The Knowledge Project with Shane Parrish - Brian Halligan: Building HubSpot into a Multi-Billion Dollar Company

Episode Date: August 6, 2024

From Cambridge startup to NYSE heavyweight, HubSpot co-founder Brian Halligan reveals the sophisticated frameworks behind scaling a $30B enterprise. Now a Sequoia Capital Senior Advisor, Halligan shares rare insights into the nuanced decisions that separate exceptional companies from merely successful ones. Learn the strategic principles of modern company building, including the counterintuitive culture choices, talent algorithms, and leadership pivots that defined HubSpot's trajectory. A masterclass in scaling excellence from startup to global enterprise. Timestamps: (00:00) Intro (02:36) Halligan's life-changing snowmobile accident (09:38) Shane's life-changing medical mystery (14:38) The different phases a CEO goes through while growing companies (20:44) Lessons learned from Steve Jobs (23:18) How to hire and fire people (and when) (27:55) The problems with "Best Practices" in business (31:11) The most underrated public CEOs (and why Jerry Garcia from The Grateful Dead is on this list) (43:38) The history and future of inbound marketing (51:08) On decision making (55:18) On work-life balance (58:28) On success Newsletter The Brain Food newsletter delivers actionable insights and thoughtful ideas every Sunday. It takes 5 minutes to read, and it’s completely free. Learn more and sign up at https://fs.blog/newsletter/ Upgrade If you want to hear my thoughts and reflections at the end of the episode, join our membership: ⁠⁠⁠⁠⁠⁠⁠https://fs.blog/membership/⁠⁠ and get your own private feed. Follow Me: Instagram: https://www.instagram.com/farnamstreet Linkedin: https://www.linkedin.com/in/shane-parrish-050a2183/ Learn more about your ad choices. Visit megaphone.fm/adchoices

If I put 10 calories and try to improve the feature, I get like a thousand out. And so I'm more paid attention to the features and tried to get better at the features. And this took me a while to figure this out. And over time, just tried to hire people around my weaknesses. And I have plenty of them. I really looked at hiring the best I could in the areas where I was weak rather than trying to become an expert at it. And I'll give you one area.

And for years, I was convinced that was a great product designer. I'm not. I just don't have that genetic code. that's actually quite bad at it. It took a while before that feedback sort of hit me between the eyes. We started hiring people really good at it and enabling me to let go of it. Welcome to the Knowledge Project. I'm your host, Shane Parrish.

In a world where knowledge is power, this podcast is your toolkit for mastering the best of what other people have already figured out. If you're listening to this, it means you're not. a supporting member. Members get early access to episodes, my personal reflections at the end of episodes, which a lot of people say is quickly becoming their favorite part, no ads, exclusive content, hand-edited transcripts, and so much more. Check out the link in the show notes for more information. My guest today is Brian Halligan. Brian reshaped the way that we think about marketing, sales, and customer service. With his co-founding of HubSpot in 2006, he pioneered the concept of inbound

marketing, emphasizing the importance of creating valuable content to attract customers naturally. Under his leadership, HubSpot has grown from a startup to a publicly traded company and a global leader in the industry, empowering millions of businesses to grow better. I first met Brian at a Sequoia conference where we both spoke. In the conversation, we talk about the phases of a CEO from startup to IPO and how the skills change, why interviews are a terrible predictor of on-the-job success and what you can do about it, why hiring panels are flawed, what changed after his near-death experience, why Jerry Garcia from the Grateful Dead is one of the most underrated CEOs and what you can learn from him, why consensus is the enemy of scale,

why you need to have winners and losers, what he learned from Steve Jobs and, of course, the future of inbound marketing. It's time to listen and learn. Brian, I want to start with the role of a CEO and the journey from startup to scale up to public company. It's a remarkable journey, and I was on that journey for about 17 years. And a couple of years ago, I stepped out of that journey, Shane, in a relatively dramatic way. And you may have heard this story before. I was snowmobiling up in Vermont. I was taking a snowmobile from Ridgewater, Vermont to Woodstock, Vermont, coming to the hairy part of the trail and went up over a lip and went down on the other side and just completely lost

gravity, went straight down off a cliff and smashed at the bottom. The snowmobile was in about a million little pieces. I was passed out for a lot of time. And then I woke up. It was about 4 in the afternoon. It was quite cold and nobody knew where I was. Confident I was going to die. And I sat there for a good hour thinking about, you know, if I do make it through, then what?

And I never bring my phone when I saw a bill because of Vermont, there's no signal. The whole darn state, there's no signal. But an hour in, I'm like, maybe I'm out of it. It turns out of it. It turns out of it, like a moron. And I checked it and dialed 911. Shane, have you ever dialed 911? I have, yeah.

It's an amazing service. If that was a startup, I would be thrilled to invest in it. It's amazing. The woman was sort of very, very good. And she said, I remember she said, sit tight. And mind you, I have, I'm a mess. many, many, many, broken bones. And so it's like, I kind of chucked with, yeah, I'm not going anywhere.

And then she called those two local fire stations and they're volunteer and there's no one there. And so then she has to track down the mobile phone numbers of all the firefighters and the rescue people, calls them at home. They hop in their snowmobiles and they come and find me. And by the time they found me, you know, it's pitchback. It's really cold out. And basically they went to work on me and kind of put Humpty Dumpty, kind of back.

together on the side of the mountain towed me to a flat area which is a few miles away helicoptered me to Dartmouth University and there they really put pumpy dumpy back together over lots of surgeries a lot of time and uh i remember that because that was the end of my CEO journey i had been quietly saying to myself that i didn't love being CEO upspot frustrated with just the core work and I remember saying to myself at the bottom of that cliff I make it out I'm not coming back and so I was out of work a terrific woman took over for me it's kind of a funny story about that while I was gone

and as I got back on my feet everyone just assumed I was coming back I'm like no no no I'm not coming back you're doing a great job you got this and I actually think a lot of CEOs would be a lot happier they did something similar like that Not some of your part. I assumed, yeah. What went through your head when you sort of couldn't move, you're stuck in the snow, and you couldn't contact anybody?

Like, what are the thoughts that were going through your mind? I'm not super comfortable telling everyone all my thoughts on this, but a lot of thoughts around, if I make it out of this somehow, someone finds me randomly, what's going to change? But then, I mean, the net net of all of them is, life can be very short very short you never know what will happen and don't waste it don't waste time doing something that doesn't make sense for you you know refactor your life and I refactored my personal life and I refactor my professional life pretty dramatically and these days I really

don't do anything I want to do and I wanted to do this podcast a really good podcast Thank you. Tell me about what the changes were. Like, were they all at once? Were they slow? Be specific about sort of, I always wonder this, because I had a near death experience, too, a couple years ago. And I remember pondering life and thinking about, oh, man, if this is the end, like, did I spend the time the way that I wanted to? And if it's not the end, like, what is it that I really want to change in life? And what is it that I really want to change in life? And what is it? And what is it? impact will that have? And I've done such a better job of sort of taking care of my body and my mind and sort of self-care, if you will, just as a big word to encapsulate that. I changed a lot of relationships in my life. I sort of invested in some and then I wouldn't say broke off some, but definitely stopped investing in some. And so I'd love to hear about the specific things that you did that you sort of were like, okay, well, this is the realization. It's exactly like that. When I see re-factor relationships. I tripled down on family relationships. I wouldn't say

ended relationships, but I, certain people that didn't give me energy in certain ways and just stopped engaging with. And it's a much smaller group I engage with these days. Professionally, I stopped my main job. I mean, I founded HubSpot 17 years earlier. It was kind of my life and everything was sort of wrapped up in it. And now I'm chairperson, so I'm still involved. But not in the day to day. I got obsessed with maybe similar to you with longevity. I'm like, well, if I'm going to live to 8590, I want to be very strong living to 8590. So basically anything Peter Attia or Andrew Huberman said to do, I did, except they drink a little. But I basically do everything they do. Lost a lot of wheat. Got much better shape. And so lots and lots and lots

changes. But I think the macro one was just love your family, tell your mom you love her, hug your kids at one more time today, and don't waste time, you know, do things that really are rewarding to you. One of the big things for me is like just being home for the kids every day after school. I just made a commitment. I was like, I'm going to be here every day when they get home. I'm not going to push it at the office a little longer. I'll find other ways to do that because I'm also sort of balancing ambition and all this other stuff. But it wasn't going to come at the expense of the time with them that I know inevitably I'll look back on and be like, man, I just wish for, you know, a little bit more cookies and milk.

And they say the dying wish of every man if they just want another day. And they think about that a lot, like, what am I going to wish I had not be in my life? So, Sheen, while we're on this, why don't you tell us what happened to you? I didn't know for a long time what was happening to me. I just had symptoms and they kept getting worse and worse and worse. And so, like, I had a fever, then I had an earache, and this was during COVID, so everybody thought it was COVID. So I went to the doctor, and they were like, oh, you don't have an ear infection, you're following, you don't have COVID, go home, suck it up. And then I woke up on a Saturday, and I remember just making a latte, and then I was drinking it, and it spilled down my chest.

Okay. And I was like, what the heck? I've been drinking out of cups, and so it's like, too, you know, rarely do I spill? something and I went to the bathroom and I looked in the mirror and the left side of my face was 100% paralyzed. And so I had no movement whatsoever. I felt like I was moving things. But like if I raise my eyebrows, like you can see now on YouTube, if I raise my eyebrows, it was actually kind of beautiful in hindsight. It was freaky when it was happening because this and it just didn't move. And I was like, oh God, like I got to go to the doctor. My first thought was actually not to go to the hospital, which is a little weird. So I show up at my former family doctor's office on the weekend, and they're like, you need an appointment. It's Saturday. And I was like,

well, I can't move my face. So I think that qualifies as like, maybe I get an appointment today. And she's like, oh, my God, yes, you see the doctor right away. I go into the doctor. And she's like, I think you're having a heart attack. And I was like, well, this doesn't make a ton of sense, right? Like, maybe I don't think that's the case. However, you're the doctor. I don't know what I'm talking about. And she's like, you need to drive to the hospital. I was like, well, if you think I'm having a heart attack, why are you telling me to drive to the hospital? Yeah. It's like, these two things don't align. Anyway, I go to the hospital. I see a doctor right away. I mean, for all of the knocks on Canada's healthcare system,

there's certain things in triage that they, they definitely see you. I saw a doctor probably within three minutes of getting to the hospital. And, you know, he's like, you're not having a heart attack. I was like, thanks. And then it's like, go sit and wait for like 12 hours. Well, we handle all the other urgent people, which is fine. And so he sees me and he's like, I'm going to give you some pregnancy and you'll be fine. And I remember going like, wait, what? Like, you're just going to give me some steroids and like send me home. Like nobody cares about how this happened. I'm a healthy at the time, 42 year old male. I'm not overweight. You know, I don't smoke. I don't excessively drink. I have nothing that would sort of indicate this. When I was in the waiting room

for the 12 hours, I started talking to a whole bunch of neurologist friends. And they were like, you should get tested for these four things. And it was like HIV, Lyme disease, mono, and something else. And I was like, can I just get a requisition to get tested for this? And he's like, no, it's just like a waste of the medical system. Oh, man. And I was like, wait, what? Like, that doesn't make sense. He's like, go talk to your family doctor. They'll figure that out. I got to go help out their patients. Watch your face at this point. Well, it's still paralyzed, right? So he's like, you're going to recover. He's like, you have a 99.9.8% of recovery. And I'm like, I'm not worried about recovery. I'm worried about what caused this. Right? Like before we figure out the future, we have to figure out like what, am I doing

something? I need to stop. And I went to my doctor on Monday and I was like, hey, can I get a requisition for these blood tests? Which in the states, you just show up and do it. And in some provinces in Canada, you can just show up and do it too. But in Ontario, where I live, they won't allow you to do that. You need a requisition. Anyways, she says no for whatever reason. She's like, if the ER doctor thought you needed it, he would have given it to you. You know, please, please fuck off politely is sort of what she said. And I was like, well, this is so weird. And I'm thinking about this. And then I wake up a few days later and I can't stand. Oh, man. So the backs of my knees, like if I'm moving, I'm fine. But if I stand still for like 10 seconds,

I'm literally crying. There's tears coming out of my face. I've never been in so much pain. It's like somebody stabbed the back of my legs with a knife. And I was like, wow, this is like so crazy. you know, like, emailing my doctor again. I'm like, I really think I should get tested for a whole bunch of stuff at this point. Like, I don't know what's happening. And she's, like, slow knowing me. She's like, it'll get better. Just give it some time.

And then, like, three or four days later, I wake up, and I can't open my mouth. Mm. Like, I have a lock job, basically. I can open it, like, a centimeter. And luckily, to cut a long story short, I end up talking to a close friend of mine who happens to be an eye surgeon. She's like, I'll give you the requisitions. she gives me the requisitions, I test positive for Lyme disease. I start the treatment for Lyme disease

because when you test positive, you can actually, you can fix it. And so I start taking, I think it's doxycycling, the antibiotic, which is the treatment for that and instant improvement. The cool part of this is I saw a neurologist in Ottawa who tested me for like 200 different things. You know, I went down to give blood and the lady's like, this is the maximum blood we're allowed to take out of you. I was like, Oh, this does not sound really good. And I came back completely normal, aside from the Lyme disease. So I'm glad we caught it. Glad we solved it, you know, made a lot of changes after that.

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restaurants in Canada I want to go back to to you and HubSpot though so like you've been on this journey for a long time from startup all the way to scale up to now public company sort of chairman and walk me through the different phases a CEO goes through. I personally break them out like 2 to 20 employees, 20 to 200, 200 to 2,000, and then 2,000 plus. And I kind of grate myself in these seasons. Like I give myself a B in 2 to 20, like 2 to 20. I was doing customer development. I was the lead user of the product.

I was marketing it. But I'm a crappy coder. And so the heavy lifting was really done by my co-founder. 20 to 200, I was kind of in my element. I loved it. I was in A, 200 to 2,000, maybe a B. And then 2,000 to 8,000, maybe a D. I really didn't like the work.

And I think that's the case with a lot of CEOs and a lot of executives and a lot of people. People have a season that they enjoy and they get good at it. I think that's very much the case for me. the one where you felt like you had to grow the most to fulfill the role? Really through the whole thing I felt underqualified to do it. And I don't know about you, but I still have imposter syndrome here on the podcast. And I had it throughout. I think one of my superpowers actually is I'm a learner and I try to get better and I listen to other people and I take feedback pretty well. And we had a mechanism that was quite good for giving

giving me feedback. Really good, actually. My co-founder was responsible for my annual 365 review. He's super introverted, so he didn't want to go around and talk to other people. So he sent a net promoter survey out to the board, the execs, customers, all bunch of people, 30 different people. He got a lot of responses, maybe 25 responses. And there were two questions, Shane. One was, on a scale of 1 to 10, how likely you refer Brian as CEO HubSpot? And two, why did you give that answer? And people wrote like novels about it. And it's hard for CEOs to get feedback, very hard.

Very few people give straight feedback to the CEO. So this was a good way to get. The end was big enough that people gave very, very strong feedback. And he summarized to give me my net promoter score. And then I started reading my review. And each page was different. So the first several pages were my features, and he's the software developer. He's like, here's your features.

So page number one, you're very good explaining HubSpot's vision. And then he pulled out quotes from the novels people wrote. Page two, page one through 10 were features. And they were great. And I was pretty confident that I was the best CEO ever invented after reading the first. And then the bugs came. Page 11 was the bugs. And there were 12 pages of bugs.

And I was pretty convinced I was the worst CEO ever invented. by the end of the 12 pages. And I remember when I finish it, I'm not a scotch strikers or remember I poured a glass of scotch, but that mechanism for getting feedback was we still use it. So the current CEO gets the same type of a thing and it's very, very, very useful. I think founder CEOs often have this problem that like, founder CEOs like to make decisions, like to be involved with the details, like to drive things, like to be in the middle of things. And that's a great strength when you get 10 people.

But that great strength you have turns into your greatest weakness when you have a thousand people. You're trying to manage everything, trying to manage everything that's going on. And so the consistent feedback was like, how do you get yourself out of the details? How do you stop working in the business? How do you start working on the business? That was kind of a common thread that I worked on across all 17 years. Was that feedback enough for you to walk away going like, okay, I see this. people are giving me feedback. I accept it. There's some truth to this. Or was there a part of you that

was like, no, they're wrong? It was pretty accurate. And I'm shaking my head through most of it. In the software business, sometimes there's something that someone thinks is a bug, but is a feature to somebody else? So some of my bugs I actually thought were features. Like, I could be really passionate about something. And Brian gets so passionate, it's like a little scary sometimes. I'm like, Fine. If like two out of 30 of you think that and the rest think it's a good thing, I can live with that. So there were several things that I was like, that's a bug that I can live with. And every year I try to work on one or two about the bugs, if I put 10 calories and try to improve the feature, I get like a thousand out. And so I more paid attention to the features and tried to get better at the features. And this took me a while to figure this out. And over time, just tried to hire people around my weaknesses. And I have plenty of them. I really looked at hiring the best I could in the areas where I was weak,

rather than trying to become an expert at it. And I'll give you one area where I needed a mistake on this. In the early days of Hotspot, I fashioned myself like a great product designer. I don't know why I did. I think basically because I followed Steve Jobs, everything he did, read every book about him, watched his keynote, was obsessed with him as CEOs are my era. And I was like, I can do that.

I can figure it out. I took classes and I really dug in. And for years, I was convinced that was a great product designer. I'm not. I just don't have that genetic code. It's actually quite bad at it. And it took a while before that feedback sort of hit me between the eyes. We started hiring people really good at it and enabling me to let go up.

What are some of the lessons you took away from your sort of studying of Steve Jobs, if you will, that you used effectively? one of my favorite things on the interwebs it's his keynote at his commencement speech at Stanford I think it's quite good and once in a while I'll look back at that he was based with cancer and the way he approached that was really interesting and he says it in a different way but he didn't waste any time that's for sure and then HubSpot a lot is based on his work we started the company out of Sloan

while we're a business school and at Sloan they did field trips and we did a field trip to the west coast and I remember this one day was a really good day in the morning we visited Apple it was like a year after the iPod came out and it was on fire and I remember Steve walked into the auditorium about a hundred of us and he was in a bad mood and it was pretty intimidating and I remember he looked he looked out and he basically was like what are you people doing here for business school like he wasn't into the whole business school thing and one of my classmates J.P. Gorski raised his hand up high and he said we were here from Sloan School of Management and we're studying innovation, disruption, and we thought we'd

learn from the best. And Steve just melted. He liked that a lot. And then he talked about how we came up with the iPod. And kernels of this very much made it into the way we thought about HubSpot. And the iPod, the way you described, was really simple, or MB3 players before. But you had to be a real geek to use one. And very few people were buying them and you had to burn music to him. It's a pain in the neck to do it. And he said, I really wanted something simple. So I wanted to take an FP3 player, build a freemium app, iTunes, and then work with the record companies and enable you to download a song for 99 cents a song. And he said, that's a 1 plus 1 plus 1 equals 10 for the consumer. And that was how we originally came up with HubSpot, like a marketer in

that day and age, putting Google Analytics and a blog, social media tracking tools, SEO tools, marketing automation, CRM, and all this stuff. And it was complicated. It was big, hairy problem. So we used that analogy very much that Steve used. Like, how do we make an all one system where the one plus one plus one will equal 10 across all the systems? So the morning was really influential. And then that afternoon, and we're kids. We're in business school. We visited a little startup called Salesforce.com and their CEO, Mark Beniop.

And so that day was really formative in thinking about HubSpot. Oh, that's crazy. Had you guys just taking your tuition and invested in both of those companies. I know. that's a good point that's crazy so you started it in school how did you learn how to hire and fire people like how do you know you have the right fit how do you know when it's time to move on from somebody you know i think about that as somebody who went from school to a large corporation and they have all these policies and procedures in place and then now as an entrepreneur i'm dealing

with CEOs all the time who've never really hired and fired and i'm curious as to what wisdom you can sort of pass on to people. Most CEOs, including myself, are quite bad at this. And I've identified some things that may be useful hacks, may not be useful hacks. This is also a season thing. If you're hiring someone when you're 200 employees, I'd see the mistake everyone makes and we made the mistake over and over and over and over again. If you're hiring someone that you want to go from 2 to 2000, you're just really attracted

by that person who came from Google or Microsoft or whatever huge company with a huge resume and all that stuff. And once in a blue moon, that'll work. But generally, that's a failure condition. If you hire the press release higher, that's a couple phases over you, I don't think it normally works. Same thing for board members. My analogy for being a CEO, it's like you're an ice climber going up the ice and it's

treacherous and you could easily slip. and what you're looking for are executive members who have been up that same sheet of ice but in the last three or four years. What you don't want is somebody who's 20 years over you or someone who spent their whole career on top of the hill looking down on the ice climbers. You want somebody just a little bit ahead of you on that ice climbing mission. But that's one thing I think people get wrong. I also think I think most people are bad interviewers, including myself.

Like I've missed a bunch. And I think the core reason for that actually isn't the interview. It's interviewees. Interviewees are so good in interviewing. You're interviewing a VP or a C-level person for a company like HubSpot. They're good at interviewing. And if they're not, they've been coached. They've looked on YouTube.

Like, I just think everyone, including myself, overvalues their ability to select talent in the interview process. I see that as overconfidence. I think also, like, I see it with the CEOs I work with, and I see it as companies get bigger, like you've got a panel of four people evaluating Shane as a potential VP. If all four people like Shane versus two people love Shane, two people were like, eh, I'm not sure but Shane, you always always go with the person with the least amount of weaknesses

in that lowest common denominator higher. I think that's a failure conditions. we've noticed that over time, I'd take two loves and two mez over three likes. I think that's a best practice that people should be doing. And I think people should be obsessed with reference checking. Yeah, calling the references, getting good at that, getting good at finding people in your network who work with them. I would guess I coach tons of CEOs on average for every director, VP, C-level person that's hired within 18 months. they're gone. How do you know when it's something to move on from somebody? I guess in a way,

you've either made the wrong hire or it's the wrong environment for that person to succeed or however you want to phrase that. But how do you recognize that? I had a CEO the other day tell me, the moment you start thinking about it, that's the moment to act on it. I've never seen anybody change their mind from that initial thought. How do you think about that? What's your reaction to that? Unfortunately, I feel like that's conventional wisdom. And I think it's, largely puts with what I've seen. I rarely change my mind on people in that kind of context. And everyone says, when you know you should move quickly, I never have. They call me weak. Have you ever regretted not moving quickly? It's sort of interesting to contrast that to sort of

like Jensen, who's been talking recently about, you know, he doesn't really fire people. He sort of like berates them into being better in a public way. Be rate is probably the wrong word. But he sort of wants to pull you towards excellence rather than fire you. But I don't think that's practical for most people or most organizations. So you and I both sat through the same Jensen presentation. Yeah. So I spent a lot of time thinking about CEOism and coaching CEOs.

And there's sort of like a set of best practices for being a CEO. It's almost like a CEO unofficial school. What's confusing about the CEO school that's been around for a long time is arguably the two, I'm not going to say best, but two amazing CEOs are Jensen at NVIDIA and Elon at SpaceX and that's stuff, that, that, blah, blah, and they completely ignored almost everything about CEO school, CEO lessons, CEO best practices. and I find that fascinating. Talk to me about that, right, where maybe there is no model. We hold up this model, we teach it, it's easy to do, we say the right things,

but in reality, the people that end up changing the worlds are often the opposite of all of the points that we teach. Berkshire Hathaway, for example, if you looked at their board of directors, I don't think they pass any of the sort of like standards that business schools would set for what an the independent board looks like. And Constellation Software is another example of that. So with Shopify, all these companies that have sort of done these remarkable things, they don't look anything like what we're taught in business school. When Homsaw was maybe like 50 employees, Shane, I joined a CEO group. And I largely joined the group because I respected one of the CEOs that I got named

Colin Engel. And Colin made the room a vacuum cleaner said I robot. And I might describe my relationship with him in two words, man crush. I really was a fan of Collins. And I remember this first CEO group, we met all day, once a quarter. And there's a couple funny things about the CEO group. But I joined, and I sure remember spending some time with these 10 CEOs. And two were kind of, they're quirky as the way I would describe them, and very unique personalities.

And the other were like central casting, a blue blazer, tan pants, like really central casting backgrounds and everything and they acted what I thought CEOs were supposed to act like and I kind of acted like that back then and when I looked at the numbers we all showed each other numbers the two quirky founders CEOs were crushing it and the eight central castings were with a and I was like enough with trying to be central casting I'm going to be exactly who I am and we're going to make everybody else work around who I am and it's a lot easier being who you are than somebody else everybody else has taken that was when I was like I'm quirky too I don't care than I'm quirky.

I'm just going to lean into my quirkiness and be myself. And I've sort of been that way ever since. And I don't think there's a profile of CEO. You're talking earlier how you'd love to hire somebody with two, I love this person and too, Matt. Is that because of that? Because the person who says all the right things, everybody's going to be okay with, but the unconventional person you're going to get really too extremes, you're going to get

love or hate. I think what happens as the company scales is you hire for a lack of, weakness, not for spiky strengths. And that's institutionalized in the scale ups interviewing panel and process. And I think that's a mistake. And that's one of a few things that leads to really mix success in hiring execs in these companies. Who do you think is the most underrated public company CEOs? I think the guy running Uber has done a nice job. That was a very, very, very difficult. thing he took over. He got it profitable. I think he's done a really, really nice job. Very quietly done a very good job. How about you? Oh, gosh. I think Toby is massively underrated.

We were sort of talking about him during the break here. What are your thoughts on Toby? Toby reminds me a lot of Colin Engel, actually. Just whipsmart. One of the things I like about Toby and Colin is their very first principles thinker. They don't care to receive conventional wisdom. They're going to think it through from scratch, and sometimes you're going to get it wrong, but a lot of times they're going to get it right and do something really innovative and smart. Toby's got so much right. He's got some big stuff wrong, but for the most part, he's done a really, really good job. He's certainly not central casting.

Yeah. Certainly not. But I think he's brilliant and a great CEO. He's running a great company. I like that term central casting. Another person who stands out to me, most people are probably familiar with now, but 10 years. ago, nobody would have ever heard of is Mark Leonard from Constellation Software. She's not really on my radar.

Yeah, exactly. I think they only issued equity at the IPO and they're a, I don't know, must be $50, $60 billion company now. Amazing. See, I wouldn't put Toby in the underrated because I rate him so highly and I feel like people in my circles rate him highly. I rate him highly too, and I still think I underrate him. Okay, got it. Yeah, yeah, totally.

There's one other interesting thing that's, I think, relevant out of that CEO group. I remember going to the CEO group meeting, the first meeting chain. And what I didn't realize is there was a topic for the whole day. And one of the quirky things about HubSpot up into that point is we didn't have any HR people. We didn't allow anyone to talk about culture because we didn't think we could imagine it was too squishy. And I remember I arrived there in the first day. first thing that you put up was the topic of the day and sure enough it was culture and I remember thinking that's going to be a big big wasted time at least I got to know my man crush the whole morning

I was pretty disengaged and then Colin at lunchtime remember he said to me it's like why aren't you engaging you don't like the topic do you and said no I think it's a waste of time he said Brian culture culture is how people make decisions when you're not the room culture is how companies really scale okay okay okay okay got it and then the afternoon sort of engaged in it and then the next day he go to the office so my co-founder Darmesh says how's the how was it how's calling like how did it go I said it was really really good there's there's one they do one topic a day said oh what's the topic I said it's culture shit what I wasted time I said no Darmich

culture is how people make decisions we're not in the room culture is how HubSpot's going to scale and he said okay oh hi buddy who's the best you are I wish I could spend all day with you instead uh Dave you're huff mute

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Scotia Bank, you're richer than you think. And it's very hard for me to assign work to my co-founder to this day. Somehow I assigned him to be the culture czar, a pub spot. And he did an excellent job and still is doing an excellent job of marshalling the culture from, you know, 50 employees, 8,000 employees. And he did two clever things. First thing he did is we're big on net promoters surveys. So he's surveying all the employees.

Gellin went to 10, how likely to refer HuffSpot is a place to work. And then why? Again, people wrote novels about it. And he kind of broke it all up into, you know, different topics. And then he wrote a PowerPoint presentation called the HubSpot Culture Code that basically describe the relationship being toys and company and just sort of outlined how we thought about culture. And then he posted it on the internet and it blew up on the internet. But we continue to do that NEP promoter score once a quarter for the last 15 years. And we've been tracking

our NEP promoters score per quarter. And that's been very, very useful. Then we post every response to the NEP promoter survey on culture on the wiki. And then we address the issues that come up. That best practice to serve as well. Every six months, we refactor the PowerPoint deck. It's a living, breathing document. And we basically treat culture like our second product, like our product, HubSpot, if it's unique relative to the competition,

it's good quality product, and it delivers value. It's like a magnet that pulls customers in and retains them. Same thing with the culture. If it's unique relative to the competition, it's high quality and adds value. It's like a magnet that pulls in employees and retains them. And so we put a lot about into that culture stuff. And I think a lot about how do you go from startup and scale up?

I think a key part of that is getting your culture right and writing it down and institutionalizing it. I'm going to make a statement about culture. And I'd love for you to argue, take both sides of the debate, if you will. So I'm going to say that culture is the only sustainable advantage. I disagree. What? Let's take Uber. They had a certain culture.

Dara, the new CEO came in. I'm quite sure he made massive changes to the culture the founder put together, and he thrived. I think some of the benefit, of course, is his culture, but they had major sustainable competitive advantages in that they had a fleet of drivers and customers and a network effect and software their works. And he's probably been there 10 years, and I don't think it's all culture. Oh, that's interesting. So in my mind, I would sort of think of that more like they have.

had a advantage, like an operational advantage that came from the network effect and the scale. I don't know if that would have been enough to sustain it going forward without the culture. Fine. I sort of agree with that. I think the best example on the other side of this is Satya. Satya is on my Mount Rushmore CEOs. A lot of people push back from me. It's like, oh, I wasn't a founder. You shouldn't be on there. He's on there for me. Because, Microsoft was gone very, very sideways for a long time. And he stepped in and really did change the culture in a massive company. And couldn't be more impressed with him than the culture change and how well that worked. So that's my flip side of the argument is stopped yet. Okay. Who else is

on your Mount Rushmore? Jerry Garcia is on my Mount Rushmore. Great CEO. The aforementioned Steve Jobs on there. Why Jerry Garcia? Grateful Dead. Really? Why, Jerry Garcia? That's the most obvious one on there. Why? No, I'm curious. I'm not a Grateful Dead. I've never, I don't think I've ever really sat down to listen to The Grateful Dead. So you're going to have to walk me through this one. Okay. Jerry Garcia was the CEO cut in the clop of Colin Engel and Toby Lukie. Really dislike conventional wisdom and kind of rethought everything from first principles, starting with the music. So they started that band in the mid-60s. And at the time, there were. was all kinds of rock and roll music and there was jazz music with country music and bluegrass

music and they didn't do any of that they created a new genre of music people are referred to as jam bands now but garcia himself was a bluegrass player and the bass player was a jazz musician and the keyboard player was a blues guy and bob weird the singer was kind of a country rock and roll guy and they blended them all together and they infused this jam band mentality into it and they really stretched the songs out with improvisation. So they sort of rethought the genre and made a new type of music. The product was unique and the go-to-market was exceptionally unique. If you think of like when I was in high school, if I wanted to go to a Rolling Stones concert, I would call ticket master and I would wait until whatever it is, 1.30 on a Tuesday and the Rolling Stones tickets were

on the sale and I would dial away. It'd be five minutes later to dial away. Intermain may not up through. The people who ended up buying most of the tickets were the scalpers. The scalpers had a whole bunch of people buying the tickets that sold the tickets in a markup. And so the front row of the Rolling Stones concert was a bunch of bankers of venture capitalists, people who could afford the tickets. And the great world, they didn't like anything about that, Shane, nothing about it. They particularly didn't like a bunch of bankers and venture capitalists in the front row of their concerts. They wanted their hippie, crazy fans in there. They also didn't like the distribution set up. So it's Grateful Dead and the Ticketmaster took their

slice and then Scouper took their slice and then the fans. So they said we're going to disintermediate just like the internet did do so many things. We're going to disintermediate those two layers and we're going to sell tickets directly to customers. The way they did it was you listen to a 415 recording that explained what was going on. And the way machine you would buy the tickets was you have to put a three by five card which concert you went to. You can only buy four tickets per concert. So the scalpers are less insensitive. And then you had to go to the post office to get a postal money order.

So just a total pain in the backside to get a postal money order. And then you had to put a self-addressed down below. And then you put it a regular envelope and melded it. Now, how would the Grateful Dead Chain decide who gets the front row seats? I have no idea. The way they sort of did it was that self-addressed diaped envelope, the more beautifully you could decorate it with dancing bears and mushrooms and sprinkles.

I love it. Yes. So they solved a bunch of problems. That's not the end of it. What was the last concert you went to, Shian? Oh, God. It's been a long time. Did you go to Taylor Swift?

No. I am a Taylor Swift fan. Okay, let's just say you went to Taylor Swift in Ottawa. Yeah. And you showed up with your giant camera and your boom microphone and you showed up there. What would have happened at the gate? They wouldn't let me in. Why?

Why didn't she want you recording it? It might affect other people's experience if I have a boom mic. I mean, you can't prevent people from recording on their phone. So at some degree, they're accepting it. The NBA actually went through this a couple years ago. They were trying to like really block people from posting clips on social media. Then they actually embraced it. And it changed the whole league.

It got way more people. Sorry, this is like a sidetrack to this. But like that change in the NBA really. change the NBA. Okay, pre-Iphone. Let's say you were going to a Rolling Stones concert and you had all that equipment you're walking. Of course, they would block you.

And the reason is you see the Rolling Stones and Boston and New York and then Philly and then Miami. The exact same concert. Like, they don't miss a note. They're fantastic. Same thing. When you walked into the Grateful Dead with your big boom mic and your big camera, they put you right in the taper section, the perfect spot to watch the concert.

They instead they did you to tape it. and you taped it and then you went from Boston and then you went to New York you taped it, you went to Philly, you taped it, and then you went to Miami and you get back to your dorm room and you copied as many tapes as you could

of the best concert, not the worst concert, and you gave them out to all your friends. And that was how they market. They gave away the content. They were the first in-down marketers to really nail that. They were the first real freemian model. They were the first viral marketers.

And the way they did was brilliant. And it worked for them because every concert was quite unique. They were a jam band, so they never played the same set list twice. And so there was an incentive for knuckleheads like me to go from Boston to New York, up and down the East Coast. In fact, I did that last week. It was at the sphere, and I saw them Friday, Saturday, Sunday.

Garcia was a genius. He's a marketing genius, actually, and I think he's a music spot. That's fascinating. I'm going to have to listen to The Grateful Dead now. I'm like... I'll send you some stuff. Yeah. I wrote a book on this called Marketing Lessons from the Grateful Day. We started talking about inbound marketing there. I'm curious as to you guys pioneered

inbound marketing to a big extent and definitely got the momentum rolling there. How is that changed in the past few years? And where is that going in the next few years? Ironically, I think it kind of went on in favor a bit over the last few years. And I think it's about to come back in favor. The things that changed in my own. aren't that different. Instead of like cold calling people and spamming people and advertising of people and renting space on YouTube or renting space on your podcast or your blog or renting space on New York Times, create your own New York Times, your own podcast, and become your own publisher and then pull people in through Google and search and other social outlets. It works very, very,

very well. You're living proof of how well it works. The things that have changed or the social media networks have changed. When we first wrote about this, before we started HubSpot, we started writing about email marketing. Dig and Reddit were the two big social media sites. I don't think things around and Reddit's gone through all these iterations, but obviously with Facebook and now it's TikTok, it's Instagram. It's all these new social media sites. It's YouTube. People live in YouTube. It's podcasts. And so the medium isn't necessarily a long form blog like it was back when we started HubSpot. It's videos, a lot of short-farm videos. And so that's changed quite a bit. I think what's interesting about what's going on now is today you go to Google and you get your 10 Blue

Links. If you look across our customers, that's 62, 63% of the inbound traffic is via Google and most of it's organic. I think over the next five years, that's going to change a lot. I think Google's going to have to change a lot. And I think people are going to spend more and more of their time inside ChatGPT and they're all ChatGPT's competitors. And I think when you're engaging in that way and you do a search and chat GPT for, let's say, HubSpot, it will tell you about HubSpot and then you'll say, well, how does HubSpot compare it to Salesforce? It will tell you about that. How much about HubSpot cost it will tell you that. Like, people know a lot about HubSpot. One of the brilliant things about Google

is their blue links and they didn't mind sending you out their website. It's a very counterintuitive idea. I think that's going to start changing as consumer behavior changes. And I think it'd be really interesting to see how it develops. Do you think content is just going to get overwhelming? I mean, you can create content with like two sentences now. You can create blog posts that would rival probably the best people we're putting out maybe 10 years ago with almost no effort whatsoever. I think you're right. And I think it's not just that, but it's going to be emails.

Like I think that the robo emailing and the BDR is, I look at lots of startups in the CRM phases might imagine. but there's, I counted about 48 startups building automated AI agents. I still think having a unique perspective and a unique personality is going to work. I don't think your podcast goes away because I start something that sounds like you and I use an avatar to deliver it. I think something what you're doing will last the test of time. And I think a lot of people, particularly in scaleups, run away from their personality. They make it generic.

And, like, you have a certain vibe and a certain personality. I think that kind of works for you, and it's going to be very hard to replicate. Quality and uniqueness, never go out of style. And I think we're going to be increasingly important as the internet just fills content that's AI generated. It's almost what you said before, like lean into your individual quirkiness and your tribe will sort of find you and then go around with you. Although you have me worried, we're almost a million people on our newsletter now. I'm like, oh, God, if this is going away, I got problems. I also think we're going to see the trend.

I'm certainly not the first person to say this, but I think you're going to see a lot more small, big companies, and you're going to be able to get a lot more done with a lot less people. I don't think in a billion-dollar company, you're going to need three, four, five-hundred-person marketing organizations. I think the new tools are coming out, including upspots tools in the CRM suite. I just see how incredibly powerful they are.

I think you're going to be able to scale an whole new way. And I think the AI revolution, like when it comes to inbound, I think top of the funnel gets more difficult. I think middle of the funnel gets easier. Really high quality personalization on your website, on chat, on everything. That gets much more powerful. Top of the funnel gets more difficult. Yeah, I think inbound's going to change.

But I also think inbound, you're going to kind of make a comeback. How do we do outreach in a world of AI and in a world where people bombarded with, is it going to be freemium and then pulling people in through that? And like the outreach is letting them know about the freemium stuff. You've got to get good at the branding thing, again, it turns out. Because getting into your or my inbox is going to become exceptionally difficult with all the changes Google's making to email that's getting harder as it is. But the robo emailing is going to go wild and the robo content's going to go wild. So it's a little more around branding.

You have to kind of be good at everything. It's like a baseball five two player. You have to be getting found in YouTube. You have to be getting found on all the social states. Chat ChbD is going to understand you perfectly well. Google's going to understand it perfectly well. And you need people tripping over your all over. place. I think people have to get comfortable with the fact they're going to have less new

visitors to their website because ChatGBT and their ilk are going to know so much about you and not have those list of blue links. They're just going to live on there and learn so much about you. And then when someone's quite serious, they end up on your website and you have to get very good at personalizing that website experience. I also think people are going to end up keeping more information behind the paywall and the login wall on their websites because they want to keep a little bit back from chat GPT because chat chbt is going to understand the public stuff so well I think it's going to change in a good way though I guess the baby step that google made on that was like when they would just show you sort of the excerpts yeah if you asked a question it'd be like

basically giving you a link but it's like really hard to find it's like here's the answer to your specific question YouTube is fascinating because unlike voice podcast YouTube has virality to it So, like, when we do an in-person recording, the YouTube breach is larger in some instances, not all, than our podcast reach. And so we get like 300,000 people sort of listening to a podcast episode, but on YouTube, we'll get 300 to 500 to a million people. Nice. People. But it's YouTube's algorithm picking it up. It's like, people watch this. But what we can't do is, like, send people off that platform.

So it's really good for like stats. Like I was at the gym the other day and this guy's like I got two million TikTok followers, but I can't do anything with them. Yeah. So I can keep them on this app and I'm really famous in this localized environment. But TikTok is 100% in control. I don't own that relationship. Same as YouTube.

I don't own the relationship with the viewer YouTube does. The minute it doesn't like me and wants to cancel me or doesn't like my content anymore or wants to promote a different message, whatever that algorithm is that's doing that can just like, you're gone. I think you're right. I thought Google was going to roll over and play dead there for a while. Like, I moved most of my search traffic to Perflexity really like it. Google's kind of started and stopped a whole bunch of stuff,

but recently they're making noises like they're not going to roll over and play dead to perplexity. That's such an interesting company right now. And to watch their moods will be very, very interesting. It's a challenging time for them. But it looks like they're going to, they're not going to let Perplexity just hover up a bunch of their users. Hopefully not. We all want some competition here. I have a couple of random questions. I'm curious what you've learned about making decisions that you think other people miss.

On my CEO journey, for a long time, I kind of look for consensus. I think consensus is really the enemy of scale. And so I used to say whenever we're making an important decision, there should be winners in the room and losers. We shouldn't find like that negotiated settlement that everyone's happy. Somebody should be unhappy. Three or four people should walk out unhappy, and one should walk out happy. And we're all going to be good with it. As you get bigger, there's gravity pulls you towards consensus,

and I think consensus is the enemy of greatness. How do you fight that? I write that on whiteboards. I talk about that inside of HubSpot. I try to make an example of that every time I'm in a room. I've written a bunch of blog articles about that, wiki posts about that. At one point inside of Hubstall, we had a terrific T-O-O.

I love. And he had a lot of great qualities. One of his qualities they didn't love was he was a consensus person. And we had a lot of conflict over that. And so we talked about that a lot. The management team talked about that a lot. But I sort of had this thing like there's going to be winners and losers in every argument. And if no one walks out a little bit sore, we probably made the wrong decision. So go deeper on that for a second, though. So put me in the room at one of these meetings where there's four people on one side. There's four people on the other side. How do we come to that decision? Is it the highest paid person in the room? Is it the person closest to the problem? Who actually makes that call? Let's just say it's my call, which is rare. And two

people in the room are saying black and two people in the room are saying white. I think that the majority of CEOs are walking out of the room with the decisions great. Trying to please everybody. Yeah. Try to thread the needle. And I think that's a problem. It creeps in more more, the bigger you get the worst that problem gets. And I always tried to walk out of the room. It's like, we're going to pick black or white. If you lose this decision, you might win the next one. Let's not get all pissed off about it. We'll all survive. And I think that's the right way to scale it. Is there anything else you've learned about decision making that you're like, oh, I wish I knew this sooner? I would say one thing I've learned about scaling a company, like from the

outside, went from a company with an idea and two employees to, you know, that's worth $30 billion and 8,000 employees and a couple hundred thousand customers. It looks like a smooth graph from the outside, but I'll tell you what, it's a grind on the inside, building upspot. It's very much two steps forward, one step back, two steps forward, one step back, two steps forward, one step back, the whole way. And there was no silver bullets along the way. There was no one higher that completely changed the game, no partnership and change the game, no customer, no investor. It was all kind of two step forward, one step back, two step four or one step back.

And the other thing I would say about the journey is kind of related to that. There was definitely wartime and peacetime. When you're halfway through a two steps forward, it was peacetime. When it was one step back, it was wartime. And I love wartime. I'm definitely a wartime CEO. I hate peacetime. I really need to sit on my hands and just let it go.

Like, it's going great. Leave it alone. And I have our time doing that. And I think certain CEOs are peacetime and certain CEOs or wartime. I'm very, very, very much a wartime person. Like COVID, wartime. We made so many changes during COVID. I hated COVID and I hated the impact in society. But inside a pubs about that was a fun chapter. What does wartime mean for you? Is that like we're fighting for our very survival? Does it mean we can just move faster and sort of ignore some of the bureaucracy? What does it mean? And I think peacetime is bottoms up and more consensus. A wartime is more top down. It's like, hey, it's wartime. I don't have time to build consensus on this. This is what I think we should do. We're going left.

And I like that about wartime. And wartime is like, okay, I remember 2010, the economy was shaky back then. We were a very young company. Maybe it's 2009. And our retention statistics were horrible. Everyone was canceling our product, wasn't good back. And we lost, I remember, of the thousand customers we had at the beginning of the year, we lost like 700 of them, like just terrible churn rate in 2009.

And that was existential. And it was like, let's just stop the music and start over. Everything we're doing going forward has nothing to do with timing of new customers. It's like, how do we can delight every new customer we have? Let's stop obsessing about how do we turn a prospect into a customer? let's obsess about how to we turn a customer into a delighting customer. And so that was a crisis that really worked. We changed the culture of the company.

We changed the center of gravity from prospects, customers, never waste a good crisis. That was a really good crisis. What you were building this, how did you manage, and I don't want to say balance, it's the wrong word, but it's the word everybody understands. How did you manage work life harmony or balance, especially during the high pressure periods with young family? I didn't. I did it very poorly.

What would you go back and tell your younger self, no? I'm really proud of it. I think my grandkids will be proud of it. And I think it took a big effort on my part to pull it off. And if I said, oh, man, I wish I'd just put it in 40 hours a week back then. I wouldn't be sitting on those podcasts with you. We wouldn't have pulled it off. And I know that's not a popular answer.

I'll probably get clearly read on Twitter for saying that. I think that's a reality of top spot. It was a full context for it. I've noticed this thing. And I think people don't like talking about it, but when you find exceptional people who've done exceptional things like yourself, they're not always the most well-rounded people in every aspect of their life. And yet we sort of expect them to be, right? It's like we love Warren Buffett, but we want him to also be a better family man. The weird thing is the minute

Warren Buffett starts doing that, he's no longer somebody we're talking about as Warren And so it goes back to those sort of like strengths and weaknesses. And my hypothesis is that people at the tail end of the curve have incredible strengths and incredible weaknesses. And by I try to address those weaknesses, whether it's school, society, nudging people, we actually limit, we put a ceiling on the strengths that those people can actually deliver to the benefit of the world. You'll probably Hillary on Twitter for saying that, but I agree with you on that. I'll give you an example. I've never been married. I want to get married. It's actually on my to-do list this year. I don't know. It's going to me this year, but I never did it. And every time

I had a relationship, like, what came first. And do I regret it? I don't know. I've had a really good life. I've really enjoyed the HubSpot run. I'm super proud of it. I think when I'm 85 and looking back on my life, I'll still be super proud of it. I think my great. I think my great kids will be proud of it. So yeah, I made some sacrifices. I'm okay with it. We always end the podcast with the same question. I think you'll have a really good answer to this. What is success for you? I think it's a really cheesy James Taylor song named The Secret of Life is enjoying the passage of time. I think he's very right about that. And think about that post my accident. I very much try to not do anything that I don't want to do, or if I'm doing it, not to do it

very long. And I try to live in the present and stay out of the past too much and stay out of the future too much. I think the secret of life is about how do you set your life up so you're really enjoying that past your time. That's a beautiful answer. Thank you so much for coming on the show, Brian. Thank you, sir.

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