7 Brutal Questions for a $20B Founder

0:00 We were constantly like Salesforce is going to crush us tomorrow. Did you see their announcement? We're dead. I feel like I can rule the world, I know I can be what I want to I'm excited to be on your show. It's kind of our show, Brian. Yeah, it's true.

0:22 Do you consider yourself retired? I don't think I'll ever retire. But you're not the CEO of a company. Yeah. I have a whole bunch of

0:29 Interesting stuff going on. Are you happier in this phase of your life than when you were running a twenty or thirty billion dollar company. Or how about happier compared to when you're running a ten million dollar company? Where where's like your levels of happiness been? Because you've founded a company. That is now has, I don't know, five, six, seven thousand employees.

0:47 billions in revenue. Now you're retired and you're not retired, but you're not running a company and you're a little bit of a uh a V C and advisor. So tell me about your happiness levels between each one. Okay. I'm gonna give you like a grading system in my head of For number of employees.

1:05 Two to ten employees. It's like a P C. I didn't really I could write code, but no one wanted it. Like I did you don't add a lot of value. At that phase. Ten to a hundred. I was like an A. I felt like I knew what I was doing. I had been in

1:19 You know, scale ups before A hundred to a thousand, you know, maybe A minus. Like I kind of felt like I knew what it was doing. A thousand to ten thousand I didn't enjoy the the secret of life's enjoying the passage of time. I wasn't really enjoying the passage of time. It was a lot of I was just working on a lot of stuff I wasn't that interested in, so

1:41 Yeah. So it it depended on where I was in the in the history of HubSpot. Like I I had sort of CDO market fit between ten and a thousand. That's Like you're you're you're putting a hundred to a thousand in the same category. That's kind of astounding to me. That doesn't seem like those should be in the same category. So you enjoyed That whole range equally.

1:59 Yeah, I work when I my first job out of school. I was the first BDR in a company called PTC, it's a CAD software company. And I joined it was like Three million in revenue. And when I left, it was, you know, billions in revenue. So I sort of saw that journey and I was part of that machine. And so

2:18 You know, I took a lot of that and brought it with me into HubSpot and I just felt like I knew what I was doing in there and I was working on things I really enjoyed. There's a lot that changes between a hundred and a thousand. I just sort of remember being quite motivated and happy with my day to day in there. Very little. wary in that phase about what the nom and gov committee of the board thought. Very little interaction with our Compliance and legal folks, things like that.

2:43 Um, mostly just working on You know, are the employees productive and happy or are the customers productive and happy? Like really focused on that and I li I like that type of work. Can you go through Okay, so your categories were two to ten, ten to a hundred, hundred to a thousand, and then a thousand to ten thousand. What about

3:02 how hard you are working. Like in terms of hours. Yeah, people talk about nine nine six. That was at least that. For both our mesh and I we were we were Pedals to the metal the entire time.

3:13 And if we were working, we were thinking about working. It's not for the feign of heart. It like if you look at my life it's kind of interesting. Like I'm fifty eight. In the years they should have gotten married and had a bunch of kids I had HubSpot. I'm still single. And yeah, you're kind of married to your company and you're you're full on. Like the nine nine six thing, it's at least that for the founders. And I work with a lot of founders today.

3:36 It's that's a minimum for the founders, I would say, these days. And you got you guys said something on a tweet that I thought was You said it. I thought was kind of interesting, like when you're a founder Like ninety percent of the time stuff's broken and you're dealing with problems and things kinda suck.

3:52 I'm angry. I'm angry most of the time. Angry most of the time. Ten percent of the time it's like we got this. We got it. Everything's going our way. The winds at our back. But it's pretty rare like You live your day looking at your Slack and your inbox and your text and it's mostly bad news in there. Well, so uh tell me, once a company gets to a hundred

4:13 Or a thousand employees or ten thousand employees. Does that emotion go away? See. It's the same ratio. It's still mostly a shit sandwich. Do you feel existential threat? Like my business.

4:27 We have plenty of money and very profitable, whatever, but for some reason I still feel like an e existential threat all the time where it's like if we don't do This well, we're going out of business. Constantly. We were constantly like Salesforce is going to crush us tomorrow. Did you see their announcement? We're dead. Please said that so many times. Yeah, we tend to overestimate where our competitors do and underestimate what we do. Maybe there's a correlation between like how like shitty you think you are and how good of an entrepreneur you make because

4:56 Maybe there's no correlation, but there's like a correlation between peop people who start businesses because I notice that I have like I personally have very negative self talk where it's like You're shit. You're nothing. Uh you have to prove them wrong. You are horrible. You barely growed.

5:11 You can't do this. You have to pr like my I it and it wears people out though because I actually think that that's negative that's a pretty poor way to motivate people. Uh but it motivates me. I'm the same and then people say, you know, you want to be very positive and positive and motivate the people. I tend to be paranoid.

5:28 I still after all these years. Have imposter syndrome. I'm a little nervous talking to you today. Believe it or not. Really? Why? Yeah, I'm not as g given all the success I've had.

5:41 My confidence doesn't even remote. And my inner n monologue is like you got so much to prove, dude. Don't fuck it up. Does Darmesh feel the same way?

5:53 Yeah. I I can't say for sure, but I I I think very much so. Do most other so you run in a circle with some of the best entrepreneurs on earth, most successful entrepreneurs on earth. Is that the common thread? Yes. Almost all. I interview all these CEOs and I ask them during the interviews, you know, do you have imposter syndrome and

6:11 A ham and ham on hause I don't want to say they do. I do. Almost all of them. Let me ask you one more question about all this and then I want to know about uh what your s like the more of the Sequoia stuff because I think that's super fascinating. Sometimes

6:25 I think that with being an entrepreneur The hard part, I've been thinking about this a lot and I've talked about it a lot, which is the hard part Emotionally. Isn't the risk taking. The risk taking is actually not that challenging because in a lot of cases the risk is not that big and you could like Like even if you go big, you can kinda land somewhere and be all right. The hard part is the uncertainty.

6:46 And like asking yourself Am I spending time for the next six or twenty four months on this thing and will it actually make my life better or get me to where I think I want to go? That that uncertainty part is quite challenging. Looking back Was dedicating all this time like do you look back at uh the last twenty years and you're like that was a life well lived, or would you have changed anything? No.

7:09 I think it was. I'd I'll take the trade off. It was a lot of fun. Um I mean there was just a lot of joy and d the people at HubSpot are amazing, the customers are amazing, partners are amazing. So many, so many happy times. A lot of down days, but like the up days. Definitely outweigh it.

7:26 I'm super proud of what we built. I'm you know. Yeah, I I I wouldn't trade it. The thing I would say about HubSpot that the it's it's a little bit of what you said, but is I think of it as like HubSpot was like Two steps forward Pew One step back. Two steps forward. Phew, one step back. It it looks like oh, if you look at the grass like ooh, that was

7:45 That was an easy ride. It wasn't like we had lots of issues and lots of problems and lots of setbacks along the way. It's a little that I think what Good entrepreneurs do. Is

7:57 They just stick with it. Like there's problems and issues and that step back and they don't fold. They just like, We're gonna get through it. We're gonna rally the troops. We're gonna figure out we're gonna learn from that. Mistake and go for it. Almost all the stepbacks were self inflicted. Alright, a few episodes ago I talked about something And I got thousands of messages asking me to go deeper into explain and that's what I'm about to do. So I told you guys how I use chat GPT as a life coach or a thought partner. And what I did was I uploaded all types of amazing information. So I uploaded my personal finances, my net worth, my goals.

8:34 Different books that I like. issues going on in my personal life and businesses. I uploaded so much information. And so the output is that I have this GPT that I can ask questions that I'm having issues with in my life, like how should I respond to this email? What's the right decision, knowing that you know my goals for the future, things like that. And so I worked with HubSpot to put together a step by step process showing the audience showing you The software that I use to make this, the information that I had ChatGPT ask me. All this stuff. So it's super easy for you to use. And like I said, I use this like 10 or 20 times a day. It's literally changed my life. And so if you want that, it's free. There's a link below. Just click it, enter your email, and we will send you everything you need to know to set this up in just about twenty minutes, and I'll show you how I use it again ten to twenty times a day.

9:21 Um all right, so check it out. The link is below in the description. Back to the episode. What would you have done differently to not make that mistake? What are the things we did that worked? We had a thing that that we did called the Pop Hole Report.

9:36 In we live in Boston in this like this time of year is Popules everywhere. And that was the analogy we used at HubSpot. Like We would create these potholes and sometimes you kind of bounce through the pothole and hurt a little bit. Sometimes a pothole got so big, like you drive your whole damn car in it and Ін офтенс

9:55 There was a series of decisions or a series of data that we could have avoided the pothole. So the pothole report was Every time we had a plot hole, we look back and like how how should we have handled this A year ago, so that wouldn't have happened. Or what data do we wish we have? I'll give you an example of that. We had a pothole in like Two thousand eleven.

10:14 One of the things we did at HubSpot is we hired really good support people on our secret sauce in hiring was support. Is would walk into an Apple store, would buy an iPhone. Would hire the kid who sold us the iPhone. And they wouldn't let me in the Apple storing chambridge anymore,'cause we are so many people. And so the and the value problem is great. You make a little bit more money, but

10:34 How'd you like to sit down at work? It was a really good value problem. How many support people did you have? We must have had the forty, thirty, forty. And then what we would do is we use that

10:44 support group to promote into CSMs into sales into products. So we fed the whole company really these Apple store people that were terrific. And period of time over like a few months, like we promoted a bunch of people out. Congratulated the promoted them. And then

11:04 We were a little behind on hiring and the customer numbers were way up and so We pride ourselves on like answering the call within thirty seconds and then staying on as long as they wanted. And You know, our wait time went to like twenty minutes and customers were like, What the hell was going on? That was a very

11:20 solvable predictable problem. that you know, if you had if you just look at this one chart, we won't make that mistake. Yeah, and we never make that mistake again. So So many things like that along the way. And as you grow, if you're going fast. Everything breaks.

11:35 You know, people break, processes break, systems break, like everything's just breaking, breaking, breaking with scale. What I've noticed, particularly talking to people on MFM Is that It really takes like eight or nine years to see something become a real thing. Yeah. It takes a lot longer than people think. I think HubSpot, if I remember correctly, I think you guys were at twenty million in revenue by year six, which is like pretty huge. I think that what we're seeing right now about software companies

12:00 Growing faster. I don't think a lot of those guys are gonna last. I think that there is a correlation between how fast something grows and potentially how uh fast it can die. But I do think that in order to build something That's a second mountain business. And so I refer to a second mountain business as something that's beyond just making your initial like financial security c uh uh number That really does take decades. Do you think I'm wrong there?

12:25 I don't know. I the the I sp spent a lot of time in these companies that go zero to twenty in six months. No. I've been shocked. I'm shocked at how fast these companies are growing. Uh, and there's a lot of them.

12:39 And some of them are going to flame out and some are going to get disrupted by the model companies. But some aren't. Like some of them are like pretty legit. And selling to non tech companies and building real businesses. So like if I look back, like assuming we're in a bubble today. I look back at the bubble in ninety nine.

12:59 That I lived through a hundred years ago. It was a little bit of the same mania. The thing that's different is the sharps back then. They were only selling to each other. And when the kind of house of cards fell, it kinda fell on everybody. And they really have much growth and much revenue. It's

13:14 It that's what different about today, like And I think the difference is the products are different. Like you think about s SAS or you think about mobile, like SaaS kinda started in the like Yeah, sale for start in two thousand nine, HubSpot, you know, where two Yeah, for in a ten year period a whole bunch of companies have started Not much happened after that ten year period.

13:33 And not much came out that was like, Oh my God, that is amazing. The customers were blown away that they could grow that fast. The platforms are sort of stat. Same thing with mobile. It all happened within like a couple of years. I kinda think the same with AI. I think most of the big AI companies are already founded. And it's gonna settle in relatively quickly in the next year or two.

13:53 And I the thing I think it'll be different too is like out of the last one Amazon came out, Google came out. Ebay came out, Salesforce came out, there were like four legit lasting great companies that came out. I think there'll be a lot more this time. This this bumble will pop, but I think a lot more companies will come out the other side. Sequoia's the best of the best.

14:12 Uh you guys see everything and you see the best companies. What are the trends that you're seeing right now amongst the companies that are Rocket ships but also you thinking They're gonna be durable. Are there any trends that you're noticing um

14:29 Mongst the entrepreneurs. That sets them apart versus previous generations. Okay. I I came up with like a rubric for so I I see a lot of pitch. So many pitches. And I'm trying to f yeah, what's my unfair advantage? And my unfair advantage is like I spend a lot of time with CEOs thinking about CEOs, thinking about the job.

14:47 And I've been I've done that. So I thought about like What is like a rubric I can come up with? And I came up with a thing I call Block. F Is is is that when the founder pitches you get the sense they're first principle in thinking.

14:59 Or they're just derivative in thinking. L is are they lovable? Like and the question I ask myself is If I were twenty seven graduating from Sloan, would I Walk over broken glass to work for this CEO.

15:12 Which I think is a pretty good question. Were you lovable? I don't know, you tell me you work for me. When I talk to people who used to work for you, They described you I think as material, where they're like you could be um

15:23 Like really happy, but I but I only know you as a nice like a We only have cordial relationshi uh very cordial relationship. They would say when he was angry. He would get

15:34 Really, really angry. Very true. I was up and down. And it reflected my mood. My mood was up and down. And I had a hard time Kind of. Hiding it.

15:44 Um And I had I had great passion. That passion really showed In an aggressive way. Uh.

15:53 And I was definitely like Darmesh was the teddy bear. I was sort of the the bad cop a little bit. Like I was definitely tougher than Darmesh. And I think that yin and yang kind of work for us. Um But Lovables One. And by the way, these these criteria I don't match a hundred percent to all of them.

16:07 Oh, is obsessed. Like I like founders who have been thinking about the damn problem for a long time. And then they finally start the company and they are just obsessed with compulsively. And I like to see a founder that was obsessed with something earlier in their life. Maybe it was They're the world's best You know.

16:24 North East New England, you know. Ping pong player, whatever it would be. Something where they had to go very, very deep down a rabbit hole and get very good at something. I think that's good quality. I like the chip on the shoulder. I had a bit of a chip on my shoulder. I think Darmesh did too. Um and I like founders who have a chip. Like if it's an Epo baby, um

16:44 Kind of skeptical whether they're gonna stick through the ups and downs. And then are they deeply knowledgeable? Do they ha do they have you know, founder market fit. Do they know everything about this industry or are they kind of a tourist in the industry? So that I call it flock. And if you have all those money Talent.

16:59 Partners, customers will kind of flock to you. And nobody's a ten out of ten on all of them, but that's kind of my rubric I use. Today's episode is brought to you by HubSpot. Did you know that most businesses only use 20% of their data? That's like reading a book but then tearing out four fifths of the pages. Point is you miss a lot. And unless you're using HubSpot, the customer platform that gives you access to the data you need to grow your business. The insights that are trapped in emails, call logs, transcripts, all that unstructured data makes all the difference because when you know more, you grow more. And so if you want to read the whole book, instead of just reading part of it. Visit hubspot.com.

17:33 If you were uh young and getting after it at a new company, your twenty s you're this twenty six year old uh Flock. What What interests you right now, based off everything you're seeing?

17:46 I I one of the things I'm seeing in Sequoia is like you know the the hardware companies are kinda sat The model companies are kinda set. All that infrastructure layer set. At the app level is really starting is now starting to really Fly. You know, cursor's the really obvious one.

18:02 But like Harvey and Legal. Rogo for investment banking. Like every kind of job now has an app company that's doing pretty well. And so I think that's the area I would be interested in I'm a kind of an app guy. I don't really like infrastructure software that much. I don't exciting

18:21 But I like software that people use and can change their lives, improve organizations. I think that's where I would live. I like this company Rogo, which is like think chat GPT, but for an investment banker. It is doing very well. I like Harvey. Which is like lawyers.

18:36 I like profound, which is It's AEO like instead of SEO, how do you get found in these search engines? I like Delphi. I built a clone on Delphi and I think people are gonna have clones, more and more clones. Like what I really want as a as a consumer, it's not here yet, and I I'm waiting for it. It's like I built this clone. People can talk to my clone all they want.

18:57 It's pretty good. It's getting better every day. I want that cl I want to train that clone not just on what's out there on the internet with me, but train it on my email and my Slack and like Oh my Calls and

19:09 I wanted you to train to really know a lot about me. And instead of sending a listener to a meeting, I send my clone to a meeting that listens. And you know the first six months it just listens. But then people can start to ask my clone a question, Hey, Brian, what do you think about this? And primal answer. And then eventually it's just like I don't need to go to that meeting. I'm gonna send my clone to that meeting and

19:29 You know, I have a lot of meetings every week. I don't really have time for more meetings. It's just like Send the clone out. Um I think that's the future of office work and for some reason I don't see anyone really doing that. I want the opposite of that. I don't want a clone of me. I want

19:42 uh the better version of me to do all the work. Or like, you know, I don't want another mediocre me. I want uh the best version of me to be to be answering all the emails. I asked my clone questions And it answers them much better than I would. Cause it's sitting on top of Chat GPT. It's sitting on top of all kinds of knowledge. It's very, very smart already. And as the models underneath get much better and as more content goes in there. It's gonna be very, very smart.

20:10 Um Of course you're still gonna have your Copile. Like I think of Chat G B T and now I use Gemini mostly. As like a even better co worker than a lot of my co workers. So you definitely have that. But

20:21 I think knowledge work is going to change. And I think my vision of the future, I don't know if it's five years out, I think something like that happens. Can you tell me how you're using Gemini right now on a daily basis? The the weird thing is I've I've been using ChatGPT for so long. It really knows me. It knows everything about me, all my health stuff, like all the projects I'm working on, like Everything. And so

20:43 It's tricky for me because I trained it so much, but Man, Gemini is so much better than I'm starting to use Gemini. Kind of irritating. And I'm gonna have to train it on myself. But the thing I use that I really like are the project's functionality. So for example On my pod I have all these different guests.

21:03 And You know, I have the CO of Goldman Sachs coming on, like Give me a bio of the CO Goldman Sachs. Listen to all my podcasts I've done already. Create me a list of twenty good questions or topics to ask him.

21:15 And then kinda go back and forth on it. I do that for every pod? Super, super, super useful. Use case. I I went to function health and I got all my blood work. I got upsol, I got like They took like gallons of blood out of me, but I go everything about it.

21:29 Uploaded all that. Collaborated on that. Um stuff like that. It's incredibly. These days. I just I just come I think you know I just came out with a new book, uh my Marking Less than the Grateful Dead.

21:41 We created a very, very cool uh set of videos around it that are AI generated. They're super, super cool. uh that I like a lot. So I've been busy with it and uh it's given me a massive productivity boost. I feel like there's two of me already. I find it to be very helpful as like a like a daily coach and a therapist of like how should I react or how should I why do I feel this way about this particular particular situation. But when it comes to creative stuff, I find it to be A helper, but it's it it's not even close to being hands off.

22:12 But think about it like Two years ago it was Fifty. And the year ago it was Sixty five and now it's eighty, like

22:21 Keep drawing that curve like Two years from now it's gonna be really much, much better than it is today. Yeah, and it makes me think that I'm not gonna be investing in an entrepreneur anymore. I'm gonna be investing in a machine that Can just do all this stuff. Like I do think I think Sam Alman said he's like if open AI isn't the first company that has an AI as the CEO, then I'd be pretty upset.

22:42 And I do think that that's sort of gonna happen. I think that the haves and the haves nots have nots in terms of money is gonna like separate further. And I asked Darmesh when he came on because Darmesh, you know, is heavily involved with um or he's an investor of of Open AI and and is a deep on this stuff, I was like, How's this gonna turn out? And he was like, It's probably not gonna be as good or bad as you think. Uh and I was like, Okay, that makes me feel better, but I don't know if I I don't know if I believe his assessment yet, even though he's probably the person I know best to has the the best judgment on this topic.

23:13 I kinda think the way it plays out is people who are very high agency Motivated. It unleash their creativity and potential. People who aren't Might be unemployed. Are you happy that you've made it already?

23:27 No, I think if I were twenty six and an entrepreneur I'd Make it again. Yeah. This is a very good time to be an entrepreneur and like an outstanding it's like never been a better time. Never been a better time The history of of Homo sapiens to start a company might be. Yeah, I think I agree. Dude, some of these young kids though seem crazy. Like I don't remember when I was in San Francisco back in um twelve.

23:51 It was it was a much calmer environment than what it seems like now. Do you think that's an accurate assessment? Yes. Everyone's here is on fire. I think that's gonna make a lot of unhappy people.

24:01 I think it I think that's a bubble and every time there's a bubble, like tourist entrepreneurs come in. They're all coming into San Francisco, which kinda bums me out. And it kinda makes sense because Google's there and OpenAI is here and they're anthropic and they're right downtown. But man, are people moving in? And there's a lot of tourists in there. Similar happened in two thousand one, similar to what happened in the late nineties. And

24:21 I think it's peak bubble. I don't know why it pops. Pops at some point. A lot of those tours just get washed out. So my my advice to entrepreneurs is like if it's a bubble, what you sh what should you do? I'm not sure maximizing valuation is the right call, but let's say you wanna do that'cause you like the headline. I almost every entrepreneur, even starting series A, is taking money off the table. They're selling some of their own shares, which is way earlier than it used to happen and selling a lot. What's the definition of a law? You know a typical if the series B company is ripping, they're taking off five, ten million bucks.

24:53 And then I would just raise more. Like you look at two thousand one, lots of good companies raised and then it crashed and like not many companies made it out of that valley of death. I think you should raise a lot so you can kinda make it through like Yeah, he's gonna go like this and then go down and keep going. Another profile of entrepreneurs a lot of. Yeah. That I hadn't seen before. I call him like a five tool CEO.

25:14 Where they think code They have taste. They can sell, they can fundraise, they can recruit. They're like A kind of perfect entrepreneur. So like Brett Taylor is one of those

25:28 Um there's a bunch of them out there. Um the rogue CEO I just mentioned, the Delphi CEO. That's kind of a new breed we never saw. Like before you saw a lot of Darmesh in me. Um like The extrovert and the introvert, like the yin and the yang. Now you're seeing I see a lot more of these like superheroes showing up.

25:46 I don't understand like I've met some of these guys and this guy Brett Taylor in particular. I don't know him, but I would love to have him on Like when I when I hear someone like him talk I just think how on earth can one person be so smart and so good at so many different things? I totally agree. I totally agree with you. Whatever I s like uh whenever I see Shaq and like you know, like a five ten late or a five four lady, I'm like, How are these how are these both humans? Yeah. That's what I feel about when I see when I hear Brett Taylor talk in me, I'm like, how are we like made up of mostly the same stuff?

26:19 Yeah, there's a bun a bunch of the early stage COs are like that. They're charismatic. They can sell, they can recruit, they can pitch. Man, they can code and they have taste like It's an impressive new breed that's showing up. I've I just got done reading this like sales book on how to run a sales team and the intro was talking about how it was your hub spot's first, um

26:39 First head of head of sales. Mark. Uh Yeah, and then I read another one and it was like I was HubSpot's first SEO person. And there's like four more like that. And it seems like your first fifty employees are now like pretty big ballers doing their own thing or are uh uh a uh

26:56 Experts um and people look up to him. What do you think made you so good at Recruiting. And how did you do it? I think in the early we were very first principled.

27:07 So we were like marketing is totally broken. Outbound's dead. No one's listening to any of these ads or any of these cold calls or any emails. You have to do inbound. And so we had a contrarian view. Most people thought we were wrong, but enough people thought we were right. And we had a mission. The mission was to apply that idea. And lots of people grew up in a small business family. And wanna help small business to grow. It's a mission you can kinda get behind.

27:31 Helping millions of small businesses grow better. I think that helps. Early we We just sucked out of MIT. Like we were s two sloney's that started the company. So like our first ten employees, eight of the first ten were classmates of ours, we sucked over. uh about how Mark Roberts was our TA, actually the guy who wrote the book you were talking about.

27:53 And then we worked on culture. We had a unique culture. We thought of our our product as like you gotta make a unique product relative to competition. You gotta make a quality product. If you do that. It pulls customers in. or culture like you need to make a unique culture. And you need to make a high quality culture. And if you do that, you pull and retain employees. So we were You know, we were kind of

28:12 First principles along a f along a few different lenses. We also kinda zig where the world was zagging. The world said you gotta go to Enterprise. You know, that's where all the money is. We said, No. We're gonna do S and B. Yeah, we're gonna rethink this, we're gonna make the model work at S and B, even though everyone thinks we're wrong. We and then

28:29 We said we're gonna go after Salesforce dot com. When Salesforce.com was like unassailable. Everyone's like Are you crazy? You'll never beat'em. We weren't after them. So there's a bunch of points in up spot histories. Where we kinda zig one everyone else.

28:43 You know PR TL is a line like you need to be right about something. It'll that a lot of people disagree with. You need to be right about something that everyone thinks you're wrong about. And we had a couple of those. Not a lot, but we had a couple of important ones. Did you almost cave at the consensus?

29:00 No. We had we had a real conviction on the S B thing. It cost us like we would we would raise we would go raise our rounds I was walking down Sand Hill Road. We had n all nose. Like we had n we never had the only easier round was the IPO rounds. Um

29:17 Nobody liked the thesis. Nobody bought the S B thesis. No one else had done it other than Intuit. And we were we were convicted of that. I think part of the reason we were convicted is both of us had spent Yeah. selling to enterprise CIOs and it's kind of soul crushing work selling to enterprise C C IOs.

29:34 It was like let's do something a little bit more fulfilling, something that can get us energized in the morning and helping these small businesses grow better. The Salesforce thing, we got a lot of pushback on that, but We didn't feel like we had a choice, you know, Salesforce was our Really good ally. And our pitch was, you know, Salesforce.com was SFA for sales and Hutbot was for marketing for a long time. That worked.

29:55 And then Salesforce.com one day woke up and says, We wanna be the Salesforce.com marketing. And so we were like either we need to pivot Kind of come after them. Or eventually just gonna get crushed and pushed out and sold private equity.

30:08 I'm trying to become um a better CEO and I know that you guide a lot of CEOs um at Sequoia. What? Did you do at HubSpot? That you think As a CEO that you think was wrong and you advise people to avoid or attributes to change of uh of themselves.

30:29 One of the things that I think really work that's actually underrated is Paul Graham's founder mode. Article. And I remember reading that article. In thinking That was what I did early. Those were my instincts.

30:44 And I kinda got talked out of a lot of it over time. And the guy who I Think has it right is is like I you know, back in my day it was Jack Walsh, now it's Jessive Wong. And Jensen does this get sixty direct reports. He's tough like I was and he gives public and private

31:01 Um Feedback. Yeah, he doesn't get private feedback, all the all the feedback positive, negatives and in in And then he does a new one on ones. And like I did all of that early in HubSpot and sort of got talked out of them like No Brian. Mature CEO does a one on one with each manager.

31:18 Every week. No no no, Brian, you need eight. staff meeting with just your direct reports, you should only have Nine direct reports. No, no, Brian, you should You should

31:28 Phrase publicly and criticized privately. So as time went on, I got worn down on that stuff. And then I watch what Jensen's doing today and I read the found remote stuff. I'm like, I should have stuck with my convictions on some of that stuff. I regret. Kind of. I kinda manager I got more manager mode as time went on. I regret that. Of the manager mode.

31:48 stuff, what do you think actually works? I mean we did s we find it we got our We got our shit together on planning. Like we were very shoot from the hip for many, many years. And we got a really good

32:01 Planning. Process down, which is very manager mode. Um, we did bring in some execs from the outside that were very, very good and really up leveled us. Um we probably did too much of that. And I think a mistake a lot of founders make. is they go and hire that whatever CMO from

32:23 Microsoft, whatever. And they're really proud of it. They do a press release and we're excited. We have this amazing CMO, but the CMO gets in the company are like Where's my secretary? Where's my coffee? Where's reports? Where's all my stuff? And they're washed in C In this startup.

32:40 And they're miserable. And their colleagues are miserable. So I see that as a big failure condition, particularly higher And people from much, much bigger companies. I think people underestimate how good their home grown town is. And it's like the Red Sox. Like I'm a big Red Sox guy guy. The Red Sox dramatically overvalue players and other teams relative to their own talent. And I think every baseball and sports team does this and every CEO does this.

33:02 So there's this uh I I I I Intimately and Deeply remember this one phase when we were selling to you guys. Basically it was uh you know, my company was only like thirty people. So it was basically just me doing the deal. And I didn't have like an HR team or anything like that. And they and

33:18 HubSpot had like five or six employees, of which one of them is now like on the board of Asana. So these big shots. And then you guys had like seven or eight like lawyers who are probably making two grand an hour. And then you had seven or eight KPMG accountants. And they're asking me all these questions. And they asked two questions that I like. It was laughable. The first question, they were like asking for like invoices or no, what were they asking for? They're asking if I um They're like, What's this fifty dollar charge? And I was like I had some guy on Fiverr.

33:44 do like a logo or something. And they're like, Did he sign an NDA? I'm like Dude, his name was like big baller boy sixty nine on Fiverr. Like I I didn't get I'm sorry, I just I I don't know. And then the second thing they were like What's your like five year plan? Like do you have like projections I'm like

34:02 You guys, my company's like four years old. You know, like The projections, like we do it quarterly by quarterly, but like shit changes. And they were pretty cool, where they were like, Okay, we understand. Like we're you know, they're treating this like uh you know, like thirty million dollar deal, like it was a three three billion dollar deal, which uh is understandable. It was a weird deal though. Like we bought a content company. It's kind of a weird acquisition we did. And

34:25 I think when it came up, everyone was like, What are we doing here? Mm. And they were trying to like, you know, make sure that they're doing their diligence and stuff, but I remember thinking like I don't plan that far out. I'm so sorry. Like I don't even know if the company's gonna exist in two years, let alone like what the financials are going to be. W uh and that was like pretty funny. And it like it rattled the'cause the people I was talking to were just uh hires. Like they had never like founded a company. And it like I remember it it like kinda rattled them that I didn't plan. And I was like How do you guys not understand that? And there was this of like a huge distinction between me just being still in entrepreneur mode and them being in like

35:02 I'm only used to um the little bit more corporate setting. And I thought that was funny. I think people get too corporate too early. I think startups have nothing to lose. Nothing.

35:13 There's literally no assets, no revenue, nothing to lose. And as they get bigger, they have more to lose. And the lawyers get more involved because they want to, you know, cross the T's and dot the I'm. I think startups They grow up too fast. The lawyers get too much power too fast. And I think people think okay, we hit a billion in market cap. We have a lot to lose.

35:33 I think the mindset should be like, How do we get to a hundred billion? Um and how do we how do we Continue that risk seeking appetite. The other thing that gets messed up in these scale ups. Most companies break it one in fifty, hundred and fifty employees.

35:47 And that Dunbar's number And all kinds of shit goes wrong there. Um The director layer shows up. So there's like one more layer between the CEO and the customer. That kind of messes stuff up. The people joining are a little more mercenary and a little less

36:02 Missionary Your whole value prop you're giving to an employee You're attracting someone who's sort of risk averse at one fifty versus fifteen someone who's really risk seeking. And that just bleeds into the whole company. And at certain points it's like

36:20 Only the founders are the people who are risk seeking. And That That protect what we have versus go get something new. Is interesting.

36:29 And what is happening in Silicon Valley that I think's interesting. Is more and the CO Rippling's doing this very aggressively. More and more CEOs are hiring You know, failed founders. Like or doing Very cheap aqua hires. And

36:42 Kind of seeing their whole company with founders. Like Frick's got over a hundred Ex founders on their team. And I think that's good. That keep that keeps you like focused on the long haul and risk seeking. You gotta keep the risk seeking up. for a long, long period of time. This is for the folks out there who have a business that does at least three million dollars a year in revenue. Because around this point, that's when you're able to look up after being heads down for years building your company.

37:06 And you realize two things. One, you've done something great. But you're still a long way from your final destination. And two, you look around and you realize I am all alone. I've outrun my peers.

37:17 Which means you're now making ten million dollar decisions alone by yourself. And that is when mediocrity can creep in. My company Hampton, we solved this problem by giving a room of vetted peers of other entrepreneurs. who are gonna hold you accountable Call you out on your nonsense and help show you the way. Because the fact is is that there's only a tiny number of people in your town who know what you're going through and who have been there.

37:40 And they're hard to find. The biggest risk is not failing. You have a company and it's working. You're gonna be fine, but the biggest risk is waking up ten years from now and saying, Shit. I barely grew in business and in life. And for people like you who are ambitious, wasted potential and regret is what we want to help you to avoid.

37:59 We have made so many of these groups and we have a thousand plus members and I know this stuff actually works. It can change your life. It changed mine and I know it will change yours. So check it out. joinhampton.com You're so fascinating to me because you've one of the very few people on earth who's built a company to be worth tens of billions of dollars. And yet you're this grateful dead loving hippie and you're telling people don't grow up too fast, don't be too corporate. But uh you're you're you're you're an onion man. There's layers. That's why I I think it's I I think you're fascinating. Let's talk about let's let's talk about Jerry Garcia for a second. He's like the not the first, but one of the first. In the in the very class

38:39 Silicon Valley entrepreneur. The comp do you know where the company was founded? Uh yeah, I uh well I in the h the house across the street from Bed and Jerry's uh hate Ashbury, right? It was founded in Palo Alto. Oh interesting. It like right down the street from Stanford. And the first concert was in a pizza place. Right in Palo Alto.

39:00 Um and so it's like a c he's a classic Silicon Valley. Found like First principles. Completely first principle everything. He didn't care what anyone thought. He was like This is the way we're going to go.

39:13 What way did he say to go? For example, Uh Mm. Uh uh.

39:19 At the time, rock and roll was new. And there were lots of rock and roll bands at the time. And there were jazz bands, there were country bands. When he built his team Team was very spiky, very con Silicon Valley spiky. In his His bass player was actually a an avant garde trumpet player that learned the bass.

39:37 Uh his keyboard player was actually a blues harmonica guy. His dad was the blues DJ in town. His main singer was the country critter, and his drummer. was like a drum majorette. So he brought together this very spiky team. And instead of creating rock and roll, he created a whole new genre. Called Jam Band. And Fish and so many other bands copy them.

39:58 And so Hubswart did the same thing. Yeah, we said this outbound thing is dead. We're gonna create this genre called inbound marketing. So very first principle the way he thought. The other thing he did that was super clever beyond the music Was

40:13 His marketing. So do you go to go To a Rolling Stones concert, let's say in nineteen Mm. You bring in all your equipment to the concert, your big camera, your microphone, whatever, you go to walk in the concert.

40:26 Get out of here with all your equipment. This is our IT. This is Rolling Stones on us. Get out. The Grateful Dead. If an idiot like me showed up his camera and all his recording quiz boom mic Brain, come on in. So right here up in the front, we've got a taper section for you.

40:40 And so people like me would go to Boston, Hartford, New York. Philly, D C and record all the concerts. We get back home. We have the tip to teep thing. And the best concert we're make fifty copies of. And then would trade we weren't allowed to sell the tape. So it wasn't part of the calls where you trade the best tapes with all your friends to pick up.

40:58 Pick up their best stuff and my best stuff. I told you I used to share an office with Nuggs dot net, the marketplace where they would trade the tapes. Right. Amen. You'd be at a f you'd be at a like a party on campus and somebody put your bootleg you put your bootleg on. In the person makes you be like why everyone's dancing this crazy gypsy What is this weird gypsy music grateful dead?

41:20 They're coming they're coming in town. Come on tour with us. And so the grateful they were the first Silicon Valley viral. Inbound marketers. Yeah.

41:30 So he was very first principal about his music and his marketing. There's a lot more stuff about his marketing than I think is very interesting. She uh I mean I've been to my parents were deadheads and they uh traveled with them like you know, show to show I'm I'm I'm just Googling while you're talking. How old you said you're fifty eight?

41:46 Yep. I was a I'm a very young deadhead. Dude, this guy looks uh like thirty years older than you, but he died when he was only fifty two or fifty three. Oh, Garcia, yeah. Yeah. Yeah. He's not like the Silicon Valley people like Brian Johnson, uh Peter uh Andrew Huberman fan. He he

42:04 His his major food groups were Twinkies, Twinkies and Twinkies. Yeah, he looks like he parties. What's the name of the book? Called Marketing Lessons from the Grateful Dead. Buy it and triplicate. You gotta buy that for your parents. Did you get to meet them when you were writing it?

42:18 I met Bob Weir, yes. And we we told I told Bob we were like, Here's what we're doing. He's like huh. I was wondering if anyone would ever write about that. That's pretty cool. He was like his reaction was like huh. If you Google I think if you Google your name in Grateful Dead, like one of the first things that comes up is that you bought uh, you know, his guitar at an auction. Yep.

42:38 I have Jerry myself the steward of his guitar. It's very unique guitar. And yeah, I own it. And I let it out like John Mayer played it, like everybody and their brothers. Anyone who wants to borrow it can borrow it. Um Uh but yeah, I I en I enjoy being the steward of of a little piece of Jericho Garcia. I love talking to you because um I just think that like I think that like the world needs more

43:02 People who have this perfect balance of being like a shark and hard hitting. But also like Polite and kind. And I aspire to be like that. And I think that uh when I think of like all the people who I you know admire, you're it's kinda like Me and Brian Halligan's kinda like where I wanna go, but in a handful of years. So I uh I love talking to you. I hope we can do it in in person next time.

43:25 Appreciate you, my friend. I love I wanna be like you when I grow up. Yeah. Alright, God bless. Thank you. But I want to I put my law in it like my day's off. On the road, less travel, never looking back. Alright, everyone, if you're listening to MFM, you probably want to make more money. Well, I want to tell you about a podcast you might want to check out. It's called The Sales Evangelist, and it's hosted by Donald Kelly.

43:54 Each week, Donald interviews the world's best sales experts who share their strategies to succeed in sales. They share actionable insights and stories that will encourage, challenge, and motivate you to hustle your way to the top. If you're someone looking to raise your income level, check out the sales evangelist. You can find it wherever you get your podcasts.

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