Interviews May 28th, 2014
I am very happy to add one another awesome marketer to my list of great internet marketing personalities: Dharmesh Shah, co-founder and CTO of HubSpot. The company, based in Cambridge, Massachusetts and has over 10,000 customers and is a two-time member of the Inc. 500. HubSpot has raised over $100 million in venture capital.
I am very thankful to Dharmesh for giving this opportunity and answering all my questions. I certainly hope you enjoyed this interview and found useful. Please leave your comments below as I would love to hear from you!
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Q. Inbound Marketing – This term is widely being used in the industry and it’s a known fact that it came into use only after HubSpot’s launch. Other marketers found it tough to rank for high search volume keywords, but Hubspot has chosen the term Inbound Marketing and it created demand for your product in our industry and now both the product and the term is widely popular.
Was this strategy planned? Or please explain any related details.
A. Although we do get some credit for sparking the term inbound marketing, it is now a widely used term in the industry. This was our hope. We didn’t want to create a trademark/proprietary term – but a general industry term that would be useful to describe the set of activities that involve growing an organization with non-interruptive means.
Q. I have seen you give much importance to HubSpot’s “Culture Code,” why is it so important and how it can something similar be implemented in new startups? How difficult is it to infuse these ethics into others who come from different work cultures and otherwise. How did you accomplish it?
A. We have indeed spent a lot of time on culture. But, most of this has been recent (in our early years, we didn’t talk that much about culture). My advice is that startups should spend some energy deciding what kind of culture they want and what kind of people would fit. Then, make sure to hire people that meet that culture.
Q. What are the challenges that you faced for getting investment for an “all-in-one” bootstrapped start-up? How much risk does one have to take when they plan for an “all-in-one” product and what is your advice?
A. When HubSpot started, the idea of an all-in-one marketing platform was not obvious. Investment did not come easily – we had to demonstrate that there was a big potential market for this. Although our strategy worked for HubSpot, generally, I don’t advise entrepreneurs to take that broad of an approach. In most cases, startups are better off at focusing on one thing and doing it very, very well. It’s just that in our case, the problem we set out to solve wasn’t a “point product” – but a platform.
Q. Marketing vs. Product Development – which one you have invested more and please share with us the breakdown.
A. We invest heavily in both – but the ratio varies from year to year based on what kind of projects we have going on. Most of our marketing investment is in inbound marketing – so we have a lot of content creators and conversion experts that help us generate leads for our sales team. On the product development side, we continue to grow that team every year as we are constantly building new things and making our existing products better.
Q. Why didn’t HubSpot target big agencies by offering a white label product?
A. Ever since we started, we had chosen to build a “direct” product (rather than white-label). Though there’s certain an opportunity to build a platform specifically for large agencies o white-label for their big customers – that’s not a market we were interested in.
Q. I use HubSpot and I think it offers complete marketing automation, but I personally think it somewhat lacks marketing intelligence. What are your plans to provide marketing intelligence metrics like predictions or insights for the data collected?
A. You’re right. We have an opportunity for improvement here. Though we understand the potential value of this, our challenge has been that other things have taken priority. But, we discuss this regularly and one of these times, I’m going to win those debates and we’ll get this onto the product roadmap.
Q. Have you received any valid feedback on your leadership style that you adopted? If possible, please share something with us.
A. The most important feedback the management team at HubSpot gets is the quarterly survey we do of all of our team members. They provide candid feedback regarding what they like (and don’t like) about working at the company. We take that feedback very seriously and try to fix the repeating problems.
Q. What kind of pricing strategy did you adopt in beginning and how you evolved in that aspect?
A. IN the beginning we had a very simple pricing model: $250/month. Over the years, we added additional “tiers” of product. Finally, we added a variable component to our pricing model (so that it could scale with the level of value the customer was receiving). Pricing has always been a difficult thing for us. We’re still not sure we have it quite right.
Q. Please name some companies that have inspired you and why.
A. I’m inspired by many different companies, for different reasons: Amazon – love their bold vision and ambition. Salesforce.com for executing so brilliantly and building a multi-billion dollar SaaS company (the first of its kind). Dropbox for elegantly solving a big problem for millions of people. Apple for its maniacal focus on the customer experience (not just the product experience).
Q. How do you maintain a work and personal life balance?
A. Poorly 🙂 . Like many entrepreneurs, I’m maniacal about work and don’t take breaks as often as I should. It’s just in my personality. But, since becoming a father, I’ve gotten a little better. Raising a child is a lot like growing a startup. Hard – but rewarding.
I was very honoured to have a chance to interview Dharmesh Shah. Please leave your comments below as I would love to hear from you!
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