Letter #326: Brian Halligan and Dharmesh Shah (2014)

Cofounders of Hubspot | S-1 Shareholder Letter

Intro

More on this newsletter here.

Today’s letter is the HubSpot’s IPO shareholder letter.

Short Bios

Brian Halligan was the CEO and Cofounder of HubSpot. He is now a Partner at Sequoia.

Dharmesh Shan is the CTO and Cofounder of HubSpot, the writer of simple.ai, and the creator of agent.ai.

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Letter

Raise your hand if you know a business that would like more visitors to its website, more leads for its sales team—and more customers to fuel growth. Chances are your hand is up. We all know businesses that want to grow. There are millions of them.

Now, raise your hand if you love getting cold calls from eager sales people during dinner. Or spam emails with irrelevant offers in your inbox. How about pop-up ads when you’re trying to read an article on the Internet? No hands up? Didn’t think so. And, as it turns out, most other people share your sentiment.

The problem is that there’s a fundamental mismatch between how organizations are marketing and selling their offerings—and the way that people actually want to shop and buy.

The story behind a startlingly simple observation.

In 2004, we met as graduate students at MIT. Brian was helping venture-backed startups with their go-to-market strategy. He noticed something curious: the tried and true tactics (trade shows, email blasts and cold calling) that had worked at his previous companies simply weren’t effective anymore. Prospective customers had gotten really good at blocking out interruptive marketing and sales tactics.

Meanwhile, Dharmesh started a blog called OnStartups with reflections on entrepreneurship. The blog gained mass appeal and massive traffic, surprising us both. One topic interested us: why was a tiny blog written by a grad student with no budget able to get so much more traffic and interest than companies with professional marketing teams and big budgets?

Madison Avenue, we have a problem.

After many meetings, much coffee and the occasional wine or Belgian beer (a favorite for both of us), we came to a startlingly simple observation. People do not want to be interrupted by marketers or harassed by sales people. They want to be helped.

The world has changed dramatically: people no longer live, work, shop and buy as they did a decade or two ago. And yet, businesses still try to market and sell like it’s 1999.

Inbound: a more effective way to attract, engage, and delight.

Nothing is more powerful than an idea whose time has come.

We started talking about this transformation in how people shop and buy. We called the traditional method “outbound”—because it was fundamentally about pushing a message out, and started calling the new way “inbound.” Inbound is about pulling people in by sharing relevant information, creating useful content and generally being helpful.

The response was overwhelmingly positive and incredibly exciting. Inbound was an idea whose time had come.

Getting businesses off the sidelines and into the game.

The next question was—if the concept of inbound was so easy to understand and inspiring, why weren’t more businesses doing it? Why were millions of businesses sitting on the sidelines instead of tapping into the power of this transformation?

The reason was clear: it was too hard to get started.

There were content management systems and SEO tools and social media applications and marketing automation tools and on...and on...and on. Many of these individual tools were great—but the task of gluing them together was Herculean. It wasn’t within the realm of mere mortals.

The issue wasn’t a lack of tools, but that there were too many. Too many products to learn. Too many passwords to remember. Too many bills to pay. And, too many phone numbers to call for help. We wanted to stop the madness.

We started HubSpot with one simple goal: make it easier to get going with inbound, so businesses could get growing. One platform to learn. One password to remember. One bill to pay. And, one phone number to call. One integrated system, designed from the ground up to transform how organizations market and sell.

Culture Code as competitive advantage.

To achieve our vision of transforming how organizations market and sell, we had to attract and retain the best people in the world. HubSpot’s culture is predicated on radical transparency, individual autonomy and enlightened empathy. We codified and publicly shared our approach to this different kind of workplace in HubSpot’s Culture Code slide deck. It has been viewed over a million times, shared on social media thousands of times, and received remarkable acclaim.

Our culture is a powerful weapon in the battle for amazing people.

A funny thing happened along the way…

When we started HubSpot in a tiny one-room office a block from the MIT campus, we thought we were starting a software company. We were wrong. We had not just started a software company, we had sparked an entire movement.

We believe we’re still in the early innings of what the inbound movement can and will become, and that we’ve built a company and a community that is ambitious, crazy and talented enough to transform how the world’s organizations market and sell.

We are very grateful to our 11,624 customers, 1,900 plus marketing agency partners, and millions of fans who support our mission to make the world inbound.

Success is making those that believed in you look brilliant.

We will work passionately to make you look brilliant.

Thanks for joining us on this journey.

Cheers,

Brian Halligan & Dharmesh Shah