The Exchanges

Q Do you hate the way that community is so thrown around today? You've built communities for years. Now community is the buzzword. Do you hate it, and what do you think people misunderstand by the buzzword of community?

A I, it's the same, it's, we're, we're an industry of buzzwords, right? Um, it's, what people don't realize about community, um, is the same thing they, And this is not everyone, right? It's, it's the, uh, 95% of the people that give the real five percent a bad name, right? It's, um, it, the issue is that community is really around unlocking value for the community members. Fundamentally, that's what it is, right? It's like, and that is, if you like, you look at the kind of roots of the word itself, that's what it is. It's gonna come together as a community, and we think of it as like, oh, Basically, a community is just a list of people I can market to that have opted in or whatever and will show up at my event or show up for my webinar. That's not community. A real community is one when the community participants are getting value from each other, and you're there as the host, not, you're not up on stage, right? That's the thing. It's like, oh, like, I'm, we've got this community in the room here of 5000 people. That's not a community. The community is when those 5000 people go out into the hallways and talk to each other. That's the community, not in the room when you're doing your keynote speech, right? That's the, um, anyway. So, yes, we do get it wrong, and if you think about it correctly, it says, okay, who are the, who are the people I'm trying to reach and trying to sell …

AI assessment note: “A real community is one when the community participants are getting value from each other”

Q Do you hate the way that community is so thrown around today? You've built communities for years. Now community is the buzzword. Do you hate it, and what do you think people misunderstand by the buzzword of community?

A I, it's the same, it's, we're, we're an industry of buzzwords, right? Um, it's, what people don't realize about community, um, is the same thing they, And this is not everyone, right? It's, it's the, uh, 95% of the people that give the real five percent a bad name, right? It's, um, it, the issue is that community is really around unlocking value for the community members. Fundamentally, that's what it is, right? It's like, and that is, if you like, you look at the kind of roots of the word itself, that's what it is. It's gonna come together as a community, and we think of it as like, oh, Basically, a community is just a list of people I can market to that have opted in or whatever and will show up at my event or show up for my webinar. That's not community. A real community is one when the community participants are getting value from each other, and you're there as the host, not, you're not up on stage, right? That's the thing. It's like, oh, like, I'm, we've got this community in the room here of 5000 people. That's not a community. The community is when those 5000 people go out into the hallways and talk to each other. That's the community, not in the room when you're doing your keynote speech, right? That's the, um, anyway. So, yes, we do get it wrong, and if you think about it correctly, it says, okay, who are the, who are the people I'm trying to reach and trying to sell …

AI assessment note: “A real community is one when the community participants are getting value from each other”

Q absolutely, I, I heard about you kind of giving away 90%, which I thought was awesome. I do want to start on your leadership style, though, because it's a fascinating topic, and, bluntly, you're an even more fascinating subject than most when we dig in, and so when we think about leadership styles, how would you describe yours today, and then reflectively, how has that leadership style changed over time?

A You know, I struggle with the word leader. I really think of myself as that, um, well, I'll tell you my, my, I'll call it my operating style for lack of a better, and obviously, you know, leadership or some sense of it is part of that. There are a few kind of fundamental core attributes to my operating style. One is around transparency. And what I mean by that is that whatever it is that's going on in my head, um, I share it. Right? It's like, okay, well, here's what, what I think we should do. Here's the path I think we should take. Here's what I think is broken in the world. Here's, you know, what I think we did well. Here's what I think we didn't do well. And I kind of put it out there. That's kind of, uh, the number one thing is, uh, is, is transparency. And then kind of combined with that, um, and it's going to sound weird saying the word, uh, because it's a paradox in a sense, but is around having the humility to kind of listen. It's like, okay, if you put this stuff out there, but you have to be kind of, Open to debate. You have to be accepting of the fact that you don't know all the answers. You haven't figured it all out. Yes. You may have had some experiences. You may even have some data. You may have some more context than someone else. Uh, but that doesn't necessarily mean that you're right. Um, and so kind of having the humility to say, I'm still constantly learnin…

AI assessment note: “There are a few kind of fundamental core attributes to my operating style. One is around transparency.”

Q Listen, you brought up, I just spoke to Pat about it, so I have to ask, the culture decks that you put together, what is the process with which you go through to put them together? I'm really intrigued.

A Yeah, so there's only one deck. Um, it's called the culture code deck. The reason it's called the culture code, um, is, you know, a lot of people kind of mistake it. It's like, oh, like it's a code of conduct or a moral code or something like that. It is not. The culture code, um, was my kind of manifestation of, if I could write an operating system, literally write Python code, let's say, uh, to run the company and help make decisions and do these things, this is what it would be, right? And the kind of V-one of it, Well, let's, let's take half a step back. On the top three list of things I've learned in, you know, 30 plus years now being in the professional world is that culture is a product. Culture is a product. So we build a product. If you're a tech company, you build a product for your customers. We all understand that. We learn, we understand product management. We understand the importance of getting customer feedback and product market fit and all those things. We fix bugs. We add features. We understand that discipline. We can literally take 95% of that same mindset around product and apply it to this thing called culture. And so here's what happens when you think about culture as a product. You're like, oh, well, I would never build a product without asking the customers what it is they want. Why would you build a culture without asking the employees what it is they…

AI assessment note: “We can literally take 95% of that same mindset around product and apply it”

Q How do you test for market? Because everyone does customer discovery and they say, would you like this? And everyone goes, yes, I would. And they go, great, we've got a market. So how do you test for market and validation?

A I'm a little bit old fashioned this way. Um, the way to test a market Is to, um, create something of value and get value in exchange, like money. Like, like, build a product, charge for the, I'll tell you what HubSpot did. And, and this is one of the thousand things that my co-founder Brian and I, like, completely agreed on. Like, we talked about this all the way through. It's like, okay. And we've talked about exactly this risk. It's like, okay, we're, you know, we're not splitting atoms. We're not creating a new energy source. We're putting someone on Mars. Let's assume right now that the product we have in mind that we'll be able to build, um, And so how do we figure out if there's a market or not? It's like, oh, well, the way to figure out if there's a market or not is to ask people for money and see if they give it to you. Okay, fine. Now what do we need in order to ask people for money? Well, we need a product. Fine. We have a product in alpha. One can argue whether we should or shouldn't be charging for it. We're gonna charge for it. And the other thing you need is a price. Because in order to ask for money, you have to know what you're going to ask for. All right. And so I'll tell you the conversation that Brian and I had in order to kind of determine the price for HubSpot in year one. Brian, by the way, context building. We had just been through Two years of business s…

AI assessment note: “create something of value and get value in exchange, like money.”

Q I need to give credit to Kieran on your team for this one, which I loved. I'm going to borrow it a lot actually, but he asked the question, what's the most difficult, but valuable lesson you've learned in the HubSpot journey? In other words, it was super tough to go through, but you're glad you went through it.

A That's interesting. Um, I'll say this, the kind of falls into the kind of biggest mistake, and, and we, and we still have not recovered from it yet, and I'll, um, I'll give you the context. So when HubSpot started, first it was Brian and I, we met at, uh, in grad school, as I mentioned, um, and then, so he was a CEO. We'll talk about that. I was CTO. Um, our VP of sales was from MIT grad school, uh, same school. Our head of marketing, same school, head of engineering, same school, uh, So the first six hires, all men, all from the exact same school, same program, had the same, not necessarily the same graduating years, but just in that little cluster. And so the mistake, I think, and this was blindingly obvious now, was not obvious to us then, is just, it was, um, It's the opposite of diversity in terms of the team, right? It's like it's, um, and we had not really even thought about it. To be candid, this was, you know, 16 years ago. Um, so we hadn't really deliberately thought about culture or diversity, all those things. Um, and it was about five years later before that kind of became one of the core pillars of HubSpot. Um, but if I could do it all over again, that was the big mistake. Um, and the challenge with that particular mistake is, Okay, so I'm going to take a slight excursion here. It's, it's related, but it's important. Um, so we all understand, um, financial debt. W…

AI assessment note: “if I could do it all over again, that was the big mistake.”

Q You said about modest means there when you were growing up, you know, obviously your, your son, um, I think it's 11 or 12. Obviously it has a very different lifestyle than you did growing up. How do you instill the same work ethic and values given a very different style of upbringing? It must be tough.

A It is, it's, uh, borderline impossible, right? Um, it's, it's because it's such a diametrically opposed thing. So then the question is, is, you know, what we will call kind of drive or ambition or just this kind of need to build or create value, is that innate, right? Or is it because you're kind of hungry and you have a chip on your shoulder and you've got a point to prove, uh, one could easily make the case that it sure helps a lot to have the hunger because you're gonna have that drive because you have no choice but to not have it, right? It's, uh, Comes down to survival. Um, having said that, the one thing that I have found, um, works better Then just like, oh, you need to like work harder, do this, whatever that, you know, um, for anyone that has kids knows that doesn't really work that well, is to kind of tap into the things he does care about and like, uh, and he is one to kind of keep score, right? And then they, um, and he obviously loves video games like, uh, many children his age. But, uh, one of the things, you know, I've done recently, um, a short excursion is that, um, you know, so he's taking a Python programming class, right? Just, uh, doing all the things I loved, uh, and I'm trying to relive my life through him. He asked for it. He's been wanting to do it. You know, he loves tech, but, um, but then I'm like, okay, well, you know, it's really abstract for him. …

AI assessment note: “tap into the things he does care about”

Q How do you let people know they can fail without creating a culture that very freely accepts failure? You want them to take risk.

A Totally. And it's like, yeah, um, the easiest way is to, um, is to celebrate failure. So even at like, we will have all hands meetings where we'll talk about it. We have a failure forum, especially within kind of product and engineering. Here are things that we tried that did not work. Ok, and that, and that's fine. Like, so we, so we learn the lesson, we move on. Um, and so that basically sends a signal, and this is particularly useful, uh, for high growth companies, right? The thing we don't realize, like, if you're growing headcount, 50 to a hundred percent, or at least you were up in, in twenty-twenty-one, um, that means every all hands meeting you have, A decent percentage of the company. This is the first all hand meetings they've ever been to. So, you know, founders often, um, will walk around. It's like, oh, well, I've already said this thing like a hundred times around culture, around risk, around boldness, around whatever. It's like, yes, but 40% of the room, people in this room have never heard us say those words in that order before, right? Like they've never heard it. Uh, and maybe they read some of it in the culture code deck. Maybe they, but they've never really like heard it. And so that's, that's the key is that you cannot rely on osmosis for anything good that's going to happen. You have to sort of beat the drum. And the only way to know whether you've kind of…

AI assessment note: “the easiest way is to, um, is to celebrate failure”

Q How do you determine between an ancillary and a distraction? There's a fine line between the two.

A Um, okay, so a couple things. One is, So I'm a big believer, a really big believer, ah, in, in focus. And so I, so my advice, and this is going to sound kind of paradoxical, is founders should put off the second product for as long as they can, but not forever. And the reason I say as long as they can is because when you add the second product, everyone will measure All the goodness that will come from it. And let's assume right now that all the data you're projecting is going to be right. The revenues are going to grow this way and you're going to be able to sell X units. And this is going to be awesome for the second product. Let's just stipulate that you are correct about your projections. What people don't realize is the flip side of the equation is the increase in complexity. When you go from product N equals one to product N equals two. And that is a huge gap because everything in the business, when you launch your second product becomes harder, every decision becomes harder. Every chart that you look at now, you're then going to want to break down. It's like, oh yeah, here's our growth overall. How does that break down by product one, product two? Oh, we're going to invest in R&D, and we just hired 10 engineers. How do we decide whether they work on product one or product two? Oh, we have this ability to do a massive, like, campaign. We've got a marketing budget. It's De…

AI assessment note: “founders should put off the second product for as long as they can”

Q Do you not think the state of product marketing stays pretty abysmal? I look at everything and I'm like, it's neutral. Nothing makes me feel anymore. Nothing excites me. It's all the same case studies, logos, very bland and nothing excites me. How do you think about the state of product marketing today and what makes truly exceptional product marketing to you?

A To me, product marketing is all about, um, It's all about community, um, and not an abstract sense, right? So one of the things that I think, uh, HubSpot got right is that we were kind of builders of community well before we even had a product, right? Like we were out there kind of congealing these things like, okay, well, we're gonna say that marketing is broken and people are doing spammy stuff, and there's this new way called inbound marketing. We'd have nodding of heads, right? And it's like, we're, then we, you know, we start the blog, um, and we start the event, and we're trying to get that flywheel of, like, We want to find like-minded people and pull them together, and they're out there. And part of the thing we did, which I think companies should do, and I don't mean in a sensationalistic way, but you have to kind of polarize your market.

AI assessment note: “To me, product marketing is all about, um, It's all about community”

Q Listen, you brought up, I just spoke to Pat about it, so I have to ask, the culture decks that you put together, what is the process with which you go through to put them together? I'm really intrigued.

A Yeah, so there's only one deck. Um, it's called the culture code deck. The reason it's called the culture code, um, is, you know, a lot of people kind of mistake it. It's like, oh, like it's a code of conduct or a moral code or something like that. It is not. The culture code, um, was my kind of manifestation of, if I could write an operating system, literally write Python code, let's say, uh, to run the company and help make decisions and do these things, this is what it would be, right? And the kind of V-one of it, Well, let's, let's take half a step back. On the top three list of things I've learned in, you know, 30 plus years now being in the professional world is that culture is a product. Culture is a product. So we build a product. If you're a tech company, you build a product for your customers. We all understand that. We learn, we understand product management. We understand the importance of getting customer feedback and product market fit and all those things. We fix bugs. We add features. We understand that discipline. We can literally take 95% of that same mindset around product and apply it to this thing called culture. And so here's what happens when you think about culture as a product. You're like, oh, well, I would never build a product without asking the customers what it is they want. Why would you build a culture without asking the employees what it is they…

AI assessment note: “On the top three list of things I've learned in, you know, 30 plus years”

Q That's the final question before we move into a quick fire. You're on the cap table also of some of the biggest and best companies today as an investor. What's been your biggest, what, how has angel investing impacted your operating mindset most?

A A lot. So, by the way, um, so I got into angel investing when I was a grad student, um, with, you know, with Brian. And the reason I got into it, I'll tell you the quick story, um, Is I had promised my wife I was not going to do another startup, right? That was the, that was a standing, um, agreement. And then, so I decided, oh, well, I really like startups. Maybe I'll invest in startups. I can live vicariously through other entrepreneurs, right? That was, uh, it made sense. It's like having a niece or nephew. It's like, you get to play with them, but then you can kind of hand them back to their parents and then you go back about and live your life, right? That's the, it's like, that sounds awesome. I get to, Whenever I want, I can go have the excitement and go into strategy meetings if I want to and do all those things. Um, and, and then I can just kind of, uh, you know, step back into the, into the shadows. Okay. So that was the original plan. That's why I started Angel Investing. Uh, and then we made the decision to start HubSpot. And so I had a decision. It's like, okay, well, do I continue Angel Investing? And my first immediate reaction was no, because I'm such a big believer in focus. I'm like, I can't do that and do this. Uh, that just doesn't, doesn't compute. Um, so the decision I made is like, okay, well, there is value to angel investing. Here's what I'll do. I will…

AI assessment note: “number one principle of my angel investing is solve for minimizing time”

Q What is the right way to bring employees into culture creation process with you? Is it a simple, you know, what would you like in the culture that we have here? What questions do you ask? How do you ask them? How do you get that feedback?

A Yeah, so the number one thing is, um, Is to, so every company has a culture, whether you deliberately designed it or not. Um, the hope is that by being intentional about it, you can get the culture you want versus one that's kind of thrust upon you. And the kind of second law of thermodynamics is your culture will suck outside of intervention, right? It's like, it's entropy. Um, but, and so the way you kind of involve people is you involve people. Um, and this is a painful process. I will tell you, um, I began writing the culture code deck. This was, I'll say maybe 11 years ago, give or take a little bit. Um, And I was kind of volunteered into it by my co-founder, um, uh, you know, Brian, who had gone to this, uh, kind of CEO. He was part of a CEO group that they would kind of sit around and meet and talk about CEO issues and sing CEO songs, um, you know, sit in a circle and do all that kind of thing. I'm kidding. Um, but they did sit in a circle. Um, and one of the topics one time was around culture and how important culture was. And we were early in our history at this point. Um, and so he comes back to me, we have one of our founders dinners that's that are multi-hour, uh, affairs. And he's like, Dharmesh, I like, I just got back from my CEO club kind of meet up thing, um, and the topic was culture, and they're like, culture is like super important. I'm like, awesome, Brian.…

AI assessment note: “and so the way you kind of involve people is you involve people”

Q What is the right way to bring employees into culture creation process with you? Is it a simple, you know, what would you like in the culture that we have here? What questions do you ask? How do you ask them? How do you get that feedback?

A Yeah, so the number one thing is, um, Is to, so every company has a culture, whether you deliberately designed it or not. Um, the hope is that by being intentional about it, you can get the culture you want versus one that's kind of thrust upon you. And the kind of second law of thermodynamics is your culture will suck outside of intervention, right? It's like, it's entropy. Um, but, and so the way you kind of involve people is you involve people. Um, and this is a painful process. I will tell you, um, I began writing the culture code deck. This was, I'll say maybe 11 years ago, give or take a little bit. Um, And I was kind of volunteered into it by my co-founder, um, uh, you know, Brian, who had gone to this, uh, kind of CEO. He was part of a CEO group that they would kind of sit around and meet and talk about CEO issues and sing CEO songs, um, you know, sit in a circle and do all that kind of thing. I'm kidding. Um, but they did sit in a circle. Um, and one of the topics one time was around culture and how important culture was. And we were early in our history at this point. Um, and so he comes back to me, we have one of our founders dinners that's that are multi-hour, uh, affairs. And he's like, Dharmesh, I like, I just got back from my CEO club kind of meet up thing, um, and the topic was culture, and they're like, culture is like super important. I'm like, awesome, Brian.…

AI assessment note: “the way you kind of involve people is you involve people.”