that like as you move up the rank, it gets harder. It's like now you're a level that few have achieved, let alone solved, right? It's like no one even gets here. You're here. And then you do things for streaks. It's like, okay, well, you're the first person to have solved like 50 games in a row at this tier or something like that. I think that'd be fun.

So one last one I think you'll like, which is, um, you are a fan of crypto and I think you would, if you like the crypto ethos, and I think if you could advance the cause of crypto, that would be like a win for you personally. Um, so we gave out this Milk Money grant, this like milk for the milk girl. We gave out like a bunch of money to people just to build whatever they want. And one guy, this guy Dave, he built this thing that was like a Wordle game, but it was with crypto, which was just, you play Wordle as is, but if you solve it, you could win like 1 MATIC, like a tiny amount, or like Then he was like playing with different ideas. He's like, oh, there's actually a $100 Matic jackpot for the day. And like only winners are eligible for the jackpot. You might, you might get it or you might not. And so you got a bunch of people connecting a wallet. So I think what you could do is you could actually just add that into Wordplay, which is, by the way, there's a $100 a day prize paid out in Matic or, or whatever. Um, all you gotta do is create a little wallet here and like you might win. And so I think a bunch of your avid players would create a crypto wallet where they might not otherwise. So you'll onboard new people into the world of crypto. You could create a dead simple meta— either funnel them to MetaMask or create a dead simple crypto wallet that will become like a, the play-to-earn, uh, crypto wallet, you know, for the future. Anyways, that's, I will, I will now stop talking about—

also a good idea. Yeah. By the way, I just, so I actually added the ability to connect your, um, connect your Diesel wallet and your Ethereum wallet, um, to Wordplay. Um, and my idea at the time was instead of turning ads off, I'm gonna make that the pot. And so as ad revenue accumulates until the next payout, whatever it happens to be, and then it's like, oh, the top 10 winners are gonna get this distribution and let's start over again. So not to make money, but, uh, we'll have money coming in through AdSense and then we'll kind of— Right.

A sustainable play-to-earn game. That's awesome. Yeah, that would be amazing.

Yeah. So let me, uh, Sean, this is, uh, an interesting topic, but I understand there's like laws and SEC stuff around what you can and cannot say. Dharmesh, just tell me if like you can't But basically I think it was in late May. I'm looking at now in like May 25th or something like that. Sean, I don't know if you saw this, but like there was headlines that said like Dharmesh Shah, CTO, co-founder of HubSpot, buys HubSpot shares. And I think it was like, was it $10 million? It was, it was a pretty substantial amount.

It was over $3 million. I forgot the exact amount is, but it was millions of dollars.

And then suddenly like the stock, like the next day, like went up because it was like, oh man, Dharmesh, like this insider bought it. He like like he has faith in the company. That was a pretty, that's a pretty cool move. When you're doing something like that, what is your thinking? Like, are you thinking like, like, is it part of you? Like, I just want to prove to the world that I'm brave. Is it part of you like, oh no, this is just undervalued. Like they're, they're foolish. I mean, like, what, what's your, what's your motivation there?

It's exactly what you said, which is I just thought the company was undervalued given the long-term potential. And I've done this before. I did it a couple of years ago and bought a bunch of shares. I think even more at that time, like at $125 a share, right? I'm like, okay, well, and this is when HubSpot stock had dipped over the ensuing, I mean, the prior 2 or 3 months. I'm like, I understand the market's more like it's, but this doesn't make any sense. Like, you know, HubSpot stock to me was worth more than at the time $125. Turns out I was right. And so it's a similar thing. It's like, and it does signal belief in the company, right? But it's what I believe. And there are, regulations around it. You know, people ask, look, well, why did you buy at that time? As it turns out, it was the exact window of time that I had to wait a certain period since my last transaction to when I could buy. And the day that I was eligible to buy, I bought. And it's like, oh, the price is low enough. I still have conviction that, um, over the long term—

You're also buying with money that, like, where did this $3 million come from? Let's say, isn't that just stock you previously sold that you now are buying? Or it's not like you have some other huge side—

Yes, yes, yes, yes.

Or can you, can you take a loan against your HubSpot shares to buy more?

There are like 100 things you cannot do. That's one of them. It's, uh, yeah.

Wow.

No, I think, uh, I saw that the other day and, uh, you, you've done, you've made a few decisions. Like every once in a while you do something and I'm like, oh, this guy is nutty in a cool way. And that's not exactly nutty, but it's like a pretty bold move. I, I thought it was a pretty cool move and I, and I saw that and I was wondering what, what was going through your head when you did that?

What's the psychology like when, uh, I don't know, HubSpot stocks, like, I'm just rounding, I think it's down like 40, maybe 50%, something like that from the all-time high, like during the, the last kind of the peak of the peak last year or whatever. Um, and so, you know, we come on here sometimes and I'll be like, uh, all right guys, you know, you know, Sam will be like, dude, how are you? And, uh, you lost a bunch of money today. I'm like, yeah, yeah, I lost like a million dollars today. And like, like, you know, ETH is down and I'm, I'm down $1 million. I'll share my psychology of like dealing with this, this travesty of a loss or whatever. And I'll be like, yeah, you know, here's how I think about it. You play that game at like 1,000x higher stakes where like, you know, more like you're—

he lost $500 million.

Yeah, exactly. I'm losing $500,000. You're losing $500 million or whatever. You know, something crazy like that. What's, what's your psychology like? Uh, I don't know, like like, I think you know what question I'm trying to ask, even though I don't have the words.

How does it feel to lose half a billion dollars is what you're asking me?

Yeah. And how do you deal with that? And like, yeah, go, go for it.

Is that how much you lost? Do you think?

It's more than that, but yeah, who's counting?

He's like, this podcast is more fun when we were talking about wordplay.

No, no, actually fine. Like, I'm, I'm not really, and I'm not just saying this, but, but It's true. It does not faze me like one bit because the reality is it does not change my life one iota, right? Other than like, okay, well, it impacts, you know, HubSpot employees and shareholders. I get that. But in terms of me individually, like nothing changes, right? Like I wasn't off planning to buy small islands or take over governments or something like that or buy Twitter, right? I was not, I didn't have any of those kinds of plans. And so absent those kinds of plans, like I feel sorry for the nonprofits that I would have invested in, but you know, my wife continues to invest. There's, you know, we have plans to do the philanthropy we want to do. And so it's like, okay, well, I still wake up every day then do the same things I did before. And I'll look at the wordplay things and respond to user emails or what's like and do my HubSpot stuff. It's like, okay, like what's really—

you don't even have, you don't even have the self-talk in your head where you kind of need to like, Because for me, when it happens, I'm like, uh, you know, I have an instant reaction as I go look at a chart or a price or whatever, and then I give myself a little self-talk and I'm good. Like, it lasts 17 seconds, but I do have those 17 seconds. It sounds like you don't even have those 17 seconds because you're like, well, I've already been over this before in my head at some point in my life, and I just decided it doesn't matter.

Let alone the self-talk. The self-talk is one thing, let alone like that. But, and then there's also this other thing that you and I have, Sean, which is like, it if the markets are shit for a year or two, like we will change our day-to-day actions. Like, you know, we may not buy X, Y, and Z, or like we might, you know, we're not to that point where it's like, it doesn't matter.

Major cutbacks at the Puri household right now. Major cutbacks.

Yeah.

It's like, well, well, well, well, maybe change behavior, but you don't even change.

I laid off my son.

Yeah.

They change in the other direction. Right. So as the market has dipped, um, my kind of average check size has actually gone up. I've made bigger bets and things because I think valuations are starting to adjust, um, you know, slowly. So I think there are better deals now, um, good entrepreneurs starting companies. Um, so, but overall, like, the psychology of it has just, just does not, like, have any impact. And, like, over the long term, you know, um, I didn't make this up, but, uh, is, is that the, you know, the valuation of a company, which is like the market price, um, will oscillate around the value. Right? And value is like the revenues you have, the products that you build, what are you actually doing, um, you know, for your customers. And so that, you know, if our revenues had dropped off, you know, before something, something like that had happened, that'd be a different story. But it's like, okay, well, that hasn't changed. We are the same business today, if not better, than we were 3 months ago, 6 months ago. Um, and the valuation over time will kind of self-correct. So one of the things I like about the market, um, is that I think things will kind of wash out and we'll see. Yeah.

And a lot of HubSpot's customers are kind of like, you know, medium-sized, let's say, businesses. Um, so do you like, do you spend much energy being like, okay, where is the economy going? What's going to happen to my customers, which will have some knock-on effect of like what's going to happen to our business? Do you care, spend energy there? Cause I find myself, the reason I ask, cause I find myself sometimes going down these rabbit holes of like, okay, what do I think is going to happen? Then part of me is like, well, does any of that really matter or affect me? Or, you know, Is this energy useful or is this just sort of nervous energy that I'm wasting thinking about this stuff? Do you—

and is HubSpot's customer base even— how many customers does HubSpot have? Like 130,000? Like, yeah.

And then over that. Yeah.

Yeah. And when I think when I sold, it was 100,000 or just crossed 100,000. In the grand scheme of things, one of the reasons I sold them like, well, 100,000 customers, that's like kind of a lot, but that's not that much. Uh, I was like, the the market's way bigger than 100,000 people who would want to buy this. And so is, is the— is 100,000 or 150,000, whatever it is, is that number even big enough to have the needle move significantly when the economy is shit?

Uh, on a, on a percentage basis, like, it's, um— I'll answer it this way. So I'll answer the first question, then we'll kind of move to the second one, which is, you know, do I spend time thinking about this? Do I do anything about it? And the answer is yes. Um, at HubSpot, we will try to model out, here's, here's the impact we think it could have on our business, But there's two sides to it. There's the kind of defensive side of it. It's like we want to make sure that we have enough cash in the bank to weather the storm. We don't know how long the storm's going to last, and we have models for how, you know, how long it's going to last, how deep it's going to be, those kinds of things as far as impact. But then the other part, which is to me much more exciting, which is, okay, given what we know, what can we do to capitalize on this crisis, right? This is what's happening right now. What can we do to make this net positive for HubSpot? And we had Something similar happened in 2008, but the last hotspot was much earlier. So things we did, even when the pandemic started, one of the things we did is like, oh, there's lots of uncertainty, businesses are struggling, everyone's kind of battening down the hatches. And so we said, okay, we're gonna give even more value. We're going to, for our partners, we're gonna front them the cash for the, you know, revenue we know is coming over time because cash is an issue and we had a bunch of cash in the bank. So we did things that kind of made us stronger and helped our customers and, And so we're looking for those same kinds of opportunities. It's like, okay, now that everyone's kind of looking at the P&L and looking at all their line items or whatever, is— can we benefit from this? Because HubSpot in some ways is countercyclical. It's like, okay, well, instead of buying the big incumbent and spending hundreds of thousands of dollars, maybe now people that might not have considered HubSpot a year ago would now consider it because they're more value conscious now than they were historically. Um, yeah.

So when you were starting the company, So like there's a, there, you know, if you just look at the math, there's a world where HubSpot in the next 5 or 10 or who knows how long can be worth like $100 billion, which is, you know, one of the biggest top 200 or something companies in the world. When you were starting the company, did you have a number in your head where you're like, man, I think this, I think this can make $100 million a year, or I think this might be a billion dollar company, or was it as big as, man, I think this could be worth tens of billions?

We didn't have a specific number in our head, but we had, um, I'll say comparables for lack of a better term, which is, okay, there are successful software companies that have done similar or related things, either they're in the same market or, um, in the same, um, target customer base that had achieved it. It's like, okay, well, and this is what we told to VCs in our pitch. We're like, okay, we're not, we think at the time we were just in marketing software. So here, here was, I'll give you the first 30 seconds of the pitch is that in the history of software, No one has ever really built a $10+ billion household name, global brand marketing software company. Had never been done. Omniture was the greatest one at the time with a $1.5 billion, um, you know, price tag at the time. And we're like, and the reason people, you know, companies have not been built, uh, in the marketing tech space is because marketing is an arts and crafty kind of discipline. It's about the shade of your logo and you're outsourcing a bunch of creative stuff or whatever, but it's not the kind of problem software solves. And our belief was that marketing was increasingly turning into the kind of thing software does solve. Lots of data coming in, you're trying to make decisions around all this stuff. It looks exactly like an industry that software can help with. And so our thesis was that someday someone will build a $100, $200, $500 billion software company that's doing the thing we're trying to do. And we said, it might as well be us. We're relatively nice people and we're, uh, and we're kind of committed to this and seeing it through. So, you know, do we think the odds were relatively high that we would pull it off? No, but did we think there was an opportunity to do the kind of thing that you're talking about? Yeah, others have done it. We were not putting someone on Mars, right? That was not— it's like, okay, well, people have done this before and it's just a different time. And maybe now the time is right for a new company to do something that has been done, but better. This goes a little bit to your Pixar kind of vision, Sean. It's like, okay, well, you know, people sometimes give us like, okay, well, you know, what are you gonna do that's different? And why is this, you know, what does the world need more? The answer is the world does need more Pixars. And so, you know, saying to you like, oh, you don't really need to do that. It's like telling Elon Musk, does the world really need another car company? And like, they kind of downplay the fact that it's like, yeah, it's got 4 wheels and it gets you from point A to point B, but it's all like, there's just one interesting element about it that makes it completely different. Right. It's like, it's the same thing. Like most ideas that have been super successful are not complete new from whole cloth cut. Right. They're like, and I don't like the cliché of building on the shoulders of giants, but it's like. Like just about everything that's ever been done is derivative to some degree. It's just based on your level of abstraction, how many steps back you're willing to go. So it's like, okay, yeah, I can see someone building something massive here. It's like, I'll get off my rant. It's like, so we had Facebook, did awesomely well. Then Twitter comes along and people said, oh, well that's just Facebook where you have shorter messages or something like that. It's like Facebook with constraints. With less, yeah. And then Instagram That's like Facebook without all the other cool things that I like as well, right? No Messenger, none of that stuff. And then TikTok comes along. It's like, well, that's just kind of videos that you can do on Facebook, you can do on Instagram, you can do on Twitter, but it's this. It's like just different enough in a compelling enough way where, and it's still a video, social net, social-based video app and, you know, lit the world on fire, right? It's like, so even something as old as video or as photos, it's still not over. It's just not over. It's just part of the kind of the human condition right now. Anyway, it's, uh, I'm with you, uh, Sean. If you go off and want to do another Pixar, and if you're ever looking for an investor that will make a decision 24 hours, I'm your guy.

What was that tweet about, Sean? That was out of left field. What do you— what are you saying?

Uh, okay, so all my tweets are out of left field, so that's just Twitter. That's what Twitter's supposed to be, right? Just a bunch of left field shit that all gets put in a feed. I was watching— I don't know what I was watching. I think my nieces were over and they were watching Toy Story and I was like, Toy Story is amazing. Pixar is amazing. And I was like, why is it like— I was like, I want to do something amazing. This is literally how my brain works. It's like, oh, that looks so awesome. That's like an awesome end output. I would be so proud if I had made something like that. I bet I could, right? Like, it's this combination of like seeing something that is really appealing and then having the delusional belief that like, of course I could do it if I just tried. And so I just thought it to myself. I was like, you know, that would be a fun company to build if you could just make great stories, great movies, um, and put them out there into the world. Like, that would be so fun as a thing if that's like the thing you did. And like, I— hundreds of millions of people not just like use your product. There's one thing to use your product, it's nothing to like love it, grow up on it, and have like, you know, like this extreme like nostalgic emotion around, around like these movies, right? Like if I see, you know, for everybody it's a little bit different, but for me it's like, I don't know, Home Alone and Mighty Ducks and then, you know, Lion King. There's like a couple of movies that just like, uh, they meant a lot at the time and they still mean a lot even though I don't interact with them.

Um, so I have, otherwise I'm going to forget. There's one thing, uh, I need to say on, on this particular episode because otherwise it'll, uh, keep me up at night. So I have like a handful of like frameworks and things I think about the way I think about the world. And this ties back to Sean's next trillion-dollar company thing, uh, Pixar, which I think it can be, by the way, Sean, just so you know. Okay, so imagine— let's take a step back. I'm on a whiteboard, and the whiteboard, it's the universe of all possible people, everyone on the planet. And you draw a circle with one of your skills. So in Sean's case, let's say we put copywriting as one of the skills that he's in the top 1% or top 5%, whatever number you want to associate with it. And so that's the circle. It's like, okay, X number of people are at Sean's level, um, or better, and at copywriting. Awesome. Let's say we draw another circle that's, um, we'll call it crypto knowledge is just how crypto works. And that's a group of people. Awesome. Um, rarer skill because it's newer. There's fewer people that know how to do that versus copywriting. We can accept that will be a smaller circle. Uh, what happens though is if you intersect those two circles and turn into a Venn diagram, the number of people that know copywriting really well and also know crypto really well is 100 times smaller than either of those circles combined, right? And this is, we see the same effect like in standardized tests. If you took the SAT or the GRE or the GMAT, there are people that are really good at English portion of the test. There are people that are really good at math portion of the test, but the ones that score really, really well are the ones that are good at both. They don't have to be the best at both because that's the thing that's actually rare is the combination of the English and the quant. Same thing here. So now imagine, so this is what I call like the trillion-dollar Venn diagram of success, right? Uh, I just made that up, but so you draw both circles of your skills. And say, okay, well, I am now not like 1 in a million, I'm 1 in a billion, right? Or 1 in 5 billion, whatever that is. And if you can convert that into some kind of monetizable business thing or whatever, that's when magic sort of happens. So, so that's kind of thing number 1 is like, what's your thing? What are your skills? And what drives the value? How much value will that intersection create? It's 2 things. One is how rare is that intersection, whether it's 2 circles or 3 circles or whatever, how rare is it? And then the other one is how, how much does it kind of reinforce the other skills that you already have? So for instance, I'm a software developer. That's one of my, that's my core skill. I've been programming for like 30 years now. That's my thing deep down inside my core. If I combine that with, I'm gonna go off and, which I could never do, become an Olympic level swimmer, let's say, like also very rare. The intersection of that is like, okay, well the opportunity that that reveals because the two things are so unrelated. It's like, I don't know how I would take my ability to build a web app and intersected with my, like, yeah, there's some things I could do, but I don't know if that would be that huge. But software development is applicable to lots of, if I was gonna be an academic researcher, if I was gonna go into music, if I was like other things, there's a lot more overlap to the degree that it's like those two, they reinforce each other. So software helps me do this and that helps me do this. And this is one of the reasons, so my advice here was as you're picking skills to acquire, acquire skills that are both rare, but also reinforce things that you're already exceptional at, that will kind of drive that kind of that rarity. And that's what drives, drives the overall value, which kind of brings me to, it's like, and so when I think of things that I want to learn, it's like, okay, well this is why I got into copywriting. It's like, if I can, and copywriting is another form of, this is communicating at scale is what copywriting is, right? Like it's in usually textual form. It's like, okay, well I don't know that many software engineers that can copywrite really well. Like, like literally like other than that have not started companies, right? It's like, I, they don't exist. But, Very rarely do you get like really, really good engineers that went off and read 6 books on copywriting and took Sean's class. That's not a common occurrence.

You weren't a good writer before you got into this?

No.

No.

I mean, your writing is great. And by the way, Sean, let's, what's, we gotta pimp it out. Maven.com/powerwriting or just go to Maven.com and you see it.

Yeah. Yeah.

Just go Maven.com, M-A-V-E-N.com. I'm on the homepage. Starts in 2 weeks. All right. So the, the, uh, what you said is great. I would add one more circle to that.

Let's get to your Pixar thing, by the way. The reason you might pull it off is because you have a very weird and unique and related level of skill. So yes, there are people that are better, maybe better creatives, better animators, better entertain, whatever, but they don't know crypto. And maybe that's the thing that unlocks the next trillion dollar company is entertainment intersected with crypto. It's the Netflix for the blockchain, whatever it is, right? Something like that where two things combined that never had been put together in that way before. Um, right.

The, the, the other circle that I would add that I think people underestimate it. So I tweeted this out, right? So people, I didn't even explain what the tweet is. The tweet was, I said, the next company I build is gonna be like a new, new age Pixar, uh, like the, like the next Pixar. And, um, I think I, I think I would work on that project for 30 plus, like 30, 30 plus years. I'd, I'd just keep going with that company. I wouldn't be trying to sell it or flip it or get out of it or whatever. Um, so that was the tweet. And then a bunch of me, I basically had two reactions. One reaction was, Awesome, like, where can I sign up? How do I work for this company? That's— that sounds awesome. I love Pixar. You could do it. And those are like fans of MFM type of thing, or people who themselves had been thinking, God, that would be awesome to create another like Pixar type of company, you know, because I love Pixar. Then there's the other half of people that were like, what makes you think you could do this? Um, you know, like, you know how hard it is to make a movie? You know how expensive it is? You know how, how unique, you know, Steve Jobs and, you know, whatever, uh Lasseter and Catmull, like how rare those talents were when they came together. That's a once in a generation company. And then other people were like, uh, one guy had this amazing burn. He was like, uh, check, uh, acquihire, like a green check mark, acquihired, power writing course, podcast, next Pixar. And I was like, oh nice, that's, that's pretty solid actually. Um, and so, you know, a bunch of people were sort of all in the same bucket of like, this is so hard, this won't work. What? You, you can't do it. That's some version of that. And so the third circle, where one is like, I'm really great at X, I'm really great at Y. The third is just, I have the courage to go do a thing. And like, um, Tim Ferriss once told this story. He goes, I went to a, a business school class, a Harvard Business School class. I gave this talk. At the end of the talk I go, oh, by the way guys, I'm doing this challenge, um, uh, only for you guys, you know, whatever. I want to get in touch with either Bill Clinton, Jennifer Lopez, or, you know, some sports person, you know, Michael Jordan or whatever. Um, if anybody here can connect me over email with them, like, you know, just reach out to them, and if you get a hold of them, connect me over email. I will buy you two round-the-world plane tickets, um, you know, for— you could fly business class for a year, uh, around the world anywhere on my dime. All right guys, thank you very much. And he told that to one class. And he's like, you know, you have 30 days to complete this challenge. And then I think I forgot what it was. It was like he did it to two classes, but he gave a slightly different message in each. The first one, he just said that. 30 days go by, nobody did it. So nobody completed the challenge. He's like, oh, what happened? You know, turns out nobody even tried the challenge. The perceived difficulty was so high that nobody did it. So in the next one, He told that story, and I think he added a twist, which was whoever gets the closest to it wins. And all of a sudden, like, everybody tries. And in fact, I think somebody did get in touch and actually successfully completed the challenge. And he was like, he had this principle which was sort of like, you know, everybody wants to fish where everybody else is fishing because they think it's so easy to catch fish there. He's like, in actuality, often it's easy to just go, go catch a fish where the fish actually are, and you You don't have to base it on how, how many people, how many other people you think have tried something or how you, what the perceived difficulty is. And in fact, sometimes the bigger you go, the easier something can be because nobody else is even trying to do it. And so I would say like, you know, this Pixar thing, who knows if I'm going to go do this or something else. I tweet things just almost to my prototype. It's like, let me say this out loud. Let me see how that feels. If I sleep and to wake up tomorrow, do I want to tweet 5 more ideas about that? Or Am I over it? It was just a passing fleeting moment. Um, but, but the, the core ingredient I think most people lack is courage to actually go and do the thing. And I think that's the, the, the people put way more emphasis on what skill am I top 1% in? They kind of, they, they undercredit themselves. One, one skill you could just have for free. You just gotta go. It's like at the Sam, the, the, the deli at the gro— at the grocery store, go pull the number is, yeah, I, I have the courage to actually go do it. Like, you know, I'm, I will go do, pull the trigger on this thing and not wait for other people to kind of like reinforce that it's a good idea to me.

Yeah. And this is, and I could not agree more. Um, and so, and I think people conflate sometimes skill versus talent and they believe they don't have the talent for entrepreneurship or for design, for programming, whatever it is. Uh, in my mind, uh, so skill is something that's learnable. That's an easy definition. Uh, talent is the rate at which you could acquire a particular skill. So if you have a talent for music, that means you will acquire musical skills faster than someone that doesn't have a talent for music. It doesn't mean that someone that doesn't have a talent for music can't learn it. So they may have a ceiling as far as how far they can go. Fine. I get that. But this doesn't mean they can't do it. And so one of the big lessons kind of in my, in my life, in my professional career is that most things are actually skills, not talent. Mostly like, it's like you can start with zero. Like I was, I would've been voted least likely to ever start a company in my entire like generations of family. Right? Like that's not, talent I ever had, like, until I went off and did it. Like, public speaking was not something— it's like, oh, that, that's a skill. And you— and then, um, there's this thing from software engineering. I think it's worth sharing. I think some of the best ideas are when you take stuff from other industries and pull them into this thing and apply it here in a weird way. But in software engineering, there's this thing called functional decomposition, which is take a problem, be able to articulate well— so a function that has a set of inputs and an output and what it's supposed to do. And really all software problems are being able to take— the highest order function is, uh, let's say you want to, um, grade a possible, uh, investment based only on the website. It's like, oh, I'm gonna give you a domain and you're gonna give me a score from 0 to 100 as to how good this is. Okay, well, that function is easy to define. It's like domain goes in, score from 0 to 100 comes out. What other functions does that function need in order to pull that off? It's like, okay, I want a function that looks at the domain and looks at the level of SEO they have. That's one layer down. The person that's writing the SEO function goes down levels. Like, I'm gonna look at the on-page SEO and see how good they're doing at meta tags and H1 titles. And I'm gonna look at the off-page SEO and their link acquisition and that kind of stuff. That's, it's like, so if you roll it all down and you go down far enough, individual functions at the atomic level are so simple as to be trivial. What matters is the fact that you were able to abstract it down to that simple thing, right? And so most things, uh, can be broken down that way. So, So if you look at, oh, I want to become someone that can give a talk in front of 25,000 people on a stage, that seems like an insurmountable task for someone like me that's never done that. And that's not my thing. It's like, oh, well, what does that involve? Number one, you have to have kind of overcome— I didn't have like stage fright. I had severe stage anxiety, right? Stage fright is like, oh, there's a ship that's going to come down from space and just suck you up because you were so bad. And stage anxiety is like, man, I wish a spaceship would come down and suck me off the stage right now. I want to get off. So there's that, like, don't, you know, don't pass out on stage. And then there's the, oh, you learn about storytelling, you learn about writing, you learn about slide design, you learn about humor. And I did all those things, right? Read books, took classes on all those components of public speaking. And aggregate, I'm okay now, right? Like, I can do that. And you, then again, then it's practice and you do it over time. So anyway, My point here is startups, whatever skill in startups are a skill, figure out what set of skills you need to acquire. Some you'll be good at acquiring because you have the talent. The other one, you're just going to have to grind it out more than others may, but it's doable. It's a doable thing.

One question that I have.

If I can do it, anyone can do it. That's my point.

I love that framework. So Sean, Sean kind of added this thing to your, to your Venn diagram of like just people brave enough to get started. And would you add another thing? Like when, with The Hustle, we sold in year 4 or 5 and I'm, I don't regret it. I'm very happy with that, but I actually, like, we look, I looked at the numbers this year and I was like, oh wow, we would have made like maybe like it's, it was close to the point where like you could have potentially next year made more revenue that year than all the revenues, uh, combined. Um, and I'm like, whoa, that's kind of crazy. Like I, again, I'm happy with it, but But like real value, like I guess for me I was like real value was created in year like 5, 6, 7, 8. Of course you probably could say like when you're in year 5, 6, 7, 8, you're like, whoa, wow, it's really created in 10, 11, 12. But, um, yeah. Do you think that, um, what portion of HubSpot and your success has been, well, I'm just really, I'm just willing to shut up and focus on this for 20 years as opposed to, uh, you actually being amazing or good at product and marketing and things like that.

Yeah, here's how I think about it. I think the outcome is a combination of dreaming really big and iterating really small and having tight feedback loops. So the dream really big is you have to have something that can someday translate. And it doesn't have to be as clear a vision as Sean has laid out as far as, oh, it's going to be Pixar for the new generation. But you have to start with something roughly big in mind, at least at some level. But then it really comes down to the, the iteration, right? It's, I think the, and others have demonstrated this through data, is that the quality of the output is almost, I won't say always, but frequently a function of the number of iterations, not the quality of the, you know, the people's, for instance. So one of the common examples that's thrown out is, and I've heard it with a pottery class or a photography class, but it's like, oh, one set of students divide its class in half. Let's say it's a photography class. One set of students is like, okay, every day you have to submit submit a photo for the next 30 days while this class is running. The other one is like, at the end of the 30 days, you're gonna submit your best photo, and then your grade is gonna be based on the quality of that best photo. The first class is like, as long as you submit a photo every day, you're gonna get an A at the end of the 30 days. The other one is like, as long as you're— is A quality material, that photo is going to win. And what's been proven out across disciplines is that the class that did the multiple iterations had a better output than the one that was trying to solve for quality. Like, the arguably the first one's like, oh, all I really had to do was like submit a photo. It didn't have to be like world-class quality. It's not the best I could do, but just by virtue of doing it, they're gonna make it better and make it better. At the end of the 30 days, they produced a better photo and they produced a better clay pot. It was a pottery class, uh, than the other one that was solving for quality. And they were like too much in their heads trying to say, oh, I'm gonna do the best I can do. Like, no, just do it repeatedly. Uh, but the key to that, it has to be meaningful iteration. If you're just iterating and doing the same thing, you're not learning anything. There's no feedback loop. Then the iterations have no value. But if you're, if you have a tight feedback loop, like I'm gonna do this thing and I immediately get response back that tells me whether I got better or got worse, that is amazingly like powerful to be able to do that and compound it over time. So, so I think my, I'm not that special, candidly. It's like I'm willing to grind it out more than people that are smarter and I'm a little bit smarter than people that are willing to work, grind it out. That's my Venn diagram.

That's awesome. But, uh, have you, you've probably seen this or maybe you guys have done this, but there's this group of like consultants that created this thing called the Marshmallow Challenge, which they go to a company and they give you like a bunch of, um, sticks, uh, one marshmallow, some tape and like a string or something like that. Have you seen this, Dharmesh?

I think I have. Yeah.

But I'll kind of summarize for those who haven't.

Yeah.

Those who haven't, basically they give, they give you this, these set of, um, tools. And they say, okay, your goal— the game is you need to get a marshmallow. The winning team is going to have a marshmallow like as high above this table as you can. So build your tower as high as you can. If you can, whoever gets the highest marshmallow, whoever's tower has the highest marshmallow at the end wins. Well, right, we're going to stop the clock after 30 minutes. We're going to say hands up. And you know, your marshmallow, whoever's marshmallow standing the highest wins. Okay, good, good. So they go and they do this test with like a bunch of different types of people. They do it with consultants, they do it with like like kind of doctors, and they do it with, um, you know, engineers. They do it with, um, whoever— creatives, like ad agency types. And they're trying to see, okay, which group is going to perform the best at a challenge like this. And basically across the board, what they found is that they suspected maybe engineers are going to do the best, and the engineers do on average do a little bit better than, than others, but not by much. They actually are all pretty horrible at it. And I think like, you know, whatever, 80-90% of the groups at the end of the challenge, their marshmallow is on the ground. It is fallen over It never even, you know, got up at all. Like, if you had just put it— if you're just taking, like, you know, 2 sticks and put up 1 marshmallow on top, you would have won the challenge. And the reason why is— and they did this test with kids, and kids actually are phenomenal at this. Kids on average will beat the adults at this game. And why is that? Well, because what happened is that they would give the project to the adults, and the adults would spend the first 5 minutes, like, delegating roles. Like, okay, you're gonna be the person who does the planning, you're gonna be the one who you work on the sticks and the bottom structure. We're going to do this over here. Then they would just like kind of draw out like, okay, let's do a teepee. No, let's do a ladder. Let's do this cube shape or whatever. And they would do all this. And at the very end, they would try to stick the marshmallow on. And what they don't realize is the marshmallow is a lot heavier than it looks, and it will outweigh the sticks and it'll all fall over. And because they're doing that thing where they wait till the very end to like ship the final good product, They don't even realize where the flaw in their plan until like it's too late, essentially. Whereas what kids will do is kids will immediately grab the thing, they'll stick the marshmallow on, and it's like, if the kids don't eat the marshmallow, the marshmallow will like get into the structure very quickly and they'll see, oh, it falls over. Okay, it falls over. That means we need to iterate and we need to do things differently than we would've otherwise assumed. And that like one lesson I've done at pretty much every company I've ever started, because it's the only way I can get engineers and designers who by nature are often like sort of like perfectionist or quality. And like they in their associate, they in their mind associate the longer we work at this, the better the quality will be before we ship it. And I'm always like, dude, let's ship it today. Let's see how bad it sucks. And then let's remove some suck from it. And like tomorrow it'll suck a little less and then tomorrow it'll suck a little less again. And the best way I've been able to drive this point home is to give them the marshmallow challenge and not just like watch the video, watch the TED Talk. It's like, No, go fail at this so that you taste defeat and then you will actually learn this lesson.

Dude, that's like the greatest CEO thing that you've ever done. That's a good one. That's a really good one is to make people do this and then make them watch the TED Talk. That's like, that's a really good leadership tactic. I'm 100% going to steal that one day. Yeah.

It's, it's, it's an awesome one. Um, all right. I know we, we went kind of long. I don't know if we were good to keep going or not, but—

Ben's telling me, uh, wrap up, but, uh, But, uh, Dharmesh, this is awesome, man. I love having you around. Are you, uh, you, um, the last time you were on was like a year ago, I think. And I've been like, yeah, I've been like begging you. I'm like, man, just come on. And so we messaged him today and he goes, I'll just come on today. And I was like, all right, cool. Are you, uh, I actually, I have a quick question. What, you know, people ask me about selling to HubSpot and they're like, has it been good? From a creative perspective, it's been awesome. You guys haven't, like, we haven't been told a thing on like what we can and cannot do. Of course, I don't think we do anything where anyone would ever tell us you can't do that.

But, uh, maybe, Darmesh, do you ever get complaints about anything we say or do?

That's what I was going to ask. That's what I was going to ask. Is there anything that like, so far, I guess there's nothing that's crossed the line because we've not heard a thing. But like, it's been crazy how productive this relationship has been. I did not think that. Because, you know, people say one thing and the reality is different, but it's not been that way. That's been pretty cool.

Yeah. Thank you. I'm glad, glad that's working out in your teams. You folks have been kind of great for HubSpot. And I know this keeps you up at night in terms of valuation. I've thought about that a lot. Probably not as much as you have, but at the time I would not— beat yourself up over it. I think it was a fair deal. I don't know that. And even at that, just so you know, even at that price, and nothing to do with you, but like it was a board-level discussion. We had to just like, okay, do we really want to, you know, not that it wasn't worth that, but was it worth that to us at the time? Because it was a relatively new, new thing that we were doing. But, um, I think there's a—

for both sides, but yeah, for sure. I think there's a world. I think there's a world where in 1 to 3 years the podcast alone is worth more than the deal.

Yes, I definitely see that. Yes. Um, yeah. But in the same way, to kind of, well, and we can kind of wrap on this, is that when we were talking early in the beginning of the episode around kind of compensation as being just one of the kind of dimensions of value in an acquisition, the kind of the valuation that you get, the price tag is just one dimension of value. Then the rest of it is how happy are you? How happy is the team? Did you meet people that will kind of, you will enjoy working with in your future years? Are there your future co-founders? That kind of thing. It's like, we know that this is not forever. We know that going in with, even with people we hire. but especially with M&A. But, yeah, but hopefully the, in aggregate, you know, HubSpot delivers a bunch of value. That's my pitch for why it's okay to join HubSpot if you're ever out there looking.

But no, it was awesome. Well, thank you. This is awesome. Sean, what do you think?

Yeah, great episode. And I'm glad you used our line against us. I, he'd emailed us something. I was like, oh, you should come back on sometime, which is like the sometime is like one of the most dangerous words in the English language. Yeah. Because it's like, you think it's soon, and in reality it's never. Um, and you pulled a great move, which was what we talked about, which is like, forget scheduling stuff. Like, either I want to do it, and if I, if I can do it right now, let's do it right now. And if not, like, then let's not schedule it for the future because just because we didn't want to do it right now. And you were like, how about today? And we were like, all right, let's do it. Let's do it.

Perfect. And I intentionally made it, um, like open. It's like, okay, I knew when my last meeting was. It's like, anytime after this. So it's not even like, oh, like, I could have made it work this afternoon, but I was only available for the small window. It's like, no, anytime between 2 PM and midnight. If you had said, if you had come back, I would have been, let's do it. It's, uh, yeah, that's awesome.

It's awesome. Well, it's a lot of fun doing this.

It's a lot of fun. Thank you for coming on.

All right, thanks for having me.

Yeah.