Near Death Accidents, Hitting $1B ARR, and Selling Like the Grateful Dead with Brian Halligan, Founder & Executive Chairman of HubSpot
Sam: This is kind of like a movie, right? So guy builds huge tech company, becomes billionaire, has life- changing accident, changes everything, gives it all up, explores the world, and becomes a monk. You've never met Shaan, right?
Brian Halligan: No. I have not.
Shaan: No. If you say something you don't like, you can just fire Sam, and that pretty much takes care of the whole thing.
Brian Halligan: I love that.
Shaan: It's the podcast. It deletes the recording.
Brian Halligan: I've always wanted to fire Sam.
Shaan: Exactly. And okay, so you listened to the first... The very first episode or just a random episode?
Brian Halligan: I ripped through a couple of little random things. I heard you guys talk about the Wright brothers and some random shit.
Shaan: So you probably... And from that random stumble, describe what you heard. What kind of podcast is this?
Brian Halligan: It's a podcast for entrepreneurs to get inspiration and ideas. Yeah. It sounds like... By the way, I'm not being condescending. I thought it sounded great. What I heard, it sounded great. Kind of like something I would listen to.
Shaan: That's what I was going to ask you. Is this something you would have... Earlier in your entrepreneurial career, let's say.
Brian Halligan: Yes.
Shaan: Because now you're now you're now you're Mr. I've made it. You don't need that inspirational juice anymore, or maybe you do. I don't know.
Brian Halligan: Never enough. Never enough inspirational juice.
Sam: Look, he doesn't listen to podcasts like ours, Shaan. He just buys them.
Shaan: Most people listen. I purchase.
Brian Halligan: So one thing we can... I don't know what you plan on talking about, but one thing we could talk about that might be interesting is my snowmobile accident.
Sam: So we're live now, so we're recording now, so yes, we could do it. So what we'll do, I'll ask you about that. I want to know about that. And then also we're going to talk to you about some different business ideas. And I've got a few that I want to ask your opinion on.
Shaan: Let me do the super short intro. This is Brian Halligan. You were the CEO of HubSpot. Now the chairman or exec chairman or something very fancy like that?
Brian Halligan: Something fancy like that, yes.
Sam: And you basically, I think like two weeks... So basically HubSpot bought The Hustle, my company, and like two weeks after you got into a really bad accident, right?
Brian Halligan: Yeah.
Sam: And you broke like a dozen bones or... I mean, it was pretty serious. I was like, I hope Brian's okay, but also I was like, if this deal, if this would have happened like two weeks before the deal closed, I wonder if that would have changed anything.
Brian Halligan: Yeah, because I was a big proponent of the deal. I was really happy we did it. I'll tell you the whole story. It's a little dramatic.
Sam: Yeah, go.
Brian Halligan: I'm just going to go. I was snowmobiling up in Vermont with my son Luke, and we were right in the middle of nowhere, right square in the middle of nowhere. And we were cruising along, and he was cruising along, and I asked him to slow down, and he just kind of got confused between the gas and the brake. And he jammed his finger on the gas and he just panicked a little bit, and we basically flew off a cliff and landed on a tree. And I don't remember... Neither of us actually... He's 17. Neither of us remember the accident at all. And we were both passed out before we hit the tree and passed out after. So we're both lying there in the snow, passed out. I wake up first. I wake him up. And we are banged up. It's like a cartoon. Our arms and legs are... We're a mess. And I thought, this is it. It's 4: 30 in the afternoon. It's freezing cold. We're in the middle of nowhere. No one knows where we are. We're going to die tonight. And I reached into my pocket and grabbed my phone thinking there's no way there's signal. And I had three... I had enough signal. I called 9... I never called 911 in my whole life. Called 911. She picked up. I roughly described where we were, right square in the middle of nowhere. And then they call in the troops. And the troops in Vermont are volunteer firefighters. They're not professional EMTs and ambulances and stuff. And it took them about an hour. And one interesting thing that happened is they came... Well, one guy who found us came from below us, and he marched up the hill, and he's yelling, kind of yelling for us, and we were yelling back. And he finally got to us. He starts asking us questions. He says," Wait. Are you Brian Halligan?" I'm like," Yeah." He say," Hey, I'm Joey. I'm the guy who plows your driveway."
Shaan: Oh, wow.
Brian Halligan: I was like," That's a volunteer firefighter." And they are bad asses these volunteer firefighters. So they strapped us to sleds, pulled us straight up out of the ravine back onto the trails, and then helicoptered us to the hospital. And-
Shaan: When you're laying there, are you just in an incredible amount of pain? What's broken-
Brian Halligan: Incredible amount of pain.
Shaan: what broke? What was broken on your body?
Brian Halligan: I broke 12 or 13 bones, but my... I could show the pictures, but my left knee, my left knee, my tibia, my femur and tibia broke. My right wrist broke. My left elbow, trash. My right, left shoulder, trash. And then my... I already had a lot of loose screws up top, and now those screws got even looser.
Sam: You had a concussion or something?
Brian Halligan: Yeah. I had a concussion.
Sam: And your son?
Brian Halligan: I hit the tree so hard, I broke my helmet.
Shaan: Oh my God. And what about your son?
Brian Halligan: He was banged up too. He broke his femur, which is a terrible bone to break. And he broke his knee and he got a concussion. So he was banged up.
Sam: And you had to cut them out of the will, I mean, after that accident.
Brian Halligan: He's doing great. I mean, he's 17, so he bounced back fast. He was at soccer practice today and stuff. So he really, really bounced back. I'm-
Shaan: You're sitting in this chair. It looks like... You're not in a wheelchair, just for the people listening. You look like you're fine.
Brian Halligan: No, no, no. I was in a wheelchair for three and a half months though. A good, long chunk. I can walk. I can drive. I can do a light hike. My brain is a hundred percent. I'm fine. I think my brain is actually better.
Shaan: And what percentage of you sort of attributes this to The Hustle deal? The timing, it's pretty coincidental.
Brian Halligan: It was the adrenaline from The Hustle deal. That's the whole thing.
Sam: So basically, I don't know, HubSpot at this point is maybe... I forget the market cap today. Maybe in the 30 billion range. Revenue, north of a billion. Employees at like what? 2, 500 or 3, 000. So we're talking a really big company at this point. But you had been the CEO from the beginning, and after this accident, you removed yourself. You replaced yourself. And now, you're the executive chairman. Did the accident... When you're having this near death moment where you're like," What am I doing with my life?" Was it like a crisis like this, like when you were done?
Brian Halligan: It's a perfect question. Lying there in the snow and thinking I was going to die, I thought to myself, self, how was your life? Are you proud of it? Are you enjoying your life as you're thinking about it a second time? If you live, what do you want to change about your life? It was sort of a reset button for me. And I think over time, as I look back at the accident, it may be the best thing that ever happened to me because I made a lot of life changes since then that-
Sam: Like what?
Shaan: What sorts of changes?
Brian Halligan: I broke up with my girlfriend of a couple of years. My whole life was HubSpot. I really didn't spend any time on any other causes. Like, I'd write a check. And so I went on a kind of a broad search for a cause that I could put my energy and some cash into. And I found one that I fell in love with. It's called the Woods Hole Oceanographic Institute. It's like the Harvard of the ocean.
Sam: Yeah, I've hung out there a bit. Right next to Coffee Obsession, that coffee shop down there at Woods Hole.
Brian Halligan: Exactly. Exactly. And what got me about the Institute besides the fact that I live near it and knew nothing about it despite living here for 10 years, was a blatant optimism amongst the scientists on their ability to slow and reverse climate change, leveraging the ocean in a sustainable way. It really caught me by surprise as I was walking the halls and getting to know them. There's a lot of optimism and there's a lot of stuff on the lab there that they think can scale on a global level. So I picked them, and I'm on their board, and I'm doing a lot with them these days. That's been very exciting. So yeah, I've done a lot of different stuff. Like now, I used to work out sort of casually. Every day I'm like, get my heart rate up into the 160 daily. I'm not screwing around anymore. I want to live a long, healthy life. I'm 54. I'd like to live a long and healthy life, and I don't want to be an old man when I'm 70. I want to be a very vibrant 70 year old.
Sam: All right, today, I want to give a quick shout out to another podcast on the HubSpot Podcast Network, and it's called the Goal Digger Podcast. That's Goal Digger, not Gold Digger. I know I talk funny. But it's a wonderful podcast. And on the Goal Digger, Jenna will give you all types of stuff on how to discover your dream career with productivity tips, social strategies, business hacks, inspirational stories, and so much more. She's got some wonderful episodes that give you the behind the scenes of turning a side hustle into a full- time job, take tax strategies for your personal brand to grow your business, and achiever's guide to burn out on balancing happiness. So listen to the Goal Digger podcast. Again, goal like I've got goals to achieve something big. Get it? It's a good name. The Goal Digger Podcast, Not Gold Digger, the Goal Digger podcast wherever you get your podcasts. Check it out. What have you been reading since your accident? Did it put you down this different path of learning, and you're like," Okay, I want to explore this path or this spiritual thing or this giving thing?" I don't know, like a different trajectory?
Brian Halligan: Initially, it was like lock yourself in a room and keep it dark and don't read and don't see anything when you've got a-
Sam: Concussion. Yeah.
Brian Halligan: Yeah. I read random stuff, but I'll tell you one thing that surprised me is when you have a concussion, I had a neurosurgeon helping me. I had a shrink helping me. I had a shaman come and visit me. I had all kinds of people consulting me on how to recover from a concussion. And from the neurosurgeon to the shaman, they all said to do one thing. What do you think that thing is?
Brian Halligan: Meditate.
Brian Halligan: They all were just like," You got to meditate. That's the way you're going to get through it."
Shaan: Were you a meditator before?
Brian Halligan: I was not. I never really meditated... Or I tried and I was just so bad at it, I gave up. And so, yeah, I'm a pretty big meditator these days. So I'm just looking right here at the books I'm reading. One of the books is Becoming Supernatural. I'm not sure about it yet. I'm only through chapter one, but it's basically a meditation book. I'm taking a class on Vedic, I'm not even sure I'm saying that right, meditation next week because I want to get better at it. It just seems like it unlocks a lot.
Sam: This is kind of like a movie, right? So like guys builds, I don't know if this is true or not, but guy builds huge tech company, becomes billionaire, has life changing accident, changes everything, gives it all up, explores the world, and becomes like a monk.
Shaan: Saves the ocean. Starts to meditate.
Brian Halligan: A monk. I don't think that this could happen.
Sam: But this is like... This is a movie, right? This is how it's going to happen.
Brian Halligan: I'm not going to become a monk. The other thing I would say is I'm still involved with HubSpot. So I'm still... Today I've had four HubSpot calls, so I'm very much engaged with HubSpot. I'm just not engaged in stuff I don't like to do. I don't like doing one- on- ones with people and doing performance reviews and talking about their salary and stuff like that. I'm not great at it, but I'm able to work on the product stuff and the vision stuff, the stuff that really motivates me. So it's really worked out. But I'm still very busy with the HubSpot stuff.
Shaan: And I always wondered this. When I was at Twitch, Emmett is the CEO. He was the original founder. Right? So he's like 10 years in, and he basically went from starting the thing with two or three buddies basically, to okay, 2, 000 employees and whatever, millions and millions of users. And for a long time, his thing was like," Yeah, I'm not the professional CEO manager type. I'll get coaching there so that I'm not awful at it. But I'm great with product and growth and I'm going to..." There was like this perpetual candidate search for a chief product officer that somehow was never getting filled. And it's like, everyone knew it's because Emmett loves to do it and is great at it, and it's like-
Brian Halligan: I see. I had a little of this. Yup.
Shaan: I think it's pretty common to do, for this to happen, where the CEO is like," Well, that's the thing I like. Don't take away the one thing I like when there's like, the rest of it is just firefighting and politics. I'm not super into that bit." And then eventually found, when I was there, found somebody who was a really good product leader and engineering leader, and basically over that year, I saw that person take more of that role. And then I was like," All right, Emmett, what are you going to do now?" And he was like,"I'm going to work on the vision and the long- term strategy." I was like,
Brian Halligan: What's that mean?
Shaan: "Yeah, but when you wake up, what do you do? You just sit there and'I'm going to think about the vision right now.'" It's like, that's such a weird, what do you do day to day? And I never really understood what that meant. And so when you say," I think, I work on the vision and strategy now," you wake up, what the heck do you do?
Brian Halligan: So today there was a bunch of emails back and forth between Dharmesh and I about what's HubSpot look like five years from now. So literally I woke up thinking about exactly that. How it turns out.
Shaan: And so you're-
Sam: So you're doing like... It's like long- form writing. So you're just like writing out... You guys are just... it's like basically a email brainstorming session?
Brian Halligan: Yeah. It wasn't even that long form. It was just emails back and forth, and just different product ideas in different areas we could go into. And then I read a lot. And so you guys probably saw that Amazon came out with like a billion new products yesterday that looked kind of interesting, actually. It's just amazing how much new stuff they had and how well it tied together. I think that started the thread, like holy crap. It's a lot of innovation coming out of that company. And yeah, there's a lot of R& D in there. But it's amazing the amount of innovation coming out of there, and I think that sort of started it.
Shaan: By the way. Did you see this Infinidash thing that came from Amazon? You guys see this?
Brian Halligan: No, what is it?
Shaan: So AWS, so Amazon launches all these different products, and somebody said, somebody basically on Twitter goes, they go," Oh my God, AWS Infinidash looks like a game changer." And I think Werner Vogels, who's one of their-
Brian Halligan: CTO.
Shaan: ...chief Scientists, yeah, CTO types. He tweets out like," At the# Infinidash event tonight, blah, blah, blah, celebrating." And it's a fake product. There is no product called Infinidash. It was just like a meme, but people started meming it into existence. So someone immediately responds, they go," I'm buying Opendash. io so I don't get locked into AWS as an open source alternative to Infinidash."
Brian Halligan: Oh my God.
Shaan: And then Signal, the big messaging app that has like 50 million users, was like," We're hiring an engineer with an emphasis on Infinidash lifecycle management." And then there's YouTube videos of Infinidash demos.
Brian Halligan: Nice.
Shaan: And people were like,"I'm an Infinidash consultant." And it just took on a life... If you knew it was fake, you knew, but everybody kind of played the part and a whole bunch of people thought it was real.
Brian Halligan: That's awesome. That's awesome. That's awesome.
Sam: Brian, I saw this graph. I think it was from Dharmesh at a talk at Saster. And the graph was pretty amazing. It was like maybe HubSpot's first five years of revenue. And I'm almost positive, I was trying to read the graph, and it wasn't all marked out clearly, but I'm almost positive it said something like," In year three, you already had 6 million in ARR." Is that accurate?
Brian Halligan: I doubt it.
Sam: Too low or too high? And it was like-
Brian Halligan: Too high. Too high. I would say the thing about SaaS businesses that's fascinating is it takes you approximately forever to get to 5 million in ARR. But once you get to 5, 50's like bam. It's tomorrow.
Sam: That's what I thought. But-
Brian Halligan: It took us a long... No, I think you're misreading that graph. It took us a long time to get to 5 million in ARR. It took us a long time to get to a million.
Sam: How long did it take?
Brian Halligan: I forget, but it's... We had a lot of churn in our product. We've turned into a product- centric company, a design- centric company, and a customer- centric company, but it took us a long time to get there. And so we had lots of customers coming in, but we had lots of churn in those early days eating away at our growth. So it took us a while. It took us it felt like forever to get to a million I remember, and then forever to get to 10. And then all of a sudden, bam, a hundred, then bam two. It started happening fast. And even now, we got to a billion and it's starting to happen really fast now.
Sam: Well, and your first... There was the joke was-
Brian Halligan: I actually disagree with you. I think Dharmesh maybe squished that graph a little.
Sam: Yeah, I could have read it wrong, but for some reason I was like," Wait, they hit something. They hit like 15, like something like a mile-
Brian Halligan: No. We didn't break any records on that shit.
Sam: Well, and he made a joke. He was like,"The first five people on the team were Brian, who was an MBA salesperson, and then another marketing guy, another salesperson, and then another operations person, and then me who was a technical person, and I actually had to build the thing." And they're like," This combination is a horrible combination for an early team, yet somehow it kind of worked."
Brian Halligan: I actually, I think his point on that was the early team was a bunch of people we knew from Sloan that we got MBAs with, people we thought were super sharp. They started them as contractors and then we hired them. And that in a lot of ways, that was good, and in a lot of ways, that was bad in the early days of HubSpot. There was a lot of pluses to it and minuses to it. The first person, the first... Very few people know this, but the first version of HubSpot was built by Dharmesh and these two guys in Egypt that he found online-
Shaan: Like Elance.
Brian Halligan: ...and Farmaui, and I forgot the other guy's name. And they built the prototype of... Those three built the prototype of HubSpot. And here's how HubSpot worked in the early days. All day long, I would be using the product, demoing the product, pitching the product, and using it to run our marketing. And then at the end of the day, I'd write up," Here's the 10 most important bugs I found." And then at night, Dharmesh is a night owl and those guys were obviously working at night because they're in Egypt, they'd fix all 10 and create like 50 more. So it was just a constant whack- a- mole that first year. And then we hired a guy, a kid from Yale who was a, he was a poly sci major, but he was a computer scientist on the side and he was really good, named Patrick Fitzsimmons, and he joined the team. And then we started getting going. And then we hired a guy from MIT who ran engineering. And then we hired a guy that ran Dharmesh's last company. He was an engineer. And then we really started cooking. But that first version was written in Egypt of all places.
Shaan: Wow. And when we think, like I think about-
Brian Halligan: Who's UpShot? What's the name of that company? Upshot? What is...
Shaan: The outsource-
Brian Halligan: When you could outsource your dev projects? Not Fiverr. What's the other one?
Shaan: Like oDesk. oDesk Or Elance or Upwork.
Brian Halligan: Upwork. It used to be called Elance.
Sam: Elance. Yeah, Elance.
Brian Halligan: We found them on that. And that's how this-
Sam: You're kidding me.
Brian Halligan: No, no. He found them on that. That was crosstalk-
Sam: That's crazy. That's like... I heard stories about a friend who was early at Uber and they used to... This was a secret that they didn't tell a lot of people, but one of the co- founders of Uber is Mexican. Oscar, he's from Mexico. I forget his last name. Oscar Salazar or something like that. And they used to make jokes that like some of the early code was in Spanish and they couldn't fix it. And I was like," Why? What's going on?" And he's like," Well..." Apparently, just like you don't think about it, but Uber was just like any other small business that didn't have any money. And one of the co- founders was Mexican, and he lived in Mexico, and they had their peers or friends, it was like contractors that they could only afford, make the early Uber code. And there was this joke that a lot of the early stuff was in Spanish and they couldn't fix it. And so it's kind of funny to hear that same story.
Brian Halligan: It's funny you say that. You don't ever think of Uber as like a struggling little startup with no money, but everyone starts that way. Except for today, there's so much money sloshing around people don't start that way. They start with like 5 million bucks in their bank account.
Shaan: The Uber guys had money. They just thought of it as a side project. They didn't think of it like,"This is going to dominate the world." They thought of it like," This will be cool. We'll roll around in black cars in San Francisco and not have to worry about taxis."
Sam: I don't think they had that much money. I know Travis had an exit, but I don't think that they were like rich.
Shaan: But Garrett through StumbleUpon, right, he had done well. He had done enough for-
Sam: I don't think they were rich enough that they could put$ 3 or$ 4 million into a business before it really was, they knew it was going to be worth it. I don't think they had total-
Shaan: Those guys are hyper- connected, right?
Brian Halligan: Sure.
Shaan: Like they sure they can raise a seed round if they needed to.
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Shaan: So we were talking last episode about this company called NerdWallet and the NerdWallet story, the part that's relevant, it's basically it's a big finance kind of like blog basically. And they make a ton of money because they've ranked at the top of the search engine for best credit card, best credit card for business, whatever. And they get a bunch of, they make like a hundred million dollars off that referral essentially at the end of the day. But they got there by making great content. And it was like tortoise and the hare. Everybody else was just trying to farm as much content as it could. These guys are trying to do quality content. And for two years, they're sitting in their apartment just banging away at blog posts and the traffic really wasn't... It wasn't impressive. And I was telling Sam, I was like," If I had started this company, I would have pivoted 10 times by then. If I was advising them, I'd be like,'Guys, look at the data. This is not working,'" but they had a lot of faith that they sort of kept going. And there's these like perseverance story. And then hear these other stories that are like," Well, we tried the thing. We saw this thing over, so we made a shift in strategy. And these like inflection points are the hardest thing because as an entrepreneur, you never know which one... Is this one of those moments where I should be persevering in spite of the data, or should I be taking the signals and making a dramatic shift in what I'm doing, pivoting in some way? And I think everybody has... I look back at any startup I started. I see multiple moments where maybe I made the wrong decision, maybe I made the right decision. It's very hard to think because you never know what would have come out the other side. When you look back at early HubSpot, are there any moments like that where either when it was not working and you decided either to persevere or shifting your strategy, shifting your, while you guys were doing something?
Brian Halligan: Yeah. There've been two big pivots in HubSpot's history that people don't talk about. The first pivot was about six months in. We were building a general purpose platform for legal firms. We call it LegalSpot. This is probably something where we were still in business school, but we were spending time on it and we had a prototype of it. And we would go to law offices and we'd demo it and try to get people excited about it. And they weren't super psyched about it, but there was a little piece of it that was around grading your website and around SEO that the law firms got excited about and got excited about the lead gen piece. And we stuck with this LegalSpot idea for a really long time. And we were just getting very mediocre feedback. And finally, Dharmesh and I were like," Why don't we just work on that one thing they keep asking us about?" And so we killed LegalSpot and we built WebsiteGrader when we built the lead generation system. And then we killed the idea of verticalizing it and went horizontal and sold it to all our friends in startups, basically. So that was the first huge pivot we had was giving up basically on the original idea. And the reason the original idea was there was when we were in business school, they put you in little pods for stuff, and there was a woman in our pod who was terrific, who had started a company in the legal space and convinced us there was something really there. And she might've been right if we stuck with it, but we ended up pivoting away from that. And she ended up not joining HubSpot. The second huge pivot we had is we were a marketing app software company. I mean, we started as a web 2.0 company back a hundred thousand years ago with SEO and blogging and social media, and we were good at helping people get front page of Digg and Reddit and StumbleUpon, shit like that.
Sam: Wait, that was the service, was that you were good at getting people on top of Digg and Reddit?
Brian Halligan: We were good at helping people turn strangers into visitors on their site with no advertising money. So start your blog, get good at search engine optimization, start a Twitter inaudible, get going on Digg, get going on Reddit, and start building credibility there. And so create these channels into your business basically. That's how HubSpot effectively started. But we were SEO geeks at heart. And then we moved into marketing automation, which was an obvious move because everyone was buying HubSpot, but then they'd buy Marketo or they'd buy Pardot or they'd buy one of these other platforms. You're like, they'd spend a lot of money on it. We're like, we have to get into that business. And so we moved into that business. But the big pivot was when we said," We're not a marketing apps company anymore. We're a CRM platform company." And then we really turned ourselves on our head. And we made that decision about seven years ago, and that turned out to be a very, very good pivot for us. And we're still in the middle of it. We have so much more work to do on our apps and so much more work to do on our platform. It really works well. Our customers love it.
Sam: You were talking about... Oh, I know what I was going to ask. When you guys were early on, when did the company launch?'05?
Brian Halligan: Well,
Brian Halligan: I don't know when we launched it. That's when we officially started it. I actually, we never really launched the company. We just kind of started it.
Sam: When you were doing that, you're a behemoth now, but what percentage of it do you attribute to you just picked the right idea in a huge market and had fantastic timing and you got pulled to success, compared to you made the right decisions and you're smart and talented and skilled? I mean, what percentage of that came down to it was just we got lucky that we saw this early on and it worked out that we just stuck with it, versus we're real good.
Brian Halligan: Healthy, good. Healthy dose of both, or a very healthy dose of both. The thing we saw and the thing that anchors me is I just watch the way people shop and the way they buy and the way they evaluate products. I'm sort of like a little bit of an anthropologist. So watching people buy stuff. And I noticed two things were going on. First of all, all the marketing stuff that I had done my whole career, whether it was emailing, doing email marketing, or was advertising, or cold calling, or any of this, didn't work because people had caller ID, they had spam protection, they had ad blockers. Like it's broken. And at the same time, people no longer were going to like IDC, and Gartner, and all this stuff. They were reading blogs and they were reading articles on social media and they were going to Google. And so those two things just clicked inside our head and like, there's the transformation that needs to happen from this very old school, outbound, interruption- based marketing to this new school, inbound marketing. You have to match the way you market to the way people actually want to shop and buy. And the nice thing about it is your success in that new type of marketing was much, much more about the width of your brain than the width of your wallet. You didn't need a lot of money. And so we initially sort of targeted small businesses. We moved up to larger businesses these days. But that's sort of how it got going. And we, it turns out we were right about that. And we were early on that thesis. And I remember there was a decision point in the early days of HubSpot. We were starting to get traction. It was starting to go, and we were unsure, is this going to be a big company? Is this going to be like the two of us are going to fund this? We'll do some angel thing, or is this going to be a go big or go home? And I remember looking at him at some point in time. It was like, we're right about inbound and other people are noticing we're right. We got to raise a lot of money and go fast because people are going to start copying us. And people did copy us like crazy. And so at some point we sort of flipped the switch from we got a little business. It's going pretty well. We may have 50 people. We might end up doing a lot of services, to no, we're building a big software company. And it was the realization that we were early and right about this idea of inbound.
Shaan: And one of the reasons people love the pod is because we started off with kind of like what we're doing a little bit now, which is interviews with people who are successful. Say," Hey, how'd you do it? What'd you do? What was it like?" And somewhere along the way, I just said," Hey Sam, let's record an extra episode on a Friday." What I really wanted to do was help him promote Trends. And I was like," Let's just talk about trends. Let's talk about what are some opportunities your research crew has found and let's just shoot the shit about it. It'll sell some Trends subscriptions and it'll be, I think, interesting. It's like how we talk offline. Let's just record it." And what that started was a lot of the podcast now is basically brainstorming and just shooting the shit about," Well, today here's what I see as some opportunities. Maybe I'm not going to do them because I am already doing two businesses and my hands are full, but if somebody is out there looking, I think this is really interesting. This is where I would be sniffing right now." And so I don't know if that's hard for you because you're so consumed by a large company.
Sam: Let me ask it a little bit differently. So earlier, you had this thing called LegalSpot. Now you guys are just, you're HubSpot, which is the CRM for like any business ever. But I see a lot of companies pop up that say they are the HubSpot for X. So you said you started as LegalSpot. Now, there probably is like," We are HubSpot just for the legal industry."" We are HubSpot only for dentists."" We are HubSpot only for doctors," whatever. What do you think about those? And if you're not a fan or you don't think that they are necessarily going to have legs, which industry do you think could have legs where you could have a HubSpot for X that you guys just simply can't meet because their needs are so specific?
Brian Halligan: As soon as you brought this up, I was like, there's an infinite number of opportunities for people to build stuff on top of HubSpot that's vertical specific.
Sam: Round from Founders Fund. Or something like that. Like a Tier 1 VC. This OrgChart thing actually, it's crosstalk to it. Yeah.
Shaan: On one of the very first brainstorms when Daniel Gross joined, we had brainstormed this because I had said," It's so hard to know who the heck is who inside companies. [ crosstalk 00:33:50-
Brian Halligan: And LinkedIn has become impossible to navigate.
Shaan: Exactly. And we said, this is a wedge to build a new style of LinkedIn. LinkedIn basically took all... Said," We'll take the resume and then we'll create basically the social network on top of this database of resumes." Well, why don't you create this database of org charts, get people to crowd source. Because I think people like to say," Here's my hierarchy. Here's where I am in the hierarchy." So people are willing to fill it in for their company, and you can crowdsource that, and then use that as like the basis of a new style of LinkedIn. I think that's what these guys are doing almost to a tee.
Brian Halligan: I think LinkedIn is... There's certain companies that I think are ripe for disruption. I think they are. That OrgChart Hub thing is cool. The company who I bet is kicking themselves is the... You know The Information? Do you guys subscribe to The Information?
Sam: They have an org chart thing.
Brian Halligan: They have an org chart thing that's awesome, by the way. I bet they're kicking themselves they didn't spin that out into a company and raise venture for it and crowdsource that because it's very good. I refer to it often, actually.
Shaan: That's the media company DNA though. All right. So what about non- HubSpot related? If you were 21 today and you're thinking about business ideas or you just graduated business school, like when you started HubSpot, what would have your fascination, your curiosity, where would you be building? What opportunities have you seen that you're like," Okay, if I had a clean slate of time, here's where I would go, what I would go for?"
Brian Halligan: I like to think about the big trends and then sort of zero in on, okay, what's an idea on the big trend? So I just think just the most ginormous trend that's going on, and I saw it in HubSpot's board meeting last week. So I've been out for six months. I went to the first board meeting. We had an hour- and- a- half discussion about the environment. And we have this whole chart on how we eventually want to get to a zero carbon footprint. Every board meeting in the world is having that same conversation, and that's a hard thing for companies to pull off. And that's just the beginning. At this point, Europe sort of taxes carbon. The US doesn't tax carbon. Eventually the US is going to figure that out and tax carbon. I just think clean tech, ocean tech, there's going to be trillions of dollars made in that industry.
Sam: Explain that from a big company's perspective because I've never... Our business was much smaller than HubSpot, and so like when I thought about climate change, I'm like, yeah, that's important to me as a person, but my business, I'm just trying to make payroll. I can't even think about that at the moment, like how my company fits into that. You guys are much bigger. From your perspective, what does that mean? You're willing to spend money in order to do-
Brian Halligan: Oh, we are. We're spending huge money.
Sam: So, yeah. Tell me. Well, how much are you spending and what are you spending that money on, and what's the motivating factor there? Is it like a dollar and cents thing? Is it to look good? Is it to feel good? What's the motivating factor there from a buyer's perspective?
Brian Halligan: I think fundamentally, it's a moral issue for HubSpot, its board, and its leadership team, and we all are behind it. Even if you didn't moralistically believe in that type of stuff, your employees are going to force you to do it. Your investors are going to force you to do it. Your customers are going to eventually force you to do it. So you don't have a choice if you're a company HubSpot size, or even a little bit bigger than where you are, Sam. Eventually your employees are going to be like," What are we doing about this?" They're eventually going to be asking you about it in your group meetings. And so what HubSpot's done is we've tried to lower our carbon footprint as much as possible and get our energy now through wind, fund sustainable projects like forestry projects, river projects, renewal projects out there to offset some of the energy we consume. Changing policies to consume less carbon dioxide. So at this point, we're at zero from the beginning of HubSpot, but we want to consume far, far less. We don't want to be buying offsets.
Sam: How are you tracking how much... How do you track that? Is there like a dashboard? I mean, I'm totally-
Brian Halligan: It's very hard to track, and the companies who are trying to track it are the same, are like your auditors, like a Pricewaterhouse and people like that. And there's no great way to track it. So it's a big business opportunity. There's a bunch of people working on measurement systems. Our measurements are horrible on global warming beyond just the aggregate temperature of the globe. Like measurement systems of the tides, and you tell that measurement to the insurance companies so they know when the big storm is coming, and getting really precise about that kind of stuff. Systems to measure the salinity of the oceans, the temperature of the ocean, the temperature of the atmosphere, and using all that information to input to the carbon exchanges that happen in Europe, and hopefully globally someday. There's going to be a whole stock... Where you think there's a stock market. There's a commodities market. There's NASDAQ. There's the New York Stock Exchange. That's going to happen for carbon. And think of all of the businesses that happened around that marketplace.
Sam: There's this company right now that I see being advertised everywhere. I think it's called Aspiration. And basically... Have you, Brian, noticed that there's all these new credit card companies coming out?
Brian Halligan: Yes.
Sam: Basically what they do, I'm kind of dumbing it down, but I believe this is exactly how it works. They just partner with MasterCard. MasterCard typically takes 1% of the purchase price from the merchant and makes money that way. MasterCard then says," Hey, if anyone starts a new credit card system and you're able to convince these people to sign up, we'll split that with you." And that's kind of dumbed down. And there's this new company called Aspiration, I think it's called. And we predicted this on Trends. Shockingly, this is something that we nailed way before this company came out, and it's called Aspiration. And what they do is, and I have no idea how they do this, but whenever you make a purchase, it tells you on your phone how much carbon it used or what the impact on the environment was.
Brian Halligan: That's cool.
Sam: And when I heard about this, I'm like, I don't buy this. I can't believe someone... I care about this stuff, but that's just amazing that someone's willing to switch credit cards just for this reason. Because switching credit card's a pain in the ass. And these guys, I think they've raised over a hundred million dollars, and they've attracted so many new customers just on this idea. And it was shockingly interesting. I never in a million years would have thought that that would take off like it did.
Brian Halligan: This is a huge, huge trillion- dollar industry. It's going to be the... Software industry is a huge industry. Biotech's a huge industry. This is going to be a giant industry, and there's lots of ways to get at it. But it's a different model. It's not just hacking together something on the weekend, testing it, and then iterating on it. It's a little different.
Shaan: So if climate is a trend, a big trend, a big wave that you believe in, what are some things that you see other entrepreneurs doing that you are less excited about or you're not a believer in? Is there some trends? Because there's sometimes head fakes or things that are too early that the time is not now. I'm curious, what do you see-
Sam: Or the time has past.
Shaan: ...you're not a believer in, you're not interested in, that sort of thing?
Brian Halligan: Ye olde enterprise software companies with ye olde giant outside sales forces, it just feels like the time has passed to build that kind of thing. And I predicted that before and been wrong. But it feels like there's a new breed of company that sells in a new way, and they start with small businesses. Whether it's Shopify or it's Stripe, or it's HubSpot, there's a new way to build a company and it's not targeting Fortune 500 companies. When I see these companies starting like," Yeah, we're targeting the Fortune 500," take the technology piece away, just all the compliance work you have to do to be able to sell to those companies, and all the boxes you need to check to get in there, and then the sales model is just like, oh, good luck. That's a tough road to hoe.
Shaan: And I want to read a couple of tweets that you had put out and I want to hear you elaborate on it a little bit. So one is," You need to manage your... It's something along the lines of" You need to manage your creative people with loose reins." And that's from Lorne Michaels, the sort of... I think he's a producer or the creator of Saturday Night Live for a long time. So what struck a chord with you about that?
Brian Halligan: You actually brought up something earlier that I thought was really interesting about the Twitch CEO. So in the early days of HubSpot... I'm not a product guy, by the way, by training or by DNA for that matter.
Sam: I think someone described you, I believe it was Kip.
Brian Halligan: I'm a sales guy.
Sam: He said you're the best salesperson he's ever met.
Brian Halligan: Yes, I'm a salesperson. And I grew up in sale. I grew up in enterprise sales, which is ironic because I just said I think that industry's dying. But I tried to convince myself that I was a product guy in the early days of HubSpot. So I read everything I could about it. Design books. I read everything about Steve Jobs, and you name it. And I just tried to get really smart on it. And the truth is I just was not good at it. And we hired one product manager who didn't work. We finally found a product manager that I liked and we sort of built around, and I was like," Oh, I see. I don't actually have that DNA. I'm not good at this." And it took me a while... It took me seeing someone who's actually really good at it to understand that I'm actually shitty at it. And I was like," Oh, I get it." And then I had to figure out," Well, how do I manage this type of person?" And the way I managed this person and the team was by really giving them a lot of free rein, like giving them very wide boundaries and just saying," Hey, you guys figure out, and gals, what's inside this box. This is what the box looks like."
Sam: And what was that box? Like," We need to attract this type of customer. We need to grow by this. We can't have these people churning out."
Brian Halligan: I'll show you the box. It's a box I've drawn on whiteboards in the product organization a million times. Here's the CRM platform.
Sam: So Brian is literally drawing a box right now.
Shaan: He's got like a professor style chalkboard. It's not a whiteboard.
Brian Halligan: Oh, you guys, right. And so on the board, I'll describe it as I'm drawing. I drew a big-
Shaan: No, this is good. We have a YouTube channel too.
Brian Halligan: A big fat box on the bottom. That's like the HubSpot CRM.
Sam: Keep drawing, by the way. We have a YouTube channel. This is going to be on there.
Brian Halligan: Okay. It's the CRM platform on the bottom. And on top are apps. We got a marketing app. We have a sales app. We have a service app. We have a content management system. We have an ops app now. And basically, I would draw that on every board. And what's interesting about the dimensions of it is the vast majority of the space in the drawing is in the big box at the bottom, which is a message to the developers. The private people like," Hey, the power inside of HubSpot isn't a whole bunch of applications that we're going to buy and glue together and cobble together. We're going to build a killer platform and that platform is going to have workflows as part of it. It's going to have social media is part of it. And messaging. It's going to have a set of shared services. And then the apps themselves are actually quite a bit smaller, but they're all just woven together pieces of the underlying platform." And they got it. And actually, they extended it in big ways. And then I said," I want a marketing business. It's going to be a billion- dollar business growing X percent. And this year I want a sales box. And in that sales box, I want that to be a whatever,$ 300 million business growing Y percent." And I just draw out the numbers and draw out the boxes, and they would decide what to put in there based on what they thought and what customers were saying and where they thought the world was going. So I managed them very, very, very loosely. I manage other parts of HubSpot, very, very tightly, but the product org very, very loosely.
Sam: But I've heard that you are like that most of the time, and then when something isn't going well, you get down and dirty and you're a hard ass, and you're like," We have to nail this."
Brian Halligan: I do. I will.... I'm either at a very high level or I go very, very deep.
Sam: And one of the first things that you said to me was like," Keeps..." You didn't mean it this way, but you're like," Keep being you. Keep being crazy. And if anyone says anything to you about what you can and cannot say, you'd let me know."
Brian Halligan: Yeah, stay weird.
Sam: Yeah, that's what it was. It was" Stay weird."
Brian Halligan: And you're in Austin and Austin's a stay weird town. So I just naturally thought stay weird. Because what makes you you is you're you're fucking dude, you're weird.
Sam: Well, dude, so chud, Brian has a book. So if you Google Brian Halligan guitar, he bought Jerry Garcia's guitar, and you can see the price on there, which I was like, that's weird that I know that you bought a$ 2 million Jerry Garcia guitar. That's crazy. And also he has this book called like What the Grateful Dead Can Teach You About Social Media.
Brian Halligan: About marketing. About marketing.
Sam: About marketing. So it's-
Brian Halligan: By the way, a lot. A lot.
Shaan: What can I learn from the Grateful Dead? Give me the bullet points.
Brian Halligan: We're going to have to do another whole other podcast about it. It's just too much.
Sam: Do you know... So there's this company called, I bet you definitely know what it is, nugs.net. You know nugs?
Brian Halligan: Yeah. Of course I know nugs.
Sam: So nugs is this... So the reason I know about it was The Hustle started in this small apartment that I rented for really cheap, but it was Craigslist's old office. So Craigslist was doing like$ 900 million a year and Craig Newark basically owned the whole thing. And he was based out of this little shitty apartment that I ended up renting right when he moved out, and we shared it with nugs. net. And it's nugs. net is this company that it started out basically, I think only for Grateful Dead, but basically-
Brian Halligan: I think so, yeah.
Sam: ...I remember as a kid, Shaan, I don't know. You didn't have an older brother, so you probably didn't do this, but you would meet people on the internet, and you would get their address, and you would mail them a tape, and they would mail you a tape back, and you would have a live recording of a particular concert. And nugs. net was the platform or the message board where you could like meet other people who went to a Pearl Jam or a Grateful Dead concert and you'd trade tapes. I don't even know what they do now.
Brian Halligan: Now it's cool. Now it's a live broadcast for concerts. It's awesome. So you want to see a Dave Matthews concert tonight, they're probably broadcasting it. It's awesome now. They've really come a long way. That's an awesome app now.
Sam: So they started as this like exchange. I guess now they have like a thing. And we were talking about the Grateful Dead and what you can learn from them. These people have the most... There's a few things. Moms are really culty about like products for their babies. Dog lovers are kind of like this. Health nuts can be like this. And Grateful Dead fans. And the people who are into Phish, Grateful Dead, this type of stuff. Their engagement is off the charts. If you go and look at the-
Brian Halligan: So I'll give you a non sequitur. In a weird way, the Grateful Dead inspired HubSpot, and here's how. So Sam, let's say you're going to a Rolling Stones concert and you show up with your big camera and your giant recording equipment. What happens when you get to the door?
Sam: They say," Bounce. You can't-
Brian Halligan: Bounce. And what does the Grateful Dead say?
Sam: I think they have a section where you can sit-
Brian Halligan: They have a special taper section for you. Like," Come on in. Sit right here. Put your microphone up. Get your gear all set up. Come early." You get like VIP access and you go and tape. And then you listen to the concert. And one of the things about the Grateful Dead that's interesting, like when you see the Rolling Stones, you see them in Boston, they play a certain set list and they play it very precisely and they're very good. Then they go to New York, and what do they play?
Sam: Totally different things.
Brian Halligan: The exact same thing.
Sam: Oh, well, yeah. Most bands do the same thing, but Grateful Dead, it changes every night, right?
Brian Halligan: They crosstalk every time. And by the way, sometimes it's terrible, but usually it's quite good. And so you tape in Boston, and then you go to New York and they do Giants Stadium for two nights. And then you go to Philly, and you follow them around. And by the end of the show, you've got like 15 shows of your tapes. And you pick the two or three real good ones, and you make copies for your friends, and you send them around to your friends. And then you're at some fraternity party or whatever, and somebody's playing this tape, and the person next to you is like," Hey, what's this crazy gypsy music they're playing?" You'd be like," Oh, this is the Grateful Dead. Why don't you come with us? We're going on the spring, on the summer tour this summer. Come along with us." The Grateful Dead were the first and best inbound marketers. They gave away all their content and they use the best content to spread the word around the internet. They were very inspirational behind inbound and content marketing and all that stuff. They were the first ones. They were the really first ones to really embrace viral marketing in a super, super modern way. And back then there wasn't email marketing and there wasn't social media, but they were big on message boards, and the message boards were on way go.
Sam: I think that the live music space is interesting to me, and there's a few opportunities that I've seen. So there's this company that streams live concerts on Apple TV. I forget what it's called. But they-
Brian Halligan: By the way, that's exactly what nugs does.
Sam: Yeah, and this company, they just built... They don't stream live ones, but it's like Netflix for concerts. And they were doing-
Brian Halligan: That's a cool idea.
Sam: It was pretty cool. They were doing about$ 20 million a year in subscription revenue, and I think they bootstrapped it. They're based out of England. I'll look up the name in a second. And then the second thing that I always thought was interesting, and it totally bombed, was Songkick. Shaan, did you know Songkick?
Brian Halligan: Yeah.
Sam: So Songkick, what it did was they basically... You would say where you're living and it would tell you-
Brian Halligan: The concerts.
Sam: ...all the concerts happening that day or for any other day.
Brian Halligan: I still get email. I still get email.
Sam: So they have this huge email. It's basically like an email marketing business, and they raise a little bit of money, and it complete... I think it went, I think it failed and was sold for nothing. But the thing about the live music space is a lot of people have tried to build stuff in there because it's fun, right? It's like you're passionate about it. But very few companies have been able to pull it off and make money. Another one was something FM. What was that called? I forget what it was called. It was started in San Francisco.
Shaan: Turntable. fm.
Sam: Turntable. fm. And that bombed too. It didn't work out. Nothing in the-
Shaan: There's rights problems. There's rights problems. That's one problem for music. And then the other thing is the trick in business is I think to do what you're passionate about that not every other human is also passionate about. Sorry. Because you want to follow your passion, but you don't want to follow everyone's passion because that's just competition. Right? Like Brian nerds out about inbound marketing. He's passionate about something that 99% of other people don't even know or care about. So that's the beauty of HubSpot and how you can build a giant company like HubSpot because you're going to go further than everybody else. Live music. Okay. Yeah. Great. Here you go. You and every other 20 year old wants to do it.
Sam: That's a really good point. I'm not a huge Peter Thiel fan, but he said something interesting in his book. He said," In order to be successful, you need to be right about something that everyone else thinks you're wrong about, and they think you're wrong about it for a long period of time." I think that's right- ish.
Shaan: Somebody says something like that, they go" Being a great investor is investing in things that everybody agrees with you about later."
Sam: It's called Qello, by the way, Q- E- L- L- O. And they claim that they have two or three million subscribers. Very interesting business.
Shaan: We got to wrap. We got another pod right after this, actually. Brian, this is great. Thanks for coming on.
Brian Halligan: Thanks for having me. This is fun.
Shaan: You're a fun hang. I liked this. I didn't know anything about you before this, so this is cool.
Sam: I want to have you on again. The things next I want to talk about is like the evolution, how you go from just being scrappy to now, you're like very corporate CEO. That sounds like an insult. That's not an insult. I mean, you're able to manage thousands of people and very few people have been able to pull that off, so I want to ask-
Brian Halligan: We can talk about the CEO journey and how it changes over time. It's interesting. But we definitely have to talk more Grateful Dead.
Sam: Down. I'm down. Well, thank you, man. This is awesome. It's kind of your podcast now, so anytime you want to come on, let's do it.
Brian Halligan: Great.