Digital Entrepreneur

Hubspot – From Startup to Scaleup

HubSpot's Co-Founder and CEO Brian Halligan shares the lessons they learned growing from its first few dozen employees to over a thousand.

In this video, HubSpot’s Co-Founder and CEO, Brian Halligan talks about HubSpot’s history going from its first few dozen employees to over a thousand, and how to find and step over the “potholes” that derail growth.

He shares insights and experiences that describe the journey of Going from Startup to Scaleup.

About HubSpot

HubSpot is a leading growth platform with thousands of customers around the world. Comprised of a Marketing Hub, Sales Hub, Service Hub, and a powerful free CRM, HubSpot gives companies the tools they need to grow faster.

HubSpot Academy is a worldwide leader in free online training for inbound marketing, sales, and customer service professionals. They specialize in comprehensive certifications, singular topic courses, and bite-sized lessons for professionals looking to grow their career and business.

Video Summary

According to Brain Halligan, companies go through different phases. It’s like an S-curve. They go through the beginning which is the tough part and a challenge of can you get product market? Can you build something that another human will part at least a dollar with for. After getting some customers and the product-market fit, can you acquire some customers and get the math to work a little bit.

Can he acquire a customer for $X and get the value of at least $3X out of that, and then the next phase is what he calls the scale-up. The first two phases are kind of the startup phase. This phase is like can you pour a lot of resources into the top of my funnel and acquire customers at $X for at least three $X at scale and not break the Machine and have the wheels fall off. So, it took them probably six-seven years to kind of get out of start-up mode and they have been in the scale-up mode for the last couple of years.

The next phase in the S curve is the disruption phase. In this phase, a company will either get disrupted or run out of market. But they were lucky at HubSpot. When disruption happened, they disrupted themselves rather than having somebody do it. That’s why he believes he will be in the scale up mode for a very long time.

Before going to scale up mode, they started hiring sales and marketing people at a rapid rate, what Brian felt was jumping the gun somewhat. The reason is that most of the tech companies that become great are not run by someone from a sales and marketing background. They are actually run by product people and so he started hiring sales and marketing background people. But it costs them time and a lot of money. His advice is to get the product-market fit, get the early customers and hire one or two salespeople.

To turn a completely perfect stranger in the world into a visitor in their site, they spent four years in that mission to pull that off. What they did is opposite to what everyone else did. What everyone just did was getting very good at something and then expand it.

According to Brian, every company has to have a secret that you have to be right about something that everyone thinks you’re wrong about. He was right about a couple of things. He was right about going very wide and all in one serving businesses, building a scalable big profitable business in the SMB software space. It is very important in start-up to scale up.

Right now, it’s the world’s best time to start a company and at the same time the worst to start a company. Now one can build software compared to ten years ago. Same with hardware or prototype. These are much faster now compared to 10 years ago. The hard part now is shifting to sales and marketing. Because so products right now in the market and there’s so much choice for the buyers.

Now a company has to become a black belt in how to do marketing in a way that stands out and matches the way people buy. That’s turned out to be a long pole now. The long pole used to be building a great product and now it’s the move to how to sell and market that product in an effective way.

The thing that enabled HubSpot to skip from or move from startup to scaleup was improving customer value and improving retention rates. They made retention and customer value a team sport. They changed pricing and packaging, delivering services, and many other things. The pricing model helped a lot.

SaaS ( Software as a service) companies are going through the first challenge as can they get the product-market fit as it is hard to do and there are lots of competitors. They need a secret and they need to be able to build products. HubSpot gave a 90 percent discount for startups that are in the incubators and called it HubSpot for startups. In the second year, they gave a 50 percent discount and from the third year it’s a normal subscription again. This helped them getting hundreds of users from incubators.

Brian concludes with a critical insight. He believes marketing and sales has entirely changed, the traditional approaches like cold calling are dead. Now education, such as their Hubspot Academy courses, has proven to be the most effective way of engaging and enabling not only their existing customers but new prospects too.

Video Timeline

0:00- Introduction
0:42- Brief Story of HubSpot
0:52- S Curve
5:27- Adopting tech and reinventing product
9:55- Switching from Tofu to Mofu
14:08- Retention strategy
16:47- Dealing with feedback
20:51- Challenges for brand new staring off today
23:50- Inbound Certification

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