Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO)

Transcript from https://podmenti.com/t/c1422ddf739ea0c2

Some of the best startup advice I've heard is startups should focus on one thing and be really, really exceptionally world class at that one thing. And one of our early zigs is we are going to do exactly the opposite of that. You have no direct reports, and I don't believe you've ever had direct reports at Hobspot.
I could become passively okay at management with some training, with some coaching. I don't want to spend N years of my life becoming passively okay at something. What was that process like to define the culture? My co-founder and I were having one of our founders' meetings and he said, Oh, Darmesh, I hear this culture thing is really important. By the way, can you go do that? I'm like, Okay.
Right. Well all the people and all me is like I am like the worst possible person. It's not that I don't like people, I just don't like being around them a whole lot. Something that's really unique and interesting about you is you're obsessed with comedy and keynote prep. It comes down to this metric that stand up comedians use called LPM laughs per minute. I have custom software that I've written that will say, Okay, here are the points at which the audience
Laugh.

Today my guest is Darmesh Shaw.
Darmesh is the co-founder and CTO of HubSpot, and also one of the most fascinating and first principled thinkers I've ever met.
In our conversation, we cover a lot of ground.
Darmesh's hilarious and ingenious approach to putting together a talk.
Including measuring laughs per minute.
His biggest lessons from being a public company exec for over ten years now, especially while being a startup guy at heart.
How he approached creating and scaling the culture of HopSpot, which you'll find both hilarious and inspiring.
Why founders and product teams are all fighting the second law of thermodynamics, at a zig while everyone else is zagging, how and why Darmesh leans into his strengths, including never having a single direct report during his 18 years of running HubSpot.
And so much more, this episode is so fun and will expand your mind in many ways.
With that, I bring you Darmesh Shaw after a short word from our sponsors.
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Darmesh, thank you so much for being here and welcome to the podcast.
Thanks for having me, Lenny. It's an honor. It's my honor, and thank you for joining me.
You are a wildly fascinating human.
And so I thought it'd be fun to start with just a bunch of fun facts that I found about you online.
And what I'm thinking is I'll just walk through them. Tell me if they're true as I walk through them, and then this is gonna lead to a bunch of different topics that I wanna talk about. How does that sound?
Sounds great.
Okay, here we go. So one, you have no direct reports and I don't believe you've ever ever had direct reports.
At HubSpot.
That is correct. Seven thousand plus employees, exactly zero direct direct reports from time T equals zero.
Okay. We're gonna talk about that.
Uh, you also don't do one on one meetings as a result. You don't have reports to have one on one meetings with.
That's correct.
You build many side projects at Wallet Hub Spot.

product called WordPlay?
Which
At one point made ninety thousand dollars per month and had sixteen million users.
That is correct.
You also bought chat.com
For ten million dollars.
And then you sold it two months later for for more money than you bought it for.
It was actually fifteen plus million dollars, but
I I had kinda stated eight figures, but I'm not going to do it.
Yes. Ooh, is this is this breaking news?
It's breaking news. Wow. So that's how much you bought it for?
Yes. Okay, and you sold it still for an undisclosed amount, is that right? Undisclosed amount and yeah, and more than that, obviously.
Yeah, there's a profit and I knew he gave some money to charity and there's some
promises you made where people commented on your LinkedIn post and you gave more money away. So it was awesome.
Okay. Also you're a billionaire?
Yeah.
Is once again true. Still true.
Great.
Uh also you were born in a village in India that had no paved streets, no traffic lights, no hospitals.
That is correct.
Okay.
Before Hot you found it.
Two companies, but I think the the more important factor is you promised your wife you would not start
Another company before you started HubSpot and then you ended up and went on and started HubSpot.
Yes, I had promised her that I would not do Star I had come.
Hang up the proverbials.
Entrepreneurial hat. Um
Best lead plans and all that. I met my co founder in grad school, which is that was the the plan.
Mm. Oh, I'll go back to grad school and go find myself and then the plan was to go um eventually teach, uh not do another startup, but
I met my co founder there and
One thing led to another, as he says that. I hope she's forgiven you.
I do think.
Ha
Okay, final fact. Uh so uh
Kip is that how you pronounce the name Kip your CMO?
Mm-hmm. Okay, great.
So he
I asked him what to ask you, and he tells me something that's really
unique and interesting about you is you're obsessed with copyrighting.
And comedy and keynote prep.
That you have a very unique approach to preparing for a talk.
And how you think about humor and slide design and story art.
That's very true. This is the um
Public speaking is uh not something that comes naturally to me. So we're gonna start there. We can talk a little bit about the copywriting other things, they're sort of related.
Um and when one of the
And and I try to not do things that I'm not good at and don't enjoy. Um
One of the rare exceptions that has snuck through
is the need for me to get on stages as founder when we have our annual
HubSpot event or conference. Um
Which at the time
Uh, when we did our first one it was like a hundred and fifty people at the Marriott, right? And and then it's like steadily grown since then. And so now it'll be like ten thousand people in the live audience and
Hundreds of thousands. Um
Online, right? So
But
As I kinda came to this realization that
I was not gonna be able to kinda talk my way out of it, um, and I kinda saw how where this was headed, I'm like, Okay
This is something I'm gonna have to actually like learn because I can't delegate it, can't
Talk my way out of it.
And so I'm a big believer in
In this uh
Like talent versus skill, right? So we all understand talent. It's like someone has a talent for music, someone has a talent for athletics, whatever it happens to be.
And that's true.
Exists.
But the way I think about it is talent basically controls the slope of the curve, but most things are actually acquirable skills.
So for instance, if you have a talent for music, let's say
Uh, you might learn music faster uh than someone else, and your ceiling may be higher, but does not mean
that other people can't learn music, right? It's like a acquireble skill. That's kinda
Uh lesson number one.
And lesson number two is that um there is a
process and this is uh this is the engineer in me.
uh just kind of functional decomposition of a problem to say, okay.
In order for me to be a
Pretty good public speaker.
Like what are the underlying sub skills required or to accomplish that? Okay, skill number one, you have to be able to s stand up on stage and not pass out. Um
Like yeah, that's kind of the bare minimum, right?
And so what I did over the years is to say, Okay, I'm gonna functionally decompose this skill of public speaking in front of
You know, in what I call like high stakes speaking.
I've gotta like actually hold the audience's attention. That's part of a success. So it doesn't matter what the message is, doesn't like nothing else will matter if I lose their attention, which is increasingly easy to do now. Uh in kind of short
Attention man society.
And every year I will pick a different part of the public speaking skill set and say, Oh, I wanna learn about slide design and and visual expression, not the actual design. I'm not a designer.
Uh, but then the one thing that I came up that has had the most impact is humor.
Then you break that skill down just like an engineer would do. It's like okay, well there's humor writing.
There's humor execution, like on stage, whatever, there's stand up comedy. There's like okay, so like how do you put all these pieces together?
And along that journey I came up with this and I've always had this. I'm a very uh kind of data driven
uh coin based person. Um
It's like Okay well
How will I know?
whether something is like actually funny enough or not, or whether I'm losing the the attention or not. Um and so
In preparation for one of these kind of high stakes uh keynotes that I do every year, um
I will have you know, I'll have my talk. I will do practice runs.
I will have increasingly larger
actual live audiences that I will practice it in front of.
I will record those talks.
Everything so far.
Nothing unusual yet.
Mm-hmm.
I will have the talks transcribed.
I have custom software that I've written that will say okay, here are the points at which the audience laughed.
Like actually audibly laugh. That's the only re only way it counts.
And this actually uh and it comes down to this metric that stand up comedians use called LPM laughs per minute.
And there's actually a benchmark that you can say, Oh, well, damn you.
And
Stand up comedians have a very, very high LPM. Business talks have a very, very low LPM.
Like the most popular TED talks, there's a high, strong correlation between the most popular TED talks and high LPM. So I have a goal I'm looking I'm gonna have a minimum, I wanna improve, and so I have
Software that will calculate
Alas permitted.
And so then you learn these little kinda tools so that
tricks of the tracks. So like okay, if you're solving literally for that ratio of last per minute.
Um, there are two ways to improve it.
One.
Is to add more laughs.
Two is to decrease the number of words between lasts.
Right. So it's like so when I one of the things the software measures, it gives me a visual map.
It's like here's the entire talk broken down with a little square per uh minute of talk or thirty seconds.
And it's like here's where they laugh. It's like oh here I went one minute and seventeen seconds and nobody laughed.
So I have to do one of two things, shorten that segment if there's nothing funny that can be said uh without being over over overt about it.
Or I have to say, Okay, I'm gonna find something funny to try to inject into this and kinda break it up. Anyway.
And that's a long way of saying if if I can get up on a public stage uh and learn that particular skill, anyone can learn just about anything. It just comes down to
uh practice and measurement, um and and just getting incrementally better over time. That's uh
Wow. I feel like I've just learned so much about you and how you think just from that question.
And how you approach this problem.
On this humor piece, I'm curious, any lessons to share on how to be
Funny.
So one of the kind of tricks of the trade in humor, and you learn this um particularly in standup comedy, but just any comedy.
And I just hadn't thought of it this way. Um
is that and this is very tactical, but it works and it's a very easy thing to apply. So let's say you're looking at an
Most of us in a in the uh
Yeah, we're not stand up comedians. We're not gonna tell jokes in the classic sense, right? And even stand up comedians don't tell jokes, right? Like they they actually have stories and they happen to have
Uh Punchliner uh Punchliner two.
So that uh two tactical pieces of advice. One is
When you're telling the story, whatever the funny bit is
Those have to literally be the last words of that particular segment.
Right. So once you deliver it.
Then you have to stop talking. And the reason you have to stop talking is
The audience needs about a half a second to react.
And then they want the permission to laugh.
And if you're continuing to say words
It's gonna make them feel awkward and it's gonna be less funny.
So even if like moving a phrase in the sentence that you're about to say is like
Well that sounds kinda weird to put those set of words
At the end of the thing.
Do it anyway, even though it's awkward because it will actually work better. That's kind of tip number one. Tip number two on LPM generally is that.
Um
Have a story such that you can s kind of spend the time setting up the story.
But then have multiple funny bits, multiple punchlines because you've already made the investment I've said
Seventy five words in order to kinda set up this context.
Sing something funny, that's amusing lifts or whatever.
Say some more things. You already have the content and you'll see the stand-up comedians do this all the time. And then say something else that's funny because you just because a laugh is a laugh. It doesn't really matter that it
It was still the same story.
So kinda leverage the the investment you've already made in establishing context and scene.
And then just squeeze more humor into the end of it, um in kind of punctuated fashion.
I feel like the entire podcast could just be this one thread, but I need to move on to other topics.
Uh one quick question. So you said
Ideal laps per minute is two to three ish.
Is that what you said? Uh yeah, two plus is hard uh for a business talk, right? Because
Damn comedians the reason they can do it. Um
Is
That's all they're really kind of solving for is LPM.
In business talks, you actually have another agenda other than just being entertaining, right? You actually have a message you're
Trying to promote something, promote an idea, promote a product. Um anyway.
Anything in my mind, uh for
For like
Most normal circumstances even if you can get above
Like a one point
Two, two five?
You're in the top decile, um, in terms of talk generally given uh by
Yeah, nonprofessionals. Wow, this is incredible. So after every talk, you will listen you you run this transcript and audio three program to see how you do.
Yes. And are you ever gonna publish and release this program?'Cause that sounds really cool.
I have this notion of what I call soloware. And soloware is exactly what it sounds like. It's software built for exactly one person. And in my case, that one person is me.
And so I've been doing this
Thing for like
thirty years right now. I just build things that I would
Myself find useful.
Uh and the nice thing about so one of the many nice things about it is that
Yeah, the UI is only for one person. Uh you don't have to do a whole lot of testing because it only needs to work for one person.
And the most important thing is that because it's only for one person, if it stops bringing utility
You can just turn it off.
You should stop using it. Versus if you have users, even ten users.
And you put it out there.
And then people would be disappointed if you took it down for whatever reason. Uh
That's kinda hard. So anyway.
So that's the power field I go through. It's like is this
Useful enough to enough people where it's worth the calories of kind of making it non solo wear, making it even microware. I haven't just made that up, but yeah.
So
Wow. Okay. Let's see how the YouTube comments react and how many people uh would want this and slash pay for it.
Let me go in a slightly different direction.
We talked about how you have no direct reports. You've never had any direct reports?
I know that's somewhat related to a piece of advice you often share, which is to lean into your strengths.
And to not do things that you're not amazing at.
So can you just talk about why this is the case? Why don't you have any reports and
And then this I think you're this idea of just like
Strengths and the importance of focusing on strengths.
Yeah. Um let me I'll tell I'll tell you the quick story um as to how this came about. Well, my co founder and I had the kind of founding meeting.
This is the like the week where
We've decided we're gonna do this, and then we have this list of questions.
uh or topics for the kind of founders discussion. Um
One of them, uh and I
This I've I think I've published the list. So these these are the questions all co founders should ask each other in that kind of uh early um early period.
One of the ones it's like, Okay, well, who's going to be CEO?
This was an easy one, uh, because I had been CEO twice before.
And had figured out I'm not that good at actually suck at that. Um, that's and and one of the reasons I suck at that is that part of the CEO role.
is being good at managing people. It's not just about leading and having a vision of whatever's you actually have to do, uh kind of the the management as a craft.
Yeah, and so that part I already had in my head. I think Brian, my co-founder, already had it in his head that we that that's how this converse that was a very quick conversation.
And in the moment, as soon as I had kind of had that win behind me, it's like okay, well I don't want to be CEO.
Brian wanted to be CEO because he'd never done it before. Like, Okay, that was easy.
And then I said, Oh, and by the way, um
I don't want to have any direct reports.
Just I just like popped into my head as an idea. Had not like preplanned it or anything.
I sprung it on him and I and the reason I select and
It's like okay, well and the reason is because
I have learned that I suck at management.
I'm a reasonably smart person. I think I could become passively okay at management.
With some training, with some coaching or whatever.
I don't wanna spend N years of my life becoming passively okay at something.
I would rather take those same calories
And take the things that I'm good at that I actually enjoy, those things are highly correlated. You tend to be
good at the things you enjoy you tend to enjoy the things you're good at. Um
It's like
So
And and Brian was like, Yeah, sure.
And then I'm like No Bright.
You don't understand'cause then I was like
There's going to be a time in the company with like oh our VP of engineering just quit like just be interim something or whatever and have this team report to you until we find like
We're gonna have those things.
And we're gonna have to promise me we're not gonna do that. We're gonna r it's like I am not going to have direct reports. And we have that kind of
Heart to heart conversation. Um
And it was one of the
Best decisions I've made made both for myself and for HubSpot. Had I not made that decision, I'm a startup guy.
I don't know that I would have survived at a company at HubSpot scale.
And right now I can honestly say I'm having a better time at HubSpot.
Now it's seven thousand people.
that I was having at seventy people. And the reason is
I get all the upside of scale, which is I can make big bets, we can have long term things and plans, whatever, and then plan for global domination.
Without the downsides of scale, which is oh
You're having to manage all these people, all the kind of mechanics. And that's hard, right? It's a hard skill to have. I appreciate other people that have it. Uh I don't.
And so I get all the upside with very little of the downside of scale. And that's what kind of keeps me engaged and energized and uh happy in a spot. So I think it's been both.
Uh productive for Hubspot and good for me.
I love that this is an example of how you can build a company the way that you want to build it. You don't have to do it the way everybody else has done.
I imagine there's a lot of challenges to this too, but
I think it's inspiring to just like, hey, I'm gonna design a company the way I want to build it.
Yeah, it's it's amazing what you can
get away with in terms of uh shaping the new universe to your liking. I think people automatically assume um that things have to go a certain way, sp especially founders, um and first time founders. It's like
Yeah.
Try it. It's like okay, well, I wanna do it. Well, first of all, I'll give you another kind of tactical example. Both my co-founder and I
are night people, not morning people.
That's
Just happens yeah, uh I didn't pick him because of that. We didn't yeah, learn that later.
And so we made it a dis like from the yeah, early days of UpSpot in the early years at least, uh, we're like
No meetings before eleven AM.
Hey.
Like that's that was it. Uh and then we adjusted it, uh I think maybe three or four years and we're like
All right. We can have meetings before eleven AM, you just can't invite one of the co founders to it.
Mm-hmm. You're welcome to meet amongst yourselves.
Uh if you choose to do so. Um but anyway. It's uh but yeah, it's little things. That's an amazing rule. I have a personal rule where I have no meetings before three PM.
Because I don't work anywhere, I can
more so create my schedule, but the idea is I create this
Deep work time in the beginnings of the day. I love that. Yeah.
Okay, so you talked about you're a startup guy.
At the same time.
UpSpot is approaching its ten years of being a public company.
And I think eighteen years since founding
I'm curious what
lessons you've taken from that experience being someone
That's clear startupy person.
Being exec at um
Very
fast growing and large company.
And I'm thinking from the perspective of a founder who's maybe thinking about starting a company or starting company, what
Advice you might have to share for them.
And also for people in uh in the exec world today.
A couple things.
Yeah, um
Since we are publicly traded now and this doesn't get talked about enough. I'm gonna go ahead and um get this out there and use this as a platform to get this message out.
Which is I think too many
founders, um you know, once they get to it they they are very apprehensive of going public and going
through the IPO process and being a publicly traded company because there they think
I mean that's like the beginning of the end. It's gonna like change everything and my life is the way to stop. And I think they're over indexing
on what they think it's like to be a publicly traded company. In my own personal experience, and and Brian, my co-founder, would attest to this, and yes, there's certainly a tax or things we have to do now as a publicly trade company that we didn't have to do.
as a privately traded company.
Uh but there are actually benefits. For instance, if you're kind of venture back in private, let's say
Uh, you're sorta at
A little bit the whim of the market and and how VCs perceive your category and all these things or whatever, and and and you get every now and then when you're outraising around capital
you sort of get mark to market, right? Like this. Now here's sort of what the valuation is based on what someone's willing to kind of fund the company at.
One of the nicest things and this is underappreciated.
Is that
We know.
Right now with the market values
HubSpot at. I can tell you that any business day of the week, right? Like that's um
And there's there's a nicen to that. And this is the other thing I I kinda tell
uh folks within the company is that
Yeah, the the valuation, uh, which is um
Yeah, we're in a relatively efficient market. Like the public stock market is a relatively efficient by the economic definition of the term, an efficient market.
And so but the so the valuation will oscillate around the value. So if you kind of focus on creating values, like here's what we're actually building.
Valuation will sometimes be higher than you deserve, sometimes will be lower than you deserve, but over the fullness of time
Those two things will kind of move in lots, right? That's been demonstrated. That's what happens. That's almost a definition of an efficient market, is that
uh information kinda moves centrically and then the valuation catches up with the actual actual value.
Uh but here's
The other kind of social reason why I think founders should go public.
Which is so you know, hub spots and I hadn't thought about this, so I'm not gonna
uh take credit for being this uh kind of generous magnanimous person.
Is that
In our first um pre-public years.
I think we were eight years old when we went public.
We had created roughly a billion dollars of market cap.
Give or take. We hadn't been a unicorn, so it was slightly below uh when we went public, so
I was that was never a uniform because yeah, that's privately cut
Privately held company over a billion.
In the subsequent years, we went from a billion in market cap to thirty billion, which is roughly what it is now.
That first billion of of market cap creation, a very small number of people got to participate in.
The
Rest of the twenty nine billion dollars in market cap.
Everyone.
Every public investor got a pr chance to participate in.
And so I like the idea of okay, well, you believe in your company. There's lots of people that believed in HubSpot. Um
It's nice to let them kinda participate. Uh our customers, our partners, our well wishers and they can sort of now have
the upside. And you don't get that in the private markets because it's a very closed uh yeah.
You can't just buy
Yeah, shares and
every uh private company you like. I wish uh that existed, but it doesn't. So it's it's the way to
Let the market at large participate in your growth. Um
earlier.
What about from the perspective of just staying
Excited.
And motivated and finding things to take on. Is there any lessons there for founders that are
I don't know, at a larger company and just
Okay, this is gonna help me stay excited about what I'm doing.
Yeah, I think um this is um and Bezos ex exemplifies this, I think, the best, which is um
Just because you're a public company.
Does not mandate that you
do certain things. All you all that's necessary.
is the kind of transparency that says, here's what the company is doing, here's what we're about, here's what we're solving. And he had this with his very first annual shareholders letter, which you know, he obviously writes uh every year.
Which is this is what Amazon is about. We're solving for the long firm or whatever and
And he didn't say this in a starky way, if you kinda reread the letter. It's like but
But if you read between the lines, it's like if you don't agree with this approach, you should not buy Amazon shares.
Right. It's like it's a completely optional thing. You don't have to buy it, but this is the way we're going to run the business. And he stayed true to that. And you can continue to do that. I'll I'll tell you one quick story. This is once again the uh
Uh
anti-dissuade uh founders that might be reluctant to go public. So uh one of the core values that HubSpot that's been part of the culture.
From the early, early, early, early days, uh literally days.
Is transparency.
And so one of our kind of mechanisms by which we implement transparency is is we've had this thing that says
All information within HubSpot.
is equally shared with everyone in the company.
Period.
Right? T like everything. So
our balance sheet with the we raise capital at
You know, whether you know, we're gonna be able to meet payroll in six weeks, all those things, everything was uh transparent.
All the time. And with two exceptions. One is if it was illegal for us to share, let's say if we were looking at some acquisition or whatever, and we had
uh non disclosure. Uh or
The information was ours, not completely ours to share. And one example of that was salaries. So we feel that salaries are
Co owned, uh
both by the company and by that individual, and it's not up to us to share someone's salary if they don't want to do that.
Okay.
All right, so uh so we had that transparency.
And then as we go public.
We have this meeting with our investment bankers and our lawyers. Uh this is
But
In the IPO prep process.
And they sit down and as part of this
All day meeting uh one of the questions is like okay so
So who are your designated insiders?
Mm-hmm.
Brian nor I had ever taken a company public before. We're like, We don't know what that is.
It's like oh w it's this kinda group of people that will have access to kinda all the financials and will know you know, it's like
And we're like, Oh, okay, so how long is that list?
And they're like, you know, five or six.
And so then you know Brian says seven.
S
And they're like, Yeah, you could you could do seven.
And then I say.
Eight?
Like
Can do eight.
And so what we're and so we discovered through that mathematical induction process, uh is like if it's a true for n is a true for n plus one.
Is that there's no actual legal limit to how many insiders
a company can have.
And so we ended up doing
Literally the day we went public is we designated every single employee
to be a designated insider.
So that allowed us to maintain the transparency thing because there was no rule
That said, you could only have five, six, ten
And it was hundreds of people and we did not make it optional. We didn't say oh because there are downsides to being an insider there's
Windows within which you can't trade.
There's stuff. But we're like, Okay, well we believe in transparency, everyone's going to have access to it and
And it's not an opt in kind of thing. You're like you're this is it. We're all there together. Um
And it's been all and we still do this to this day, right? Even at seven thousand people. Um
We're based insider, so
So we can still share all the financials with everyone all the time. You have many contrarian opinions is what I'm getting from this conversation already.
And the way you're pushing the envelope on.
Can we have ten? Can we have uh a thousand?
Um curious if there's anything else
They're just
Contrarian.
Ways of
running a company. I know there's probably many, but what comes to mind
So one of the phrases we like to use in in our industry overall is this kind of notion of first principles. Uh I don't know who popularizes it, but it's it's used a lot.
Uh I'm just I'm not usually a snarky b uh I'm not gonna say something snarky, but
I think
Most of the time first principles is used, um it's actually used incorrectly.
Because the way first principle is supposed to work, as Elon would probably describe it, is that
It's not first principles like first principles of what we believe. These are our core kind of first principles in the company.
It's the first principles of the universe.
It's not what you believe is true. It's what do we all collectively know to be true to the best of our knowledge. It's science, right? That's like physics.
Like the first and second law of thermodynamics, those are first principles.
All the layers on top of that are things that you think are true are your assumptions or the things decisions you made.
And that's fine. Like you may have made some decisions, like for instance, transparency is not a first principle.
It's a founding principle, right? It's not
Wait.
Everyone should do this. It's like a complete core thing.
And so
Yes, um
I can be
Uh
Contrarian.
But you have to kinda limit the
Dimensions so the number of things that you're contrarian on has to be greater than zero.
But not too high. Right. So you want uh what what I think of as like
Uh high conviction.
Low consensus bets.
Right. So high conviction is we really, really believe this.
And low consensus is that most other people don't. And the other people have kind of phrased this differently. I think Peter Thiel actually says it more uh simply and elegantly, which is.
You need to be right about something that other people think you're wrong about for a very long time, right? Like okay, th this is the thing that um and you just happen to be right.
So one of the early
kind of high conviction decisions we made, um at HubSpot.
was that we were gonna focus on SMB as our target market.
I'll make a case both for S M B and for
having a high conviction better doesn't have to be in a target market, but something
Once you make that bet, um
Because it's low consensus, it's going to be hard and necessary for you to have the conviction because
Everyone disagrees, including your board, including your investors, including potential investors.
So we have that for all literally all eighteen years of HubSpot's history.
We have always had the questi all during the IPO Roadshows like Yes, we get that you've kinda
On S B, but so so what's the path to the enterprise?
Like
No, you don't understand. This is not a go to market strategy. This is not like, oh, we're gonna conquer SMB first. This is not Bowling Pin. This is not Jeffrey Moore. This is a
We are here for SMB. This is that's what we're doing. Um
And so we maintain that conviction for a very long time. And that kind of
Helps you
Make other bets um that are secondary, but
But you don't want to reinvent everything. So I'll give you an example of something that we had in the early years of HubSpot that we kind of forwent.
So in the early years uh of HubSpot, we're like, Okay, we believe in a flat organization.
One of the manifestations of that flat organization is we had no title to the company.
Nobody had a title.
Right. So even though we like you have business cards, whatever, we have no titles.
You if you introduce yourself, um, you know, in a meeting
And we had this up to like hundreds of people. Um
When you introduce yourself like oh
I work in product, I work in engineering, well whatever, it's not like I'm director of X or V P of Y because that
Of the thing didn't exist.
Then as we scaled, uh, we came to the realization um that there's actual
uh value that people ascribe to titles. And the reason they ascribe value to titles is because
Uh there are rumors that there is life beyond HubSpot.
I
Couldn't believe it. What? There's there's a life out there outside of HubSpot. It's like yeah, but and then when we go to the Thanksgiving dinner or whatever, and I talk to my aunt.
I need some shorthands like oh yeah, like I got promoted to director. I got pro like you know, just show some progression because it's a signal device and
In this life beyond UpSpot and outside of UpSpot, it's like
Other people are also gonna want to know sort of where I was in the in the it's like okay.
And this was the winning argument. I love this argument.'Cause we had a
Day long meeting on talking about this one topic.
And the winning argument was
Demention Brian, I recognize why you uh why we don't have titles. I recognize this. And so they made the case of yeah, but there's you know value
And it's like
And by virtue of you not giving us titles
That means you're having to compensate us.
In a in a kinda economic sense in other ways, right? So
You're you're losing out because it's like is that value high enough
To not do that. Um
That's a strong case. It's like
And so
And then we had it down to three choices. We're like, Okay, well we could have chosen to just stay firm is like still no titles.
We could have said, Okay, we're gonna have classic titles.
Then I had the option on the table of
Make up your own title.
Like you can be Grand Pooba of X, and that can be your like
And
Then we ended up making the decision to go with classic titles because that actually served the need of there's a benchmark was a standard, otherwise it doesn't mean anything. So having made up titles.
is pretty much the equive of having no titles because they lack any any meaning. Anyway, um but

Okay. You sort of iterate, you change things as they go. Um yeah.
Yeah. I think there's so much to this. Let's just try things differently.
Okay, that didn't work. What's okay. We're fine. We're just gonna do what everyone else is doing here.
And then often you discover a thing that okay, this is actually better.
Just to understand, when people have no titles, so someone say as a product manager what
Like do you call him a product manager or just like I'm an employee Hop Spot I have no literally no title?
At the time we was a no title, and now we have classic titles. But back then it's like you're just here. No title.
Uh
I saw somewhere that you paid everyone
Five thousand dollars monthly as their salary at the beginning of spot, including yourselves for a long time. Yes.
Yep. Another fun fact.
Uh, how long did that last, by the way?
Try to think back, it's you know, it's a long time ago. I I wanna say probably like the first year, year and a half. Um Amazing.
And and
Yeah.
One of the things that and this is one of the kind of core and it's
Yeah, not everything that, you know, we obviously not everything was right, uh, but not everything is kinda applicable to other companies, but there are some things that I think are.
Uh, and one of the things that I think are applicable is just this
need to solve for like simplicity, right? It's like the simpler you can make things in the early years, the better off you generally are. So part of um
This is it's gonna sound weird. So uh
How we wound up with transparency
Is not because of like some moral it's like oh everyone deserved to have this
This was uh the the the truth.
So it's not some moral position. It was a
When we hired the first employee
And this goes to both priority, uh
Yeah. When we have the first employee
We had to make the decision.
It's like oh
So what files do we give them access to with what
And so Brian is just like
What?
Well like why why
Yeah. Like why would we why would we do that?
And so then we kinda
Then the the output of that was like okay, well
A like binary decisions are much easier than non binary decisions. It's like okay, like everything or nothing is like much much simpler.
And then it's like okay, well if it works for employee
Yeah, employee number three in the company.
Why wouldn't it work at four? Why wouldn't it work at five? Why wouldn't it work at fifty? And we just
kept doing it because it's like, Okay, well until it breaks, we'll just keep doing that, right? And so
This is the uh and this applies to so many different aspects of HostSpot, but
is we try to start with the simplest possible thing uh that might work and then
If necessary, add the yeah.
Add the complexity, add the things or whatever. Like even our original this is actually
tactical thing that everyone should take away, especially early stage startups.
Very first up spot office.
has exactly four tables because aspirations for growth, right? We were in a co working space, so
Well the we work back in the day uh here in Cambridge, Massachusetts.
And so we had
Four tears.
And the only distinguishing characteristic of the four chairs there were two chairs that were by the window, two chairs not by the window. Okay, great.
Hire that first employee. Another decision we have to make is like, Okay, well, where do people sit? And it felt this one is like
Well, it feels unfair to us, uh that
We would just get the window seats or whatever. It's like okay, we believe in a flat organization, like why?
And so what we did is we said, Oh
We'll just
Do a lottery.
Okay.
And it's not like oh whoever pulls the thing gets the window seat.
Whoever pulls gets to choose from the remaining seats because different people ascribe different utility to different seats, right? Like maybe you don't want a window seat, maybe you like the dark, darker corner, whatever it is.
And so we did that.
With employee number one.
Then it did that with employee number two, and we did it every time we hired a new employee.
We would do.
He sees shuffle. We're gonna do the lottery.
We're gonna go down the sequence and of all the C that was the algorithm, right?
And our investors are like, Oh, that's cute and that's funny.
It it's not gonna work.
fifteen, twenty people.

Worked at twenty five, worked at fifty, worked at a hundred, worked at two hundred. We updated the algorithm, we did some local optimizations, which we said, oh
There are some groups that should not be next to other groups because engineers like Quiet Time and salespeople don't.
And so we're gonna try to kind of
Optimized a little bit. So it's not completely random anymore. Now it's like within the product but we still would do it.
Then we said, Okay, we're not gonna do it for every hire, we're gonna do it every quarter.
And that stood, by the way, for
Hundreds of people that
mechanism uh still worked. Right. It's like it's
Yeah.

Oh my God. So the moral of the story is
That one decision of simplifying
Can you imagine the amount of politics we avoided like in
Corporate America.
The amount of calories spent is like
Well, your office is bigger than my office. Your desk is one inch higher or one one like
No, it's like all of that just went away by virtue of that one decision.
And we don't even know, it's incalculable, honestly, like how much grief that
Like saved us.
And then there's all other kind of side benefits to it in terms of uh people getting to know each other better, better chemistry. There's like lots of good upside.
But just the simplicity is almost always a better answer.
I love that everything often comes back to some algorithm you've developed.
Or this N plus one approach of like let's just keep going until something goes wrong.
This is amazing. I'm
I'm excited for many more of these.
Hilarious, amazing examples of how you did things differently.
You've been talking about simplicity.
Yeah.
opposite extreme is
You could say entropy and
Someone told me that you
have this kind of concept that as every uh that every leader in every business is fighting
The second law of thermodynamics, which I believe is entropy.
Yeah. Yeah. Oh well yeah. The actual law is within a closed system
Entropy increases over time. Okay. Yeah. And yeah.
But we don't have to get into the I'm not a physics.
Talk about that. What does that mean when you
And what does that look like when you're running a business? Okay. So in in in lay person's terms, um
The second law of thermodynamics, uh paraphrasing here is that
Over time, unless you intervene, everything goes to crap.

I'm paraphrasing, right? Which is
Essentially the amount of disorder and randomness in a system is going to increase over time. You see this, like when you break an egg, the break of it like
Molecules don't come together and form an egg, right? That doesn't happen. It's always the other way around. Becomes disorderly.
And more random. That's the the second law of thermodynamics.
And this happens in companies as well, right? Like
And it happens in code, like almost every level of abstraction you will see.
uh some variation of this. Um and so the way I think about this is that
In the early stages of a company, you're essentially
Fighting to survive. Like just trying not to die, right? That's the thing. Like okay, like not fight anyone, don't die.
Uh, in the second phase of a company, you're trying not to stagnate.
Right, like you still wanna be able to drive growth and be able to do things like okay, we have managed not to die.
Because
Stagnation is essentially death. So we're still trying not to die. But then um
The third stage is your fighting complexity.
And that's the thing that you will crumble under your own weight over time, uh absent.
Some external intervention. Uh, and this you see this happen all the time, right? And and it shows up and manifests in different ways, which is
Everything gets more
complicated. Like you need more
Layers of management, more headcount, more this, more that, more everything. Everything that becomes harder, margins go
Just bad things start to happen become slower.
And that's eventually it's a slower death, right? Because you're at more scale now.
But it's still eventual death, right? Like the complexity does kill companies, uh, maybe not as quickly as other things, but much more reliably than other things. Um
And so this is why
It's never too early.
To um
Kind of.
Plant the seeds of simplicity, uh put them in there, make that part of the kind of culture of the organization.
And and we have a a thing that are that are part of our kind of culture and guiding principles is around
Uh, what I call fight for simplicity. Uh it's literally those three words, right?
And the the message we're trying to convey is simplicity is worth fighting for.
Like thing number one is important.
But the other one is that
It requires fighting force not it does not happen and it will be a fight because the universe is working against you.
Uh, and it will take calories to fight for that simplicity because everything
Even well intentioned people.
Will introduce complexity because that's the natural way of the world. Uh we want more tiers in our pricing. We want these knobs and dials in the product. We want these more, you know, it's like,
All of it.
tends towards a second law and entropy increases. So anyway.
I love this. The algorithm for seeding is a good example of this. Is there any other examples either in the product or strategy?
Were you
Quarshed for simplicity, and then ended up being
Right.
Yeah, so on on the product side, in the early years, um, and Brian gets credit for the actual um implementation of this.
So we had a relatively broad product, and we can talk about that, um, pros and cons of that, even th in the early years.
But we were solving for simplicity. Uh and we got this from Apple. We'll talk a little and we can talk a little bit more about um
kind of genesis of this, but
We had a rule
in the Hubspot product, as the product grew in those early years, that
Every time you added what we thought of as a knob or dial.
Um
Call it a feature.
You had to take one out somewhere else.
That's a net.
Amount of
And this is a very coarse measurement, right? It's like okay, well, no, not every radio button checkbox drop down whatever menu item that you put in your nav is necessarily equivalent.
But it's better than nothing. It's better than having no constraints. Um
And so
And once again, this goes to the kind of binary thing. It's like it just f at least forces you to think about it, right? It's like versus the because it
The other mistake I think people make in product all the time, but um is that
We measure the cost of a feature based on the usually or even a new product.
Based on the cost of implementation.
Right. That's the first order thinking is like oh this is gonna it's gonna take six months to develop, it's gonna be Y engineers and Z designers, whatever.
Second order thinking is thinking through
the maintenance of that feature is like, Oh, it's not just the first version that goes out. It's like now we have this code base that we have to support and improve or whatever. I get that.
The third order thinking, which is I think is the most nuanced and it turns out to be the most important
is the other costs that that complexity adds. Okay. So let me um we'll come back to this.
So when you go from product number one to product number two.
Right? It's like okay.
Pact number two is gonna cost us this much to develop. It's gonna have this
risk associated with whether successful or not, all these things. So there's gonna be this kind of carrying cost for product number two.
What companies don't think through
Is that
That is
You need the main maintenance of that. It's like oh we're gonna need a team to kinda maintain that new product.
No, what actually happens is that now when you go from product one to two
You have added
dimensional complexity to your business.
What I mean by that is not an incremental increase like oh we went from one to two. It's like
Now every decision you make has to be made to the lens of now we have two products.
We just hired an engineer. Do they work on product number one or product number two?
We're gonna launch a marketing campaign. Do we spend
Five minutes talking about uh product number one and two minutes talking about product number two. How do we out like how do we do anything? Every chart you look at in terms of the
the growth, uh revenue for whatever, like that's all of it. Now every chart that you ever had now has to be sliced by product one and product two in order to really kind of capture that precision.
And so now you have this new dimensional complexity that you just hadn't planned on.
And this applies once again to every level of abstraction. So everything you do in your business
should factor in
the long term cost of that complexity.
And it should be worth it. Of course you need
I can make the case that you need to build product number two and product number n uh n plus one over time.
Uh, but you s should be mindful about the cost of that complexity, uh, I think.
Is there something you've done to help
operationalize that because I imagine this
Everyone's like yes, this is great. Don't do too many things.
Simplify.
Hard to do when you're like, Oh, we gotta drive growth. We have this awesome idea, we have this opportunity, we have a competitor.
I know this is part of the culture, so maybe that's the answer.
But how do you keep people to actually
This principle.
So it's really hard. Um I'll I'll say that. So
And things that have made it easier. It's a little bit idiosyncratic to HubSpot, right? So
Part of what has made it easier for us to keep things simple.
Is the
early constraints uh we imposed we didn't know this at the time. So because we're building for SMB. We have a freemium product.
All right, well when you're doing that
There is literally a limit.
to how much complexity you can add because
We don't have like an army of people that are gonna spend you know eighteen months implementing something. We don't have like
We have to be able to support a product that's free.
Okay.
That's hard to do, right? Like it has to be simple enough that someone can get value from this thing.
And so there's these kind of simple self imposed things. So the
The lesson I would kinda carry away.
Is come up with
uh systematic ways and mechanisms, as Amazon would call them.
of of of putting uh guardrails and constraints in to the degree that you can because
Uh you can put words on a page and try to infuse it into the cultures like, Oh, we believe in simplicity, we fight for this, and you can have meetings and you can kind of get up.
in all hands meetings and could reinforce that, which I encourage you to do.
Uh but
Like a really
Even a reasonably well done system will outbeat uh
Any other mechanism that you can kinda try to put in in in the fuse, right? Like that those things kinda
deteriorate over time is hard to scale them. So I'm I'm a big believer in
Kind of systems that imposed constraints um versus.
I can't help but talk about this SMB piece'cause I do a lot of angel investing and classically
Companies that focus on on small businesses are
Very challenging.
Because getting to
Small businesses at scale is very hard.
They're often kind of more old school, not early adopters.
You sell one and you
That's just like one small customer and they're not gonna
upgrade and roll it out to this large group and they're not gonna increase spend off very quickly.
For founders that
Are exploring S and B.
Or trying to win something has to be any advice other than just
Maybe the advice is probably don't do it. It's very hard.
No, my my advice is absolutely do it. Amazing.
Great. A because it's hard. Uh and we'll talk about that. Um
But B okay, so I'll I'll tell you this uh quick story in terms of how we um
Shows an
Uh I chose F and B. Mm-hmm.
And so this yeah, uh my co founder and I met in in grad school. Uh and he had done software his he was on the kind of sales and marketing side. I was on the product engineering side.
Didn't know each other before grad school and we met there.
Uh but one of the things uh we kinda as we were kinda noodling on and on possible ideas um of working together on a startup.
We said how.
We had done both on enterprise software before, right? The kind of opposite of of SMB.
Uh and
There are definitely challenges with uh enterprise software, right? Um well documented. Well, the biggest one is that
Life as an enterprise software company sucks.
As a startup.
Sales cycles are super long, feedback loops are super long, you you
You have to have sale. Like there's all this kind of you have revenue concentration, which means you don't completely own your product roadmap anymore because whoever is writing the biggest check will ask for these three things. It's really hard to say no, especially as a startup.
All these things that go along with that. It's like okay, we we sort of know that game.
At the other end of the spectrum.
You have consumer startups, right? It's like okay.
Yeah.
The problem with consumer startups is they have very bimodal outcomes, right? It's like either you're gonna be super successful, the next meta, the next Google, the next whatever.
Or it's gonna be to zero, right? Like you're it's very rare that you have like oh you made a few million bucks or whatever, I think it's like either it worked.
Yeah,'cause it's a massive market.
The case for SMB is you have
Almost the best of both worlds.
Okay.
You have
The nicety of enterprise, which is, oh, I can solve a product and people pay me money for it. I don't have to be advertising subsidized. I don't have this bimodal outcome. I can build an incrementally more valuable business that's measurable. So we're oh, we went from a hundred K in AR to a million AR to two million AR because we're a business software company.
But it has the benefit of consumer because there's millions of them out there to sell to. And no, there is no revenue concentration. You do control your roadmap. You have very short feedback loops. You can try pretty much anything that you want because there's
You know, like Oh we have fifty customers, what if we do this and screw it up.
There's five million more.
In technically screwed up, but you can experiment, right? You can take on risks. Um
And so
And by the way, like when UpSpot started SMB
It was literally like a hundred times harder to succeed at F and B, right? And we could not raise capital. Like it was so hard.
'
Common argument was like
There literally is exactly one company in the history of software
That's made a like.
global brand billions of dollars of market cut that was into it. No one else had ever created SMB focused software company before.
And we're like, Yeah. It's like we know. Um
But
The nice thing about it is once you figure the physics of it out, because it's so hard to do, um
You end up and this is as played out. Now there's l lots more proof points than Shopify. There's a bunch of companies that have
uh succeeded in SMB, but
One of the things about SMB is that
In in the software market, this by the way, all I know is software. This the the uh kind of scope of my uh experience is that
In software.
There's what I call reverse gravity.
Yeah.
Over time, the market will always pull you up.
Right, because what ends up happening is that
Smart founders and smart management teams uh will look at the numbers and say, Oh
Well, as it turns out
Our bigger customers
Stay with us longer. Pay us more.
Often have higher NP like all these things, uh
And so if you
Allow yourself to come be led by that, which is
Seemed like a reasonable, smart thing to do.
you will get pulled up in the market.
And because of this reverse gravity, almost every company
Winds up being
Every successful software company ends up being an enterprise software company over the fullness of time. Right. That's what you see. It's like everyone
The kind of
Byproduct of that reverse gravity is that
Every software company ends up being an enterprise software company. So you end up competing with literally everyone.
in the S and B world, you're only competing with the people stupid enough
to stay focused on SMB or try to do that, right? It's like it's a much
It's a harder thing to accomplish.
But once you figure out the physics of it and make it work, it's a much more sustainable, much more fun model.
So I encourage particularly startups.
And maybe
You fight reverse gravity.
For some period of time and maybe but
Атліст старт термікворк.
Uh until it gets really, really, really painful and then try some more, right? It's like uh there's just so much value in SMB. It's uh yeah.
Okay, so this theme has come up a bunch already in our conversation asked.
Chris Miller, previous podcast guest.
what you're amazing at and what I should talk to you about. And he said that you're very good at
Zigging when other people are zagging and zagging when other people are zigging.
And I think that's already come across in our conversation.
I guess is there anything else along those lines that you think might be helpful to people?
In terms of how you think about that or examples of that in action.
So this comes down to kinda kinda high conviction, low consensus fets. Um
And so we had uh
Like three things that we were ziggy and by the way, it's not just me, my co founder and I both have that
kinda zig versus zag. Uh and we kinda ask ourselves and we ask ourselves this to this day, right? It's like okay, well
We understand like this is the way the kind of the world moves, this is the way it's normally done.
But have we considered this completely and I think we should do it.
But have we considered this alternate kind of alternate path. So I would encourage you
Any stage of the company.
Uh you don't necessarily have to do the zig versus zag.
We should at least know where the zig would have been and have have talked it through. So that's kind of thing number one. Um some of the best startup advice.
I've heard and I've ever given is Startups should focus
on one thing and be really, really exceptionally world class better than anyone else at that one thing.
And one of our early zigs is we are going to do exactly the opposite of that.
Uh so from year one, HubSpot decided to build
An SEO tool, web analytics blogging tool.
Yeah.
Content management.
And every one of those categories that we were building a product in literally this is year one had
great products with great companies behind them. Uh and so it's like okay, well why would you do that? Um
And and the reason is
That the one thing we wanted to be good at
was
Solving for the actual customer problem that existed.
And the customer problem that existed was not a dirt of tools.
Lots of great SEO blogging, everything. All the tools existed.
But SMB specifically did not have the wherewithal to put all those pieces together, right? So you and I, it's like, oh, I can throw a website up, I can put Google Analytics on it, I can put a woo warm uh type form form on it, I can do all these things. I can wire it all.
No big deal. Like why is this so hard?
But for
Most people, most FMBs.
That's a science project, right? And so we said, okay, in order for us to solve the actual customer problem.
We have to solve the actual customer problem, even if it's uncomfortable, even though
It's contrarian and every
kinda instinct every advice we've heard or given says we should not do this. We should not go that broad.
But once you make that decision, so then the other kind of lesson learned is like an uh and we said this in the early years.
Um it's gotten
Better since so let's say you do this and and this is kind of the all in one approach. We're gonna have this broad based product.
I'm just like okay, we're gonna be you know, many miles wide and uh only so inches deep.
One of the and this goes back to our uh very systematic thinking is like okay.
We're gonna measure each of those individual product categories that we're now playing in.
Are we in the top three?
in the market in that category.
If the answer is yes, that means we invested too much in that category.
We should not be in the top three because our value proposition is not
that we are the top three blogging tools and we're the top three web analytics tools and we have the top three whatever.
Our value proposition is that everything works so well together.
At that.
being in the top three and having those right features or whatever.
Doesn't matter. Doesn't matter as much as the all in one. And that means we over index on one individual category.
By virtue of that was one of our kind of heuristics for being able to tell.
uh that we were over indexed on one particular aspect of it. That was hilarious.

We're in the top three and we're doing too gr we're doing the wrong thing. We're we're too good. And by the way, and we change that over time, right? Like in in the startup world and now
I w I would argue that most of the categories we play in, we are as uh you know surveys would tell you that we're the top three in in each of those categories now, right? But at the time uh when we were very, very resource constrained.
Um yeah, we were
Try to be disciplined and focused and like
Yeah. So we're just racking up all these very uh
Contrary approaches to company building.
I imagine
People listening to this might feel like, Okay, cool, I'm just gonna build a bunch of stuff. This is great. H work for HubSpot.
Do you have any heuristics for when it makes sense to go wide and not deep?
that you share with founders, when do you think it makes sense versus now you should actually follow the common advice here.
Yeah, so it it it comes down to um
what problem you're solving. So I think um found one of the mistakes I think founders make is that especially product oriented founders,
is that we kind of fall in love with the solution instead of sol falling in love with the actual problem. And you need to solve fall in love with the problem and
And
Putting that constraint on yourself.
Forces you
to kinda understand and at least label and define what problem you're solving because of oftentimes we can describe our product or whatever, but it we struggle sometimes as founders to describe the actual problem. So
If you can make the case, uh which HubSpot did, it's like okay, we've it's not like we immediately jump to that like, Oh, we have this epiphany, we're gonna build the all in one do all the things kind of thing. We're like
Oh.
in actually talking to customers
'Cause we've we considered doing it like oh we'll just do this marketing piece, we'll just do this or whatever is like
No, that that that's not their issue. Their issue is like it's not that these things don't exist. So
If you have as a result of talking to customers and understanding the problem deeply, you come to the conclusion
That you need to do more than just one thing.
But then you should force yourself to have a discipline that we did, which is
Here's why we're gonna do go a little bit broad.
And
Here's why we're gonna make sure uh that that broadness doesn't kill us, right? You have to have the kind of self imposed constraint. You can't have
the best of both worlds. You can't say we're gonna be all in the one and oh by the way, we're gonna be the best. No you
Can't be the best. You can say we'll we'll be
We solve this particular problem the best, but we're not gonna have the best product uh in in along those any of those dimensions.
Amazing. I love this advice.
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Okay, I'm gonna go in a totally different direction for now and see where this takes us. I wanna talk about flash tags.
Sure.
So this is something that you came up with that
Came from a problem of your founder
People come to you for feedback. You give them
Some
Random thought.
And they treat that as gospel and they go do it in spinning.
months fixing something that you're like, Oh, just it's just a thought.
Um
Talk about flash tags.
Yeah, so and this is exactly the the the problem, right? It's not just once again, most things uh exist at every level of abstraction. So
Anyone that manages people, anyone that leaves has this exact same issue, it's the megaphone issue, right? Like someone will pass you in the hall when we
Head offices and halls. Um
Mm-hmm.
Uh yeah, they'll ask you a like a question and as it turns out
Uh
This is particularly true of founders.
Like I have an opinion on
Everything.
Like literally everything. So if you ask me a question, I will have it won't be thought out. It won't be right.
But I will have one, right? And um
And so the challenge is people will kinda take that up and over index on what was an opinion.
And because
It's inefficient to qualify every time someone asks you something, every time you put an email out there.
And say, Oh, by the way, like
Yeah, this is just by MP. You can put like you know, IMHO or something like that, every now and then, but then I don't like people say, Oh, that's just like politeness or something like that. Right. Okay. So here's what flash tags are, literally.
And I live uh most of my life uh through email.
I might do this in other media and as well.
Yeah.
It's like the hashtag that we all know.
But it's a discrete set of them.
an escalating set of uh what I call
The kind of dying on the hill spectrum.
Okay, so here's here's how it goes.
The bottom hashtag is hashtag FYI.
The definition of the S F Y I is
I came across this interesting blog post or I found this news or whatever.
Just letting you know.
No response expected.
Fine, go on with your life.
Next level up.
is hashtag suggestion.
I have this thought that came into my head
Because I listened to the episode on Lenny's podcast with Sam from Microsoft or whatever and
It feels like
Like it'd be a good thing to kinda explore.
But hashtag suggestion means
I still don't expect a response. You don't have to do the thing I'm asking.
But
It is something that I would do if I were you, or at least I would consider if I were you. Okay.
Next level up is hashtag recommendation.
Half tech recommendation is
I've thought about this a lot.
I've done some research, I've done some digging, I've done some soul searching.
I would do this.
It's still not a you have to do this.
But
If you decide not to do this
I would
Appreciate a response in terms of
Why you don't wanna do this, what you learned in the process of exploring this particular thing, other alternatives or something.
So it's like a response expected.
But still not a mandate.
And the last one
is hashtag plea.
I beg of you, we don't have mandates at HubSpot.
А фотобавде со мой тума і май сол.
I believe this is the thing we should be doing. I'm going to plea with you.
S
Please just do this. Um
Still not a mandate, by the way. Um
But
That's the
And so now it's
commonly accepted. Like it's on the wiki like people know it's like and I use this
multiple times every day other people at the up spot use it. Um
It is
Remarkably.
Effective.
Because they're self descriptive.
Hashtags are searchable, right? You can go back and say, Oh, I want to know the last five hashtag recommendations that I made.
How those turn out, uh like it's there's just so much goodness
That comes out of it is not hard to understand or describe. It's really interesting that none of them are just just do it.
You say that there's no concept of there's no mandates essentially
Why is that? And do you feel like people do people just treat poly as okay, I actually just really have to do this?
So we've always had as per
kind of early um manifestation of hub spot culture, we kind of believe in autonomy. Lots of companies believe in autonomy, and we tried to carry that
That idea is
Far as as we can. Yeah.
For the most part we do that and that's
And the hashtag plea.
is part of that, right? This is like the we trust our people, we try to hire the best, we
Expect them to learn and we still want.
Than to
Yeah, have the kind of discretion to be able to make hard decisions. And we have um you know the clear uh we call them DRIs no we didn't invent that term, a directly responsible individual.
And we'll talk more about uh we should talk more about decisions and how decisions get made, but
But the reason
I do hashtag plea.
І за соф.
Uh
Uh
A mandate without being a mandate, right? It's like okay.
Okay.
And by the way, like the number of times that happens is like I can count on the fingers of like one hand and still have fingers left over, right? Like that almost never gets to that. Um
Because either I tuck myself out of it, it's like okay, and this goes to the is this a d hill I'm willing to die on, right? It's like okay, um
I get it. I may disagree.
Is it the end of the world? Um yeah, is it really gonna do that much harm?
And is the cost of
Kinda imposing that kind of founder card, uh you know, like
Go do this. Um
Does happen just not that often. Um so
Yeah.
Awesome. And we'll link to the there's a post you wrote about how to use these.
It's flashtags.org if you want a quick way just to get to that blog post. I believe in domain names and shortcuts. Um
I believe in simplicity though.
You mentioned decision making. There's something interesting there. Talk about how you make decisions at HubSpot.
Like most organizations, HubSpot historically has made decisions
Poorly. Um it's it's just all a spectrum, right? I think uh decisions are one of the hardest things because it's
Hard to strike the balance. Um
And we've evolved it over. I think we're much better. Um
uh than we were in in our earlier years. The things we get wrong, most people get wrong. Uh and so I'll tell you the things we we get right now is that
Uh
So we
We like to be we're very
Yeah, data oriented. Uh we like to make
Data informed decisions, but data doesn't make decisions people do. Uh right? So there's like
That's like thing number one. Uh it's like you know, you have lots of geeky founding companies, whatever is like, Oh like we have a chart that says this, so we should go do that.
Doesn't work. Uh doesn't work out five like awesome.
Uh and we also um have one position that we designate.
To make the decision.
And that is not necessarily
The executive overrating that team is like, Okay, well
So and so
And we as and they literally own that. And we didn't invent this idea either, though this is existed long before HubSpot.
But it actually works. It's like you have to decide
Who's gonna make a decision? And that is the like the num almost the number one decision uh to make. And it's like okay.
Uh don't pick people you'll trust to make the decision. And so that's kind of thing number two.
And the biggest mistake, and we used to make this much more than we make now, um
is and this is and uh Amazon stayed this really well. Uh
They have theirs is called disagree and commit.
Um
Uh we have a slight twist on it I'll tell you why we twist it a little bit. Uh ours is
Uh debate, decide, unite. That's our kind of phrase that we use in Hub Spa culture.
But the idea here, the core premise of it is that
Once you make a decision
getting alignment around that decision because there will always be at any
any amount of scale, people that disagree with that decision because they were debating the other side. Right. Like they just didn't like they went
They would have picked option A.
And we ended up picking option B.
But it's
Extremely important.
Uh that
Even when a decision gets made and we decide to do something that's contrary to the thing that you believe and would have debated for and did debate for.
You lost on that particular one. Fine. Um
Hard to do, but so important, so valuable. Um, and I'll I'll tell you why uh we tweaked um the Amazon one. So the disagree and commit.
Sounds a little bit
harsher than we like, right? Which is how
It's fine for you to disagree, but then
F and commit, right? It's like okay, I I get that.
Um
I'm I'm biased. Um
But
So the debate is
Okay, so let's have open debate. Let's get all the options on the table. Uh
Let's actually make the decision.
And then it's unite around that decision, not just it's like okay, like let's kinda come together around that. Um and at
Sounds more hot body. Um so anyway, that's but
It was a lot more friendly. I was thinking that as you were talking. Debate, decide, unite.
Versus disagree and commit.
And then there's like have backbone, you know, in that one. It's uh
Yes, I like it.
Yeah.
Partly a HubSpot thing, but partly a me thing.
And this will not surprise uh surprise you at all.
Is
I I like to think
systematically uh around decisions, right? And so I'll I'll give you an example. Um
The question I ask myself when faced with the
a decision or a thing that I'm trying to do. It's like okay.
If I could write
Python code a Python function.
to come up with an answer to this.
What would be
Variables or the coefficients of what you're not uh
If you were making an Excel spreadsheet to make this decision, what would the columns be?
All right. You don't have to decide the weights.
But at least decide the factors. Then the next step is like, Okay, I here are the factors that I think matter in the making of this decision. I'm gonna decide between these seven options, here's the things I'm gonna look at, right? Like you could you would do this for
Picking a school to go to or you know, it's like it it works, right? And you'll have to take it
uh to the nth degree, but the exercise of going through it is like okay, well step one, if I can
Just identify the factors that I think
should impact the decision.
That's an eighty percent win right there.
Not because it's just in your head.
If the team works collectively to say, Okay, here are all the factors that I think should contribute to the making of this decision.
Then number two is okay.
We kept
assign exact weights. So we can't write the Excel formula just yet or the Python code.
But can we at least stack rate the factors?
Like this factor is more important than that factor. Now you get a closer
Sense of approximation, right?
You're still not going to use the spreadsheet to make the decision, but
A human making decision.
has much better information that they had than pretty going through that exercise.
Well, the mistakes people make around decisions and and Amazon has written about this. Uh I'll I'll give you kind of my take on it.
Is that
The calories you spend on a decision
Should be
proportional to the consequences of that decision.
He calls them like uh one way doors versus two way doors.
which is a kind of a binary heuristic, which is uh I love the elegance and the simplicity of that.
I'm taking it one level further, um, which is
It literally should be proportional. It's like okay, if you have a really, really big decision that's gonna be expensive to change
Really, really spit a lot of calories.
making that decision. You might still get it wrong, but it's it's worth it, right? Like that's um and it's not just around decisions, around activities and best and things that you're gonna do.
Um
is that the calories you spend should be kind of proportional to the kind of
the outcomes and and what you're seeking and the value of it.
And that's one of the things I try to apply to my life. It's like okay, like my geeky nature wants me to go uh nine miles deep and you know
Yeah. Stop writing code and do this thing or whatever.
But I I found
That that one simple thing is like okay.
Is this like a first order approximation where I can just identify the factors or it can like
And um the other thing that helps by the way is and we'll we'll talk about this, um so one of
Is
My default position on most things, and I don't mean this in a negative way, is no.
Like, oh shiny object. Should I go do this?
No.
And then I have to sort of force myself okay, like
I need like reasons to say yes. I have to kind of force myself because it's easy to say I love new things, I love new people, like I I love all that.
Is then so I have uh
Yeah, like us.
Sorry, but no post uh on my blog that uh life changing for me.
Uh
And
So so the idea there is that um this is goes back to
Well the other first principles is uh
Time is worth a few kind of
Constance, right? Like the so every time you say yes to something by definition, you're saying no to something else.
And so this is goes back uh to the kind of product heuristic we were using in the early years of class. Like oh when you put something in, you have to take something out.
Because we want to kinda keep the complexity constant if we can. Same thing. So it's okay to say yes to things.
But then you have to force yourself based on the calories that you're committing to.
To say okay, well
What am I gonna take out of my schedule, out of my life in order for me to be able to make room for this thing because
As it turns out time I have not been able to, despite my best attempts, bend the miles of space and time. Um
So how do I make room for this new thing that I want to say yes to? Um yeah.
S
I love the way your mind works. I'm excited to talk about culture and how this connects in the way you think about culture and
Through all these frameworks and lenses.
Before we do that.
You kind of hinted at this idea of how you pick what to work on.
And I know you have kind of an interesting framework for how to decide what ideas are good and what ideas are worth investing in.
I think both as a founder and a
Product leader.
How do you think about deciding what is worth?
Investing in.
So imagine the Excel spreadsheet again. So let's say you're valuing an idea for a startup for a new product, a new feature, whatever it happens to be. I think this uh this applies. Um
So the first thing
Uh you should look at.
Is
And I I measure things on a scale of zero to ten because I like quantifiable things. I like to be able to multiply X by Y. I don't like letter grades. Um
Uh peppy of mine.
So
Put a number on it. It's like, okay, if this thing were successful, so let's say we're just picking a new thought-up idea, like I'm considering starting this new business. Um
If it were successful
What could it be?
What's the kind of magnitude of the outcome? However you decide. It could be impact, it could be revenue, it could be market cap, it could be peripheral whatever it is. It doesn't matter.
Um I mean it matters but uh not relevant for the for the discussion. So that's the potential.
Thing number two is
probability of success.
Okay.
And now that I pause here and tell you the most common mistake people make.
Is um
They think through the probability first without actually forcing themselves to think through the potential. And here's what happens.
is that they apply a filter that says oh
I only have a like one in ten chance to pull this off. There's only a ten percent success rate or whatever.
Not gonna do that.
Well if it's a one in ten percent one in ten chance at
Ten billion dollars.
It might be worth it, right? Like it might be like maybe not. Like sometimes it's you know based on stage of life and things like that in terms of yeah, risk you can afford. But like for instance
And so by the way, and when I say probability side of me, it's like you can do it multiple ways, right? You can say, Oh, here's the X percent chance.
You can do um w in statistics as an event tree that's like oh
Here's path A.
There's a wide percent chance that happens, and here's what the outcome would be.
Z percent chance or X. Anyway, we are the popular things and you come up come up with what's
Uh called the expected value.
Anyway so let's say we just look at two branches, like oh there's a
fifty fifty chance.
That I'm gonna make
Ten million dollars.
It should we'll take one branch just to keep this uh shorter.
So the expected value of that is five million dollars.
Right. That's literally the expected value. It's like oh, you got a fifty fifty chance at a a ten million dollar outcome.
And let's say you have a
Ten percent chance.
At a hundred million dollar outcome.
Or a final, whatever it is.
So mathematically it's like okay well
You should at least consider that other one, even though the chances are lower because the expected value is higher. Okay. So that's thing number one. Anyway, we'll get through the rest. So
Start with the kind of potential outcome, then look at probability, not the other way around, because then you're apply that mental filter and cast throw out ideas that may not have been worth throwing out.
Uh the third thing is there is uh what I think of as either passion or proximity.
Do you care about this actual thing?
That you can actually
Yeah. Um
Kind of bring to bear. Um
And then
The fourth one is uh
Is
Since I need a P word.
It's like prowess. Like do you have some assets, some
Something that makes you uniquely positioned.
uh either if you're building a new product, you have existing lines of code that you can reuse, you have a market that you already have access to, there's something about this particular idea that you have an unfair advantage.
And that impacts your pollibility of success, right? And this is the other reason it's like you need to kinda look at all those things. Um
And once again, no one thing is the deciding factor. You're not gonna just pick
The thing that has the high expected value take the potential times or whatever, it's like you have to sort of
Look at all of them and look at your own uh
Kind of situation, but
It helps to kind of think through that to kind of have the kind of discipline um to say, Oh, how big could it be? What are the chances?
Uh
How much do I care about solving this problem? Is this something I can work on for two years, ten years, twenty years? Um
And finally like
Why me? Like why
Why me? Why my company? Why
Would we succeed at this, uh why it's our
Chance of success even low.
Higher than the rest of the
Rest of the world.
Okay, so I'm already picturing the spreadsheet here for every idea you have. You basically have a column.
Potential.
Probability of success.
Yes. Proximity, you said? Just like how passion. Um,
Yeah.
I started with passion.
And I have an issue with passion uh as a word because it's ambiguous because we talk within uh startup circles, it's like oh pursue your passion.
Sure. Um, but it's like you know what?
Most of the companies that exist today that are even successful ones with awesome founders
They didn't necessarily pursue their passion. It's like they
Kind of.
May you're back for like in in the RCO uh particular
Problem or a market segment or something like that, but it's like
It's okay to become passionate uh about something as you kinda dig into it or whatever. That's fine too. So it's fun to anyway. So
Yeah, I have uh one of my favorite startups that I've invested in is called Zip.
It's a procurement platform.
Uh the founders were not passionate about procurement when they got into the space. They just saw a huge
opportunity. They thought they could build a much better product.
And they got passionate about it once they started working on it and finding exactly. That's this is the thing, right? So yes. Um
If you can find your true calling and this is what you were meant to do in the world and and and you have the opportunity to do it, great. Uh
That's a tiny small fraction of people, right? Like that's uh it that it doesn't happen. And you may not even know what your patch like especially if you're a first time founder. It's like okay, well
I haven't seen the world. I d I don't know. It's like um
So yeah, it
Okay, so just for people if they're creating a spreadsheet for all their ideas and for startups.
It's potential.
Probability of success.
Passion, prowess.
Yes.
Okay, amazing.
Okay, let's talk about culture.
I know you spent a lot of your time.
On helping build
Help Spots culture create the original culture.
You created this epic culture code deck. I think it's a hundred twenty eight pages.
So maybe just to dive into it, what was that process like to
define the culture of a company and maintain the culture over time.
Um I'll say awful. Um I'll give the the very quick story because I
My co founder and I we're having a lot of our founders' meetings or founders' dinners as we do. Um
And he had been meeting with his CEO group, um, and he said, Oh
I hear this like culture thing is like really important. By the way, the word culture had never been mentioned uh prior to this conversation, the Halt of Hub spot like ever. Um
And this was how many?
How many years in?
Uh this is I want to say three or four years in. Uh
After it.
I can check the records, um
Because by the way, even like Brian and I, even back uh when people worked out of offices
Most of our communication was over email and async, uh, we've always been big believers in the kinda written form. Uh
But anyway.
So I can tell you whether you know the word console was used or not. Um
And and it was not.
And so
He's like Oh
I I've heard because we can talk about Steve for us culture is super important.

Can you go do that?
I'm like, Okay, right.
Like all the people and all the
I am like
Yeah.
Literally like
Bottom decile, if not like the worst possible person is not that uh
I don't like people. I just don't like being around them a whole lot and from what little I know of culture.
It sort of involves people, right? Like that, you know, I don't know.
But
It seems like that'd be the wrong person. Uh but anyway, I will I'm
I'm team player. I'm like okay.
It does feel like it would be important. Um and so I I took on the task look I and and I didn't really know.
It's like
Like when you said like Darmesh, can you go do that? Like what does that mean? And so when I
Took it to me and it's like okay, well
Like culture actually already exists. We have a culture. Like it's like
Whatever it is. Uh so
And it's working pretty well. Companies doing well, people seem happy um
And so I I
Said okay, well
What I'm really
try to do is kinda describe the culture that's there.
So it's not creating culture, it's articulating the culture so we know what it is.
And so then this is the
So the question I asked myself
Is I literally asked myself this question, which is
If I could write a Python function
That would measure the probability of success of a new person coming into HubSpot.
What would the factors be?
What are the things that if I could measure if I knew
I had a true function that says oh on a scale of zero to ten
Here's how they ranked it. This and this and this and this and this and this.
I could approximate
How successful and how good that it's gonna be for HubSpot.
That that that's my exercise. Okay.
So like yeah.
did an internal survey. And I'll tell you why this was uh such an awful experience in the beginning, uh, because this is also a good story.
So once I took on this task, I sent an email to company, it's like, Hey everyone.
Uh I'm I'm just gonna be like
digging into culture. I'm gonna send this kind of survey out. I just wanna get us an understanding so I can
Great. Uh
And the
Negativity and the visceral response.
To that one email.
was literally up until that point uh
It still ranks in the top three.
Like worse.
Things I've ever
But like people felt so negatively and so strongly and I was not expecting it, right? Like in
And I'll tell you the one line that really like just
Uh
Was gut wrenching was like
Dermesh.
Here we're talking about culture.
Next we're gonna have like posters up on the wall about excellence.
HubSpot is not the company that I thought I joined.
And
Like oh
And I I it's just like the geek part of me like I I just not I did not know how overloaded that idea of culture was, right? And so
Then when you dig into it, it's like oh the because
So many companies have done it so poorly, uh and just
Didn't yeah, walk the walk or whatever. This this is why there was a reason why there was this kind of negative response. So anyway.
So I went back to my thing is like
I get it. Um
So I'm gonna
T I describe what we have and then write the shoot function. So I I wrote uh the slide deck.
Which had exactly sixteen slides, uh, and that answered this one question, which is
If I could write a Python code, uh what are the factors? Um so what are the attributes that we would look for in humans that uh
And the reason I came up with that particular question
Is that I got this uh when I did the survey
I did the NPF survey, which everyone knows that you would send a uh customers is like, Oh, feel zero to ten.
How likely are you to recommend HubSpot as a place to work?
And
The other NPF question is like why did you you know give that answer?
As it turns out, here's the thing I learned, which uh was
Uh
Troubling.
Everyone was happy.
And the reason they were happy
It's because of the other people at HubSpot.
That was the number one reason.
Which is both good and bad. It's like, okay, well, that's awesome, but that doesn't tell me anything, right? It's like, okay, well, that's like a self reinforcing kind of recursive loop.
And so that's when it's like, okay, well, what makes the people at HubSpot the people that are HubSpot? Let's come up with the attributes that define
what it means to be one of these people that make other people happy.
And so we came up with the original kind of set of things that were embodied in that slide deck.
And I call that slide deck the culture code deck.
And the reason I called it the culture code deck is not because it was a code of conduct or a moral code or this is how companies should be run.
It was because if I could write
Code.
to kinda define the culture of HubSpot, this is what the code would look like and and
Since that point it's like the
Question I keep asking myself.
is if we could have an operating that ran the company, uh it's the geeky geeky part of me.
Not that that you could do that, but what would that look like, right? And so and the big
Kind of unlock.
There are very few
Original
ideas I've had that are any good. Uh one of them
Is this uh
Thing that
Culture is a product.
Mm.
Period.
And that every company builds two products.
One is the product they build for their customers.
And the other is a product they build for their team.
That's what culture is, it's the product you build for your team.
And
Let's say we
stipulate that that just happens to be true. Just
Um
He remembers me for for a minute.
If you assume that's true.
then a bunch of things kind of follow from that um that postulate, right? That hypothesis.
Which is
Oh well.
Just like we would never build a product without talking to customers, we would never build culture without talking
to the customers of the product, which are the people.
Just so we so we do
A repeat of that original NPF survey we've we've been doing every quarter now forever.
to figure out what the NPS of that product is, our culture product. Um
The other thing is like okay, well
There's no product person in the history of humankind that would have said oh
I built this product, it's awesome.
I'm done.
No one would ever say that. And this is
The number one mistake, I think, um I'm biased. Uh
I think founders make
Is that they say, Oh
We have an awesome culture, and my job is to preserve the culture.
That is not the job.
Because
the needs of your customers change. The needs of the employees change, right? The culture exists to help
The great people
do great things for the company. That's why the culture is there.
And the things they need.
later as the company scales are different. And so
Just like you would never freeze the lines of code of a product, he would never freeze the lines of code of a culture. Culture
should be iterated on just like you iterate on on product. So that was like the
And there's so many other things that kinda fall. So just like in a product, you will
Get feedback from the customers like oh
Here are the bugs and we actually call them bugs. It's like oh here are the bugs in the culture.
And we at the all hands meeting, so we have the survey comes back.
Once again, transparency uh notion.
Every single survey response it's anonymous in terms of who submitted it.
We publish it, right now.
The quant score, the subjective thing, everything. And then we will categorize it and we will uh then at the next all hands meeting, uh we call them all minds, uh
Anyway, a little bit all mines.
Um
And it's like okay so
Here are the things that we heard.
Just like we would do for a product meeting, it's like oh we just the customers like here's what we're hearing back, it's like
Here's a bug that you've identified. Uh,
Here's the ones we're gonna fix.
And when we're gonna fix them, we're gonna commit like oh like you said this was broken. Okay, we're gonna we're gonna do something about that.
Um
Here are the things that like
Yeah, I know you don't like it that way, but it works as design, which we do in price.
All the time, right? Like and
You should have the right to do that. It's like, yep, some people are going to disagree.
And there may be any number of reasons why we think
that needs to stay the way to say necessarily forever, but as it stands
We are not prioritizing this. We are not fixing that thing that you think needs fixing, uh for whatever reason. Um so
The the one lesson here is uh
Very few things I've learned that I think are universally applicable.
That one I think.
is right. Um, and just so much rightness and goodness falls out of that is if you think of the people as customers, and if you think of the culture as product.
It takes away this kind of abstra of working on culture and then takes away this thing.
I heard this back in the early uh commentary.
My team was like, Oh well.
Culture is not something you really
build because that seems fake. That seems inauthentic that you just go it's like oh we're gonna craft this culture.
Like no, uh it's
We craft it the same way, like I'm not saying we're gonna impose it like we're gonna do this off in isolation.
Uh, but we're gonna work on it and it's something you actually do manifest. Um, and it's not just up to the founders, um
Wow.
What an amazing story.
You're definitely getting laughs per minute from me. I think there's at least one laugh per minute so far in this podcast. That's amazing. And
I think this point you just made about
Your job is not to
preserve the culture as a leader. I think that's really profound. Cause I think most people don't think that. They think their job is we need to
Maintain our culture as we grow. That's it's all fading away, our culture's changing.
But your point is that's that's good and that's great. Bringing it back to product, I think this is an important thing uh we kinda let
This is the kind of second order lesson to learn after you start with the culture's product.
Is that one of the challenges almost everyone uh will deal with is that
You have these things, um and so by the way
Just because culture is product does not mean there's not a sense of having uh what some might label as kind of core values. Right. Because we have this in product as well. There are core values that the product believes in, like we believe in about our product that we're going to kind of hold constant through it, right? Like oh, we're building for S and B, want it to be easy to use. There's constraints that we put on ourselves that are intentional.
Uh that even though we iterate, we're not gonna iterate away from these things that we just
This is the kind of that high conviction thing again.
But
Not everything that's part of your product is a core value, right? So not everything that was part of your culture in the early years. So transparency is one that has endured.
over a long time, right, as part of our core value. And we preserved it.
Uh even though it was it was uh
troublesome through the IPO share that story. And then there are things that we change that we're part of like, oh, we believe this meritocracy thing in a flat organization.
But the manifestation of that was a bud with the lack of titles, right? And so we changed. It's like okay, well there are things
And uh here's the other thing that and this uh
It's a mixed metaphor problem because I haven't been able to come with a good metaphor yet, but
There will be things that um
that you have that are kind of core
And and the way I describe it right now, I'm just gonna put it out there. Uh I'm kicking myself for not coming up with uh a better metaphor.
Yeah, is like federal versus state law.
All right.
So there are federal laws, um right we have here in the United States, um
That says, okay, here are the things, and it's the these are the inalienable rights of all citizens of the United States, and these are the things that are core.
But then we have state.
Things right oh.
For this particular state on these particular aspects, they can s kind of optimize for their particular state, yes, we understand like this is the co rolling, but
For RC we're gonna do this. So we have something similar at HubSpot.
We have a core set of things that are kind of part of the culture, part of the thing is like okay, here's what we believe.
And then there are things that
Uh
The individual groups are
uh head of engineering could come back is like, Yeah, I know our overall like the founders leaning is X.
But
For my particular group, that doesn't really make sense. We're gonna do this. So I'll give you an example.
So one of the core things from the early years of HubSpot is
Like we don't
care about what hours you work, like from what time to what time. It's like it
Doesn't matter. Like literally does not matter. Since we didn't track it, we don't care.
But then over time it's like, Well, we have a a support organization
And that organization, as it turns out, our cut does matter to our customers, right? Like we need to
You know have coverage and things like that. It's like okay, well that's sort of
Make sense, right? It's like
But then you sort of have to

They pick your battles but then kinda fight back. For instance, transparency
There have been times where individual
uh org leaders like okay, Darmesh, I know you believe in this transparency thing and Brian believes in this transparency thing.
But it's inefficient for someone that is a SDR in the sales organization to have access to the high order financials. It's a waste of time.
It's a distraction. That's that that was the argument.
It's like
You may be right.
But the binary decision, the fact that we value transparency so much
We're going to
Mm.
Yes, maybe it is a distraction. Fine. Um and the other one is like oh
I don't want my team to have it because I just don't
Yeah, we were hiring so fast and it's like and once again
That's a lot of trust to put into people or whatever. It's like
Yeah, but then this one of the other lessons is
Cultures over time uh
become self fulfilling prophecies.
Um is that
So in the early uh
Oh, this is the
Big lesson learned. Uh so what I
put the first version, the public facing version of the culture code out there.
Nak?
Yeah, feedback from the team and like Darmesh, like you say this in the culture code deck.
And it's just not true.
was not true enough for us to kind of like state that as a thing.
And so the thing that I did is uh
In the deck.
I have what I call these little liner notes. It's like stuff going on in my head. It's like oh
This is not really true yet, so it's more of an aspiration. Uh, this is how we want it to be, but
We're not walking the walk yet on this thing.
So I didn't take it out because I want to be an aspiration. And here's the thing that I may have not thought it through. I cannot take credit for it.
What ham hap happened over the fullness of time
Is that those things that were aspirations became increasingly true by virtue of being in the deck.
Because as people join, it's like oh
That's the thing we aspire to. So I'm going to
pretend like that's actually the culture of HubSpot, which is exactly what we want. Um so
It's okay to s say things that are aspirational, just call them out. Uh don't
But
don't uh back off of the things that you would like to be true.
Well
There's so many lessons there.
It reminds me at Airbnb actually
I was there when they created the original there's these six core values.
Of Airbnb.
One of them was simplify.
Turns out.
And then, I don't know, some number of years later
the founders realize we're not actually good at this and value should to reflect who you are, not who you
Aspire to be.
And I like this middle ground you find of like, I'm gonna put in here, but I'll note this isn't necessarily who we are.
We didn't do that. That was a that would have been a smart move.
So they pick they remove that core value. They're like, We're not we're not actually this. And it going from six to f uh four. There's another one they removed.
So I was really impressed'cause they're like, Okay. Wait,'cause then comes up in meetings, they're like, simplify. No, we have it's actually really complicated.
Yeah. Yeah.
Okay.
So what I'm gonna do, I have one more question.
About AI. Uh and to make this work timing wise, I'm gonna cut the lightning round.
So I hope that's okay.
Totally fine.
Okay. I know AI is very top of the
This was my diabolical plan to have to skip the mite waking round because that's the thing I'm not good at. I just not I'm not good. Playing four D chess here.
Um you knew exactly the timing and you're like I will take this long, all these answers, so it'll perfectly play out.
Um, so I know you're spending a lot of time on AI.
It's on many people's minds these days.
You built this product called ChatSpot. Is it still called ChatSpot, or did you is that the product you changed the name for? That's still ChatSpot. It's still Chatspot. Still ChatSpot.
And I know that you've handed that off now to like a team actually that's working on this. It's not like just a Dormesh project anymore.
So I don't know exactly where to go with this, but just why is AI so
Top of mine. And where where where do you think people should be spending time?
Where do you think things are heading?
What comes to mind around AI?
Yeah.
obviously I'm not alone in my excitement. Um, but I I will say this. So I've been
I'm about to hit
The thirty year anniversary of
My working in like
commercial software, right? Like that's so I've been at this for a long, long time. And that's all I've ever known. That's all I've ever done.
And
But last time I was this
Both excited, um
I'll just excited because uh was
when the the web first came along in the in the
mid to late nineties.
And like oh
Like this literally like
Change everything, right? It's like relevant to everything. It's like
If literally everything is going to be impacted by this uh thing called the internet. And I was
My early twenties, right? Um
And I've been, you know, here for mobile, I've been here for social, I've seen lots of things that, you know, people got really excited about.
Uh but nothing.
To me has
kind of hit the Richter scale to degree that AI does. And the and the reason is
Uh okay, so if you think about um early
Yeah.
Like early.
Computers PCs. That that kinda gave us compute at scale, which was awesome. Um
The internet effectively gave us kind of distribution at scale. Allowed us to take uh information products, whatever, and get them out at scale because everything was now connected. Um
Wh where before it was not.
What AI gives us now, um, is is cognition at scale, the ability to kind of literally amplify the human brain, right? Like that's
Never been done before. Look, not that we haven't been trying, but now we have demonstrable
evidence and products that actually work. We've used Chat GPT and it's uh and and uh products like it.
And so it's
Life changing, right? And so for the
product people out there, which is a lot of you, um
AI
So by the way.
The internet unlocked a massive opportunity because uh
Especially for startups, right? It's like oh
We can just reimagine the world with this new thing called the internet that was not possible a year ago and now is.
what can we kinda now unlock and lots of great companies uh were created.
I think something similar will happen here.
Uh and there's a couple of things that I think that are uh just
tactically that I think uh are
possible vectors that kinda satisfy my uh spreadsheet of if I were gonna choose ideas and this applies across industries.
Is that um
So as software companies and product builders
Most of us um
have always called our products like oh we build intuitive products. Where's that good?
Okay.
Well we say that, right?
Uh
As it turns out
It's just not true.
Uh because
As a user of
X product, whatever it happens to be. It's like okay, I've got this mental model, the thing I'm trying to accomplish.
And then I have to translate that into a series of clicks and drags and touches and swipes in order to accomplish
the thing that I want in the software product that I'm using.
And what varies is the degree to which that translation needs to occur. But there is this impedance mismatch, right? There's a translation that has to happen.
from the what's in my head, like I wanna remove this background in Photoshop. I wanna create this report in HubSpot.
Um and so
The opportunity now is that
Uh, we're going from what was an imperative model. This is what engineers would call like a step by step
You give
Instructions to the computer, I could do this, do this, do this, do this.
And then hopefully you get the outcome you're looking forward to what engineers would call a declarative model.
A declarative model is you describe the outcome you want
Not the steps to get there. Uh and the
closest analogy that most people are familiar with
Um is SQL. Um
The Korean language, right? So before SQL
If you wanted to get data out of a system, you wrote code that says, okay, loop over all my customer records and then filter out the ones that have less than a million dollars of revenue.
And and then give me the result.
And F U L said
No, just put a where clause on it. Describe the data you want and what
columns you want and how you want to order it and what filters you want to apply.
And it figures out it the database figures out how to get you the thing that you're looking for.
Now we have the ability to do that for interfaces.
for software, right? So instead of saying click here, drag here to say
I want you to generate a report that's all my customers in Europe that we signed up last quarter that were more than a hundred K in ARR.
And you just literally take the thing that's in your head.
And express it.
Um
In whatever medium you choose, uh text voice doesn't matter. Um
And the software now.
can actually the w so now the technology exists.
To pull that off. Uh did not exist before.
And now it exists. I know it didn't exist before because
Six and a half years ago I built this product called Growth Bot.
Mm.
That was a chat bot for HubSpot software and business software, generally for marketing and sales people. It's essentially what chatspot is now.
Amazing product Rothbot and it had just one
Teeny tiny small problem.
Which is it didn't work.
And really well conceived.
Brilliant idea. It just didn't work and
But technology just wasn't there, right? They you just couldn't do it with any degree of fidelity.
Because it yeah, AI hadn't and now you can and that's what
kinda caused me to go, uh kind of prove out my theory. It's like I had a chip on my shoulder, particularly with that idea, right? Uh
But I think um
And I'm not suggesting that you know web and uh mobile interfaces are gonna go away.
But there are a class of use cases across
Pretty much all software.
Uh where we can
make things easier for the human, uh, by not forcing that translation layer and just make it truly
Intuitive. Um yeah.
So
Thank you for coming to my TED Talk on my whole podcast.
Yeah.
So it's great about watching you'cause you were you kinda build in public with this AI stuff.
that you're just you're doing it. Like your approach to learning about this is building and doing when you launch chatbot or chatspot.
Uh you tweeted that it took you many, many late nights of work.
For people that
One to
Understand what's going on, get ahead of where things are going, build the skills to
be relevant in the future. Do you have any advice as it just
build stuff and do it, or is there anything else you'd recommend?
For people that want to understand what the hell's going on.
Yeah, so uh uh and this is
Very simple. Um
And it's the same thing for like uh
engineers and software um as well.
Is
Don't
Try to go learn something uh because you think it's like worth learning.
Find an actual problem that you care about.
And go try to solve it with that new thing, right? Like you have something tangible that you're trying to do. So for instance, um you know going back to my poke.
back to the talk around public speaking. It's like okay, if I had said, Oh, I want to learn
About humor and stand up comedy.
I don't think I would have accomplished the thing, but I had a goal in mind, right, which is like, Hey, I need to be able to get up on a stage and hold of a thing and I have this measurable thing like I
So
Whatever it is, whatever line of business you're in, whatever you do as a professional, um
I guarantee you there are ways uh AI can help you with even with the tools that we have out there right now. So either
Use the tools.
Build tools on top of the APIs that exist very easily accessible um right now and very cheap to just kind of start.
Um yeah, just just do it and iterate. And I
I'm a big believer also in kind of learning in public as well. That's why I do it like that's why the culture code is out there. It's like okay, well, if you accept the fact
That culture is a product.
We're gonna learn about things much better, like instead of just getting feedback from the employees at HubSpot.
Why don't we put it out to the world and because the internet is excessively good at telling you why you're an idiot, right? It's like uh it's one of its quirk.
Course rings. Um
So I I would recommend like
Have a goal in mind. Um
Write about it.
I'm a big believer in uh writing generally, but uh yeah.
Do it in public. I love that advice.
Is there anything else that you wanted to share or touch on or leave listeners with?
Before we
Wrap up.
We cover a lot of territory. Yeah, we did. Yeah, we did. I might do the uh
Quick while I'm ahead thing, I'm gonna I'll I'll leave it with this. Um
So I have my my definition of success. Uh and I
uh came up with years ago that I kinda still stand by
And the hubspot actually stands by is
Success is making the people who believed in you look brilliant.
That's it.
What I like about that is it's not like an inward facing thing. It's in a this is the kind of
Like customer folks like oh all the employees that join your company when you're a founder that were kinda
Silly enough to could I join you on this thing or whatever. It's like you were spa customers that believed in the early product that completely sucked.
Uh investors that believe like all of that.
Like
Do what you can to like when they they reflect back on it. It's like oh
Well, I smart to having having believed in Letty and uh
And what he's doing. So yeah.
That's
That is really beautiful.
Dharmesh, you are wonderful.
Thank you so much.
For doing this.
This has been a lot of fun. I'm glad we were uh we're good together.
Same. We covered so much ground. We got through everything that I was hoping to get through and more.
Where can folks find you online if they want to follow what you're up to and maybe reach out if they have questions? And then how can listeners be useful to you?
Sure. So I'm I'm Darmesh, uh D H A R M E S H.
Everywhere. Um I'm
Not only findable, I'm unavoidable uh on on the internet, as it turns out. Um
And
Follow me on social media and tell me where I'm being an idiot and what I can learn. Uh and
Tell me your favorite thing.
Leave a YouTube comment and tell me uh
Which
Lenny episodes were your favorite so I can go back'cause I've been binge watching anyway. Um
I'd love I'd love to know.
And then speaking of that, do you I know you have uh websites of your content, you have your YouTube channel, where can folks find those things?
Um yeah, if you just go to Darmesh dot com uh
That'll have links to the other places. Uh
I'm most probably most often on LinkedIn, as it turns out. Um topic for a whole other day. Uh
But
Yeah, awesome.
All right. Let you go.
Dr Mash, thank you so much for being here. Thank you. Bye, everyone.
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