YouSaid · the spoken record

Dharmesh Shah

lines on the record: 126
first: 2024-04-04
most recent: 2024-04-04
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“And they literally own that. And we didn't invent this idea either. This existed long before HubSpot, but it actually works. It's like you have to decide who's going to make a decision. And that is almost the number one decision to make. And it's like, okay, don't pick people you don't 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, is, and Amazon stayed this really well.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Like most organizations, HubSpot historically has made decisions poorly. It's just all a spectrum, right? I think decisions that were the hardest things because it's hard to strike the balance. And we've evolved it over. I think we're much better than we were in our earlier years. The things we get wrong, most people get wrong. And so I'll tell you the things we get right now is that we like to be, we're very data oriented. We like to make data informed decisions, but data doesn't make decisions people do, right? So there's like, that's like thing number one. It's like, you know, you have lots of geeky founding companies or whatever. It's like, oh, we have a chart that says this. So we should go do that. That doesn't work. This will work it outside. Like data's awesome. And we also have one position that we designate to make the decision. And that is not necessarily the executive overraying that team. It's like, okay, well, so-and-so.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's flashtags.org if you want a quick way just to get to that blog post. I believe in domain names and shortcuts because I believe in some quantities there.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“And by the way, like the number of times that happens is I can count on the fingers of one hand and still have fingers left over, right? Like that almost never gets to that. Because either I tuck myself out of it, it's like, okay, and this goes to the is this a hill I'm willing to die on, right? It's like, okay, I get it. I may disagree. Is it the end of the world? You know, is it really going to do that much harm? And is the cost of kind of imposing that kind of founder card, you know, like go do this? Does happen, just not that often.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we've always had as part of kind of early manifestation of HubSpot culture, we kind of believe in autonomy, lots of companies believe in autonomy, and we tried to carry that idea as far as we can. And for the most part, we do that. And the hashtag plea is part of that, right? This is like we trust our people. We try to hire the best. Expect them to learn, and we still want them to. Have the kind of discretion to be able to make hard decisions. And we have, we call them DRIs. We didn't invent that term directly responsible individual. And we'll talk more about, we should talk more about decisions and how decisions get made. But the reason I do hashtag plea is that it's a soft way of a mandate without being a mandate, right? It's like, okay.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“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, there's just so much goodness that comes out of it. And it's not hard to understand or describe.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“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 want to 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. I have thought about this so much, like to my core in my soul, I believe this is the thing we should be doing. Please just do this. Still not a mandate, by the way, but so now it's commonly accepted. Like it's on the wiki. And I use this multiple times every day. Other people at UpSpot use it It is remarkably effective.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“The bottom hashtag is hashtag FYI. And the definition of the FYI 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 this feels like it could be a good thing to kind of explore. But hashtag suggestion means... Still don't expect a response. You don't have to do the thing I'm asking. 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. Hashtag recommendation is I've thought about this a lot”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“They'll ask you a question. And as it turns out, this is particularly true of founders. I have an opinion on everything, like literally everything. So if you ask me a question, I don't have anything will be thought out. It will be right, but I will have one, right? And so the challenge is people will kind of take that and over index on what was an opinion. And because it's inefficient to qualify every time someone asks you something or every time you put an email out there and say, oh, by the way, this is just my opinion. You can put IMHO or something like that every now and then, but then people say, oh, that's just plaguess or something like that, right? Okay. So here's what flash tags are. Literally. And I live most of my life through email, but I do this in other media as well. It's like the hashtag that we all know, but it's a discrete set of them, an escalating set of what I call the kind of dying on the hill spectrum. Okay, so here's how it goes.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so and this is exactly the problem, right? It's not just, once again, most things exist at every level of abstraction. So anyone that manages people, anyone that leads has this exact same issue. It's the megaphone issue, right? Like someone will pass you in the hall when we had offices and halls.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“And understanding the problem deeply, you come to the conclusion. You need to do more than just one thing, but then you should force yourself to have the discipline that we did, which is here's why we're going to go a little bit broad. And here's why we're going to make sure 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 going to be all in one. And oh, by the way, we're going to be the best. No, you can't be the best. You can say we solve this particular problem the best, but we're not going to have the best product along any of those dimensions.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so it comes down to. What problem you're solving? So, I think 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 falling in love with the actual problem. And you need to fall in love with the problem. And putting that constraint on yourself forces you to kind of understand and at least label and define what problem you're solving. Because oftentimes we can describe our product or whatever, but we struggle sometimes as founders to describe the actual problem. If you can make the case, which HubSpot did, it's like, okay, it's not like we immediately jumped to that, like, oh, we had this epiphany, we're going to build the all-in-one, do all the things kind of thing. We're like, oh, in actually talking to customers, because we consider doing it like, oh, we'll just do this marketing piece, we'll just do this or whatever. It's like, no, that's not their issue. Their issue is like, it's not that these things don't exist. So if you, as a result of talking to customers,”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“And by the way, and we changed that over time, right? Like in the startup world, and now I would argue that most of the categories we play in we are, as surveys would tell you, we're in the top three in each of those categories now, right? But at the time, when we were very, very resource constrained, we were trying to be disciplined and focused.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“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 or the top three web analytics tools or we have the top three whatever. Our value proposition is that everything works so well together 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 overindex on one individual category by virtue of that was one of our heuristics for being able to tell that we were over indexed on one particular aspect of it.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's like, okay, we're going to be many miles wide, and it's only so inches deep. One of the, and this goes back to very systematic thinking is like, okay, we're going to measure each of those individual product categories that we're now playing in.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Was solving for the actual customer problem that existed. And the customer problem that existed was not a dearth 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 woof warm type forum 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 SMBs, 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 kind of instinct and every advice we've heard or given says we should not do this. We should not go that broad. But once we make that decision so that the other kind of lesson learned is like, and we said this in the early years, it's gotten better since.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Have we considered this completely? Not saying we should do it, but have we considered this alternate kind of alternate path? So I would encourage you at any stage of the company, you don't necessarily have to do the Zig versus ZAG, but you should at least know what the Zig would have been and have talked it through. So that's kind of thing number one. 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. So from year one, HubSpot decided to build an SEO tool, web analytics, blogging tool, content management, all it. 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. And so it's like, okay, well, why would you do that? And the reason is that the one thing we wanted to be good at”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, this comes down to the high conviction, low consensus Fets. And so we had three things that we were. And by the way, it's not just me, my co-founder and I both have that kind of Zig versus Zag. And we ask ourselves, and we ask ourselves this to this day, right? It's like, okay, well, we understand this is the way the world moves. This is the way it's normally done.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“With the people stupid enough to stay focused on SMB or try to do that, right? It's a much, it's a harder thing to accomplish. 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 at least start there, try to make it work until it gets really, really, really painful and then try some more, right? It's like there's just so much value at SMB.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is that in software, there's what I call reverse gravity that over time the market will always pull you up, right? Because what ends up happening is that smart founders and smart management teams 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. 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 SMB world.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Common argument was like there literally is exactly one company in the history of software that's made a global brand billions of dollars of market 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. But the nice thing about it is once you figure the physics of it out because it's so hard to do, you end up, and this is played out now there's lots more proof points. There's Shopify. There's a bunch of companies that have succeeded in SMB. But one of the things about SMB is that In the software market, this, by the way, all I know is software. That's the kind of scope of my experience.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Case for SMB is you have almost the best of both worlds. 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, oh, we went from 100K in ARR to 1 million AR to 2 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 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 like, oh, we have 50 customers. If we do this and screw it up, there's 5 million more. Only intentionally screw it up, but you can experiment, right? You can take on risks. And so, by the way, like when HubSpot started SMB, it was literally like a hundred times harder succeeded SMB, right? And we could not raise capital. Like it was so hard because.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's really hard to say no, especially as a startup. All these things that go along with that. It's like, okay, we sort of know that game. At the other end of the spectrum, you have consumer startups, right? It's like, okay, the problem with consumer startups is they have very bimodal outcomes. It's like either even be super successful the next meta, the next Google, the next whatever, or it's going to be to zero, right? Like it's very rare that you have like, oh, you made a few million bucks or whatever. They could either work because there's a massive market.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“A, because it's hard, and we'll talk about that, but B, okay, so I'll tell you this quick story in terms of how we chose SMB. And so my co-founder and I met in grad school, and he had done software. 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. But one of the things we kind of, as we were kind of noodling on possible ideas of working together on the startup, we said, oh, We had done both on enterprise software before, right? The kind of opposite of SMB. And there are definitely challenges with enterprise software, right? Well documented, one of 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 have to have sales. There's all this kind of, you have revenue concentration, which means you don't completely own your product road.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“A reasonably well done system will outbeat any other mechanism that you can kind of try to put it in infuse, right? Those things kind of deteriorated over time is hard to scale them. So I'm a big believer in kind of systems and imposed constraints versus.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Have a freebium 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 going to spend 18 months implementing something. We don't have like we have to be able to support a product that's free. Like 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 self-imposting. The lesson I would kind of carry away is come up with systematic ways and mechanisms, as Amazon would call them, of putting guardrails and constraints in to the degree that you can. Because you can put words on a page and try to infuse it in 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 kind of reinforce that, which I encourage you to do. But like a really...”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's really hard. I'll say that. And things that have made it easier is 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 we impose. And we didn't know this at the time. Because we're building for SMB.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“The growth revenue per whatever, that's all of it. Now every chart that you've 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 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, I can make the case that you need to build product number two and product number n plus one over time, but you should be mindful about the cost of that complexity.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is the other cost that complexity adds? Okay, so let me, we'll come back to this. So when you go from product number one to product number two, right? It's like, okay, product number two is going to cost us this much to develop. It's going to have this risk associated with whether it's successful or not, all these things. So there's going to be this kind of carrying cost for product number two. What companies don't think through is that that is any of the maintenance of that. It's like, oh, we're going to need a team to kind of maintain that new product. Note 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 going to launch a marketing campaign. Do we spend five minutes talking about product number one and two minutes talking about product number two? How do we outlook how do we do anything? Every chart you look at in terms of the”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Once again, this goes to the kind of binary thing forces you to think about it, right? It's like versus the other mistake I think people make in product all the time, but 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 thing is like, oh, it's going to take six months to develop. It's going to be why engineers and Z designers, whatever. Second order thinking is thinking through the maintenance of that feature. It's like, oh, it's not just the first version that goes ads. Like now we have this code base that we have to support and improve or whatever. I get that. The third order thinking, which I think is the most nuanced, and it turns out to be the most important.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so on the product side in the early years, and Brian gets credit for the actual implementation of this. So we had a relatively broad product. We can talk about that pros and cons of that even in the early years. But we were solving for simplicity. And we got this from Apple. We can talk a little bit more about kind of genesis of this. So 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 knobber dialed a feature, you had to take one out somewhere else. That's a net amount of, this is a very coarse measurement, right? It's like, okay, well, no, not every radio button checkbox, dropdown, whatever menu item that you put in your nav is necessarily equivalent It's better than nothing. It's better than having no constraints. And so.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is worth fighting for. That's like thing number one is important. But the other one is that it requires fighting for. It does not happen and it will be a fight because the universe is working against you 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. We want more tiers in our pricing. We want these knobs and dials in the product. We want these more. It's like all of it tends towards the second law entropy increases. So anyway.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“You will crumble under your own weight over time. Absent some external intervention. And you see this happen all the time, right? 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, it's like just bad things start to happen, you become slower. And that's eventually a slower death, right? Because you're at more scale now. Complexity does kill companies, maybe not as quickly as other things, but much more reliably than other things. And so this is why it's never too early to kind of plant the seeds of simplicity, put them in there, make that part of the kind of culture of the organization. And we have a thing that are part of our kind of culture indicting principles around what I call fight for simplicity. It's literally those three words, right? And the message we're trying to convey is simplicity.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so 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, like molecules don't come together and form an egg, right? That doesn't happen. It's always the other way around. It becomes disorderly and more random. That's the second law of thermodynamics. And this happens in companies as well, right? And it happens in code almost every level of abstraction you will see some variation of this. And so the way I think about this is that in the early stages of a company, you're essentially fighting to survive just trying not to die, right? That's the thing. Like, okay, like priority one, don't die. In the second phase of a company, you're trying not to stagnate, right? Like you still want to be able to drive growth and be able to do things like, okay, we managed not to die because stagnation is essentially death. So we're still trying not to die. But then the third stage is your fighting complexity. And that's the thing that you...”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“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 it's 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 saved us. And then there's all other kind of side benefits to it in terms of people getting to know each other better, better chemistry. There was like lots of good upside. But just the simplicity is almost always a better answer.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Like, oh, that's cute, and that's funny. It's not going to work at 15, 20 people. It's not going to work at 50. Work to 25, worked at 50, worked at 100, worked at 200. 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 going to try to kind of optimize a little bit. So it's not completely random anymore. Now it's like within this, what we still would do it. Then we said, okay, we're not going to do it for every hire. We're going to do it every quarter. And that stood, by the way, for. Hundreds of people, that mechanism still worked, right? It's like it's.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Here in Cambridge, Massachusetts. And so we had four tiers. And the only distinguishing characteristic of the four tiers there were two chairs that were by the window, two chairs not by the window. Okay, great. Hire that first employee. Other 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 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? It's 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 he did that with employee number two, and we did it every time we hired a new employee, we would do a sage shuffle. We're going to do the lottery. We're going to go down the sequence and evolve the seats. That was the algorithm, right? And our investors were...”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Why would we do that? And so then we kind of, the output of that was like, okay, well, binary decisions are much easier than non-binary decisions. It's like, okay, like everything or nothing is much, much simpler. And then it's like, okay, well, if it works for an employee number three in the company, why wouldn't it work it for? Why wouldn't it work at five? Why wouldn't it work at 50? 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, and this applies to so many different aspects of HubSpot, but is we try to start with the simplest possible thing that might work. And then, if necessary, add the complexity, add the things or whatever. Like even our original, this is actually a tactical thing that everyone should take away, especially early stage startups. Very first HubSpot office has exactly four tables because aspirations for growth, right? We were in a co-working space back in the day.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“And one of the things that, and this is one of the kind of core, and not everything that obviously not everything was right, but not everything is kind of applicable to other companies, but there are some things that I think are. And one of the things that I think are applicable is just this need to solve for simplicity, right? It's like the simpler you can make things in the early years, the better off you generally are. So part of, and this is going to sound weird. How we wound up with transparency is not because like some moral, it's like, oh, everyone deserved to have this, and this is the truth. So it's not some moral position. It was a, when we hired the first employee, and this was both Bryanti, when we hired the first employee, we had to make the decision. It's like, oh, so what files do we give them access to? And so Brian is just like, oh, like, why, whoa, there's nothing to hide.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a strong case. And so, and then we had down to three choices. We're like, okay, well, we could have chosen to just stay firm as still no titles. We could have said, okay, we're going to have classic titles. Then I had the option on the table of make up your own title. Like you can be grand puba of X, and that can be your like. And then we ended up making a decision to go with classic titles because that actually served the need of there's a benchmark, there's a standard. Otherwise, it doesn't mean anything. So having made up titles is pretty much the equivalent of having no titles because they lack any meaning. Anyway, but that's one of those things that, okay, you sort of iterate, you change things as they go.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Why we don't have titles. I recognize this, and so they made the case of, yeah, there's value. And it's like, and by virtue of you not giving us titles, that means you're having to compensate us in a kind of economic sense in other ways, right? So you're losing out because it's like, is that value high enough to not do that?”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“When you introduce yourself, like, oh, I work in product, I work in engineering or whatever. Like I'm director of X or VP of Y because the thing didn't exist. Then as we scaled, we came to the realization that there's actual value that people ascribe to titles. And the reason they ascribe value to titles is because there were rumors that there is life beyond HubSpot. I couldn't believe it. What? There's a life out there outside of HubSpot. It's like, yeah, but then when we go to the Thanksgiving dinner or whatever, I talk to my aunt, I need some shorthands like, oh yeah, like I got promoted to director. I got like, you know, to show some progression because it's a signaling device. And in this life beyond UPSpot and outside of HubSpot, it's like other people are also going to want to know sort of where I was like, okay, and this was the winning argument. I love this argument because we had a day-long meeting on talking about this one topic. And the winning argument was, Darmeshin Bride, I recognize.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“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 forewent. So in the early years of HubSpot, we're like, okay, we believe in a flat organization. One of the manifestations of that flat organization is we had no titles in the company. Nobody had a title, right? So even though you had business cards, whatever, we have no titles. If you introduce yourself in a meeting,”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“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 18 years of HubSpot's history. We have always had all during the IPO roadshows, like, yes, we get that you've kind of an SMP. But 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 going to conquer SMB first. This is not bowling pin. This is not Jeffrey Moore. This is We are here for SMB. That's what we're doing. And so we maintain that conviction for a very long time. And that kind of helps you make other bets that are secondary.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so, yes, I can be contrarian, but you have to kind of 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 what I think of is like 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 there are other people have kind of phrased this differently. I think Peter Thiel actually says it more 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, this is the thing that, and you just happen to be right. So one of the early kind of high conviction decisions we made at HubSpot was that we were going to focus on SMB as our target market. I'll make a case both for SMB and for having high conviction better. It doesn't have to be a target market, but something. Once you make that bet.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, one of the phrases we like to use in our industry overall is this kind of notion of first principles. I don't know who popularizes it, but it's used a lot. I'm not usually a snark keeper. I'm not going to say something snarky. But I think most of the time, First Principles is used. It's actually used incorrectly because the way first principles are 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 a 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 like everyone should do this. It's like a completely core thing.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“And it's not an opt in kind of thing. And you're like, this is it. We're all in together. And it's been on. And we still do this to this day, right? Even at 7,000 people, everybody's an insider. So we can still share all the financials with everyone all the time”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“And they're like, yeah, you can do seven. And then I say eight because you do eight. And so we discovered through that mathematical induction process is like if it's true for n is it true for n plus 1 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 our downside is 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.”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Brian nor I had ever taken a company public before were like, we don't know what that is. It's like, oh, it's this kind of group of people that will have access to kind of all the financials and will note, 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 Brian says seven”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source
“Like everything. So our balance sheet, what we raise capital at whether we're going to be able to meet payroll in six weeks, all those things, everything was transparent all the time 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 non-disclosure, 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, 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. All right. So we had that transparency. And then as we go public, we have this meeting with our investment bankers and our lawyers. This is in the IPO prep process. And they sit down and it's part of this all-day meeting. One of the questions was like, okay, so who are your designated insiders?”
2024-04-04 · Lenny's Podcast · Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO) · IDENTIFIED FROM THE TRANSCRIPT · source