Secrets to Growth: A Talk by HubSpot CEO Brian Halligan
Written by Jenna Bos
HubSpot CEO Brian Halligan gave a glimpse of his new content about growth and scaling to the HubSpot User Group Boston. Here are some key takeaways.
A few times per year, the HubSpot User Group (or HUG — aww, how sweet) of Boston meets at the HubSpot headquarters for whatever’s on tap (I like local favorite Downeast Cider), networking, and a talk (typically someone from HubSpot).
One of my favorite meetups featured Dharmesh Shah, Co-Founder and CTO at HubSpot, and Dan Tyre, Sales Director at HubSpot. They hosted a fireside chat containing humor and insight, followed by questions.
This meetup is a hidden gem. There are HUGs in major cities, but the Boston group has the unique advantage of its proximity to HubSpot’s Cambridge HQ. Usually, the crowds are small enough that for the brave (or liquid-courageous) and desirous, there’s an opportunity to get some face time with the high-profile speakers.
The September 2017 HUG featured CEO and Co-Founder Brian Halligan, who, incidentally, looks exactly like the photographs albeit slightly taller than expected, shared with us some new content (maybe you'll catch it at INBOUND 2017?). I’ll break down some of the key takeaways here. As always, the content is more impactful coming directly from the horse’s (or CEO’s) mouth, so I recommend getting in front of him at INBOUND or another speaking engagement to get the full effect.
1. “Starting is Easier than Ever”
Halligan started by asking why people are starting companies. This turned out to be a rhetorical question as he “pulled out the receipts.”
He laid out the basics of starting a company: incorporating as an LLC, office space, office supplies, Microsoft Office (that resume line item that seems will never go away), a CRM, a domain name, website, servers/hosting and developer tools.
The two biggest ticket items — office space at an estimated $20,000 in 2006 when HubSpot was founded, and a CRM, estimated at a cool $50,000 — he noted today would be $0. With the rise of flexible and remote working arrangements and HubSpot’s free CRM tool, would-be founders have less financial hurdles than their predecessors.
HubSpot, a company that cost $200,000 to start in 2006, could now be started in 2017 with $1019.
2. “Scaling is HARDER than Ever”
Halligan used this chart from Chiefmartec.com to demonstrate that starting easier than ever, and scaling harder than ever.
Sources: CabinetM, Capterra, G2 Crowd, Google, LUMA Partners, Siftery, TrustRadius -- see http://chiefmartec.com/2017/05/marketing-technology-landscape-supergraphic-2017/ for details. Produced by Scott Brinker (@chiefmartec) and Anand Thaker (@anandthaker).
This chart gives a comprehensive overview of the marketing technology landscape, sorted by primary function and specialization.
The point here is that it’s easier to start a business, and many do. As more companies enter the landscape (Halligan did the math and it turns out a competitor of HubSpot enters the market at an equivalence of one every day), you’ll find yourself competing against tens of thousands of companies for customers.
Oh, and you’ll be competing for qualified employees.
In conclusion, yes, the internet leveled the playing field. There are tools available that can help you get started faster and easier.
However, even some of these free tools you can use to get your business out there have become “pay to play” if you’re serious about building a customer base and building a desirable, scaleable company (think Facebook, where you’re either shelling out the advertising bucks or getting your “likes” from family members). The internet, alas, has become more of a “walled garden.”
3. Disruption: It Happens Fast, and It’s About the Customer
Disruption happens in months now, not decades.
Halligan points to Adam Smith’s invisible hand, and says, no, now it’s a visible fist when you’re scaling from 18 team members to 1800, to $350 million in revenue.
And because all innovations must contain a sexy “X,” the innovative concept we’re talking about that changes the game for scaling is “CX,” or the customer experience.
Halligan alluded to (though did not directly cite) a meme floating around earlier this summer about disruption and customer experience.
That meme said originally, though it has been altered as if it were participating in an internet-wide game of telephone:
There has been some controversy as to the legitimacy of this claim; perhaps each situation listed as evidence deserves a little more nuanced explanation of what happened. Brea himself provided more context a couple weeks after his original post had gone viral.
Halligan did not get into those nuances but did offer a few anecdotes indicating that his experience, both as a teenager and as a successful CEO, support Brea’s ideas (I’ll refrain from sharing them here because I feel it is a cardinal sin to deprive someone the telling of their own anecdotes).
If you are a CEO, a marketer, or anyone responsible for growing your business, you need to get a thorough understanding of what it’s like to be a customer and improve that experience for them. Rinse and repeat. Use the power of the internet to help you.
4. Scaling and Strategy: Build a Moat
Then came the quoting of the philosopher. Not Aristotle. Not Confucius. Not Kierkegaard. Yes, Warren Buffet!
Here is a brief overview from Buffet himself on his moat concept:
Essentially, as your business grows and you raise your profile (or build a castle), you become vulnerable to your competitors as a result of your visibility and success as they hone in on, and attempt to replicate, or undermine, the factors that led to your success.
This is why it’s important to build a “moat” around your business to protect your business against these types of threats.
As an example, Halligan points to agency partners as a shark, or alligator, or what have you, in the HubSpot moat. HubSpot has built and maintained relationships with 3,500 partner agencies who all know about, promote, and are advocates for HubSpot. In return, HubSpot offers tools and resources to help these businesses grow. By creating these unique, beneficial partnership, HubSpot competitors will have a hard time dismantling this growing community.
Why do these partnerships work? HubSpot has aligned incentives with these partners.
Moats matter. How can you add customer experience to your moat? What partnerships can you build to fortify your moat? These relationships, these experiences, are what will keep your castle standing strong.
And, this way, you’re not doing it alone — you have people, customers, and partners rooting for your success.
5. Culture and Scaling: Look Inward to Grow Outward
At first skeptical of the vague, somewhat gooey, idea of culture, Halligan has seen firsthand the essential role culture has played in HubSpot’s ability to scale.
He goes so far as to say that culture is the secret ingredient to scaling.
Why? This is the one insight that really stuck with me on my walk to the Lechmere T stop later that evening:
Culture is how people make decisions when you're not in the room.
Halligan outlined the big steps for bringing scale-worthy culture to an organization. HubSpot was inspired by the Netflix culture code (check out the updated Netflix culture code here).
Sidenote: a culture “code,” rather than being short for codified, or a strict set of rules, is more like a line of software code, where the code is implemented, helps shape and run outputs, and can be changed, updated, and adapted based on need.
How does HubSpot keep its code up to date? They survey their employees and keep track of the NPS of their employees (in this case the NPS question is — would you recommend HubSpot as an employer to a friend?). Their goal is for people to think of HubSpot as a place they’d want to work for decades.
If you aren’t among the 3,403,848 who have seen the HubSpot culture code, voila:
The most direct route for understanding the influence of culture on growth is to look at the resulting matrix that represents how culture works. It’s when you get to the point where the hierarchy of needs looks like this: Me < Team < Company < Customer.
Another tip that Halligan offers is to have a “voice of the employee.” In many business meetings, you’ll have at least someone who acts as a proxy for the customer, called the “voice of the customer.” They’re able to empathize with how decisions impact the customer and bring that important perspective to the meeting. If you’re serious about culture, you need to do the same for your employees. You need to bring that same empathy, attention, and consideration to how decisions affect your employees.
6. Don’t Wait: Start These Growth Strategies Now
If you want to do growth and scale correctly, start it now. Don’t wait. You will want these systems in place before the growth happens so you can quickly expand without having to worry about quality control.
Determine what’s in your moat. Determine who’s in your boat. Determine how you’ll keep people in your moat and boat.
And finally, think about who’s coming to your castle, your customers. Make their stay unforgettable.
What do you think of Brian's ideas for growth? Let us know in the comments.
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