The Exchanges

Q Absolutely. But I, but it happens every week I get an email like this. So how's it gonna change with AI?

A Look, the, the biggest change that's happening is that you have to do more to get your customers and prospects to pay attention to you. There's just an explosion of content. There's an explosion of emails. There's an explosion of outreach. And how are you going to cut through that noise? Not by, uh, first of all, if you have like egregiously wrong information, like Oh, your conference is next week. Then you're out. Like, you don't even get 10 seconds in that email, and you'll become a case study for what not to do. But then it becomes a, what does it actually take for a CEO like you to open that email and to engage? It better be exceptionally targeted. It better be personal, not personalized. We've been talking about personalization for a very long time, which is You segment your customers. You take your customers, and you personalize your data, and send it to everybody in that segment. That doesn't cut it anymore. It needs to be personal. It needs to be, Jason, here are the four posts that you did. Here is why I can help you with this single problem that you have, and let me get 10 minutes with you.

AI assessment note: “the biggest change that's happening is that you have to do more”

Q these, and I've seen the Octodate and others, but I haven't seen this 248 per SMB. It's really interesting. Do you have insights? Do you think that that was an explosion? Do you think it will stay constant? Do you think that are we, if we're selling to SMBs, are we competing for one out of 250 slots? Do you have a sense of how that will look going forward?

A I mean, look, everything comes in cycles, you know, within business. There's a period of You know, explosion of point solutions. There's a period of consolidation of point solutions. There's a period where everything is bundled and there's a period where everything is unbundled. I mean, if you go back, you know, and start looking at the different S curves, we've gone through those cycles. So I think we've just gone through the cycle of explosion and massive point, you know, solution adoption. Now we have to go through a period of connected solutions, right? We cannot just have, I'm not saying point solutions are all bad. I think you're not going to go from 248 to two. That's not possible, but I think you're going to have to think about how are you going to connect some of these solutions? How are you going to get the value out of them and what is absolutely need to have versus what is nice to have?

AI assessment note: “we've just gone through the cycle of explosion and massive point, you know, solution adoption.”

Q The, for an average question, A great well-trained AI is better than a human, isn't it?

A Here's what we have seen. Um, and maybe why is support a great use case? I think because there's a lot more documentation, and anywhere there is documentation, anywhere there is data, anywhere there is history, and anywhere there is a known amount of finite work, AI is a great way to solve that. And if you take the tiers of support, tier one support tickets, You should not be using humans at all because you have documentation, you have a support history of how you have solved it, and you can get all of this. And so I think internally we started using AI for our tier one support tickets, but we had a counterbalancing measure, which is CSAT. So you can't solve tickets with AI without knowing that you're maintaining or improving your customer satisfaction. So those two metrics go hand in hand for us. And internally, we've gotten close to 45% solved with AI. Now, last year at Inbound, which is HubSpot's conference, we launched Customer Agent, and the use case is support tickets. And we have over 2500 customers now on Customer Agent, 52% average resolution rate with AI. And we have customers that have between 70 and 80% of their tickets getting resolved with AI. And we are like watching the patterns of these customers really closely. What is the difference between someone who is solving 40% with AI and 80% with AI? It comes down to knowledge and knowledge based articles. And now we …

AI assessment note: “tier one support tickets, You should not be using humans at all”

Q So how have you actually created, because that's a tough question. How have you helped create the urgency?

A It is not fast enough, and my team will hear this from me every single day. Look, I think November, 20, 22 is such a pivotal moment. AI was there before. Generative AI was there before. But November, 20, 22 showed us that you can now interact in a very different way with technology and get more done. And so for us coming into 20, 23, we just finished the annual planning process. We had the roadmap. We knew exactly what we were doing. We came into January, 20, 23, and we said, pivot. That entire roadmap that we just planned for the last three to four months is not going to be what we are building in 20, 23. And so we pivoted our entire company, you know, the beginning of January, 20, 23. We started building a whole set of new features. The first set of features that Dharmesh helped us launch, that our teams launched was March, 20, 23. We launched our first chat spot now call co-pilot in March, 20, 23. Then we launched a number of content features in March, 20, 23. So it was like immediately pivoting. But Jason, I don't think it has been easy. There was just a lot of questions. I think you mentioned this 20, 23 and 24, not more skeptical voices, a lot more. Yeah, this is going to be like every other big tech fad that was out there. This is just going to go away. But I think internally we felt like this is the first time that some immovable metrics in go to market can be moved. I'…

AI assessment note: “That entire roadmap that we just planned for the last three to four months is not going to be”

Q you have this one to 10, this PLG segment, which is long tail, they're HubSpot champions. They love you. They watch you online, but the direct revenue isn't huge in the early days, right? How do you allocate team resources? How do you get mind share, um, features, story points, marketing? Like, how do you, how do you figure out how much of the HubSpot budget that long tail gets?

A It comes, uh, with starting with a clear strategy, right? You know, you can't get to resource allocation without having clarity on what you're doing and why you're doing. For us, our freemium motion and starter is Exceptionally important to the strategic, you know, mission that we are in. Our mission is to help millions of organizations. And if you don't have wide enough distribution to get millions of organizations to try your, you know, CRM, then you're not going to get there. So I think it starts with clarity of what's your mission is to get millions of organizations to grow. Therefore, what do you need? You need the widest possible distribution And therefore, how do you allocate resources? You got to make sure that, you know, it is part of the strategic objectives. We have six strategic objectives in the company. This is consistently been one of the top five or six, uh, objective for the last five years. And so, because by the time you get to the budget, you're asking what's my strategic objective and how do I make sure that we're making enough progress in the strategic objective? So you got it. My, my point of view is get clear on strategy. Really understand why you're doing certain things and why that is important for the long term, you know, of your company and then allocate resources. Then you avoid a lot of the, you know, I don't have resource here and I don't have thi…

AI assessment note: “how do you allocate resources? You got to make sure that... it is part of the strategic objectives”

Q HubSpot for sales, marketing, CMS, service, everything now e-commerce payments, but you also want to support customers that for whatever reason, right or wrong, use adjacent vendors. How do you get the team To give customers the best advice. Like, I don't think it's simple, right? Because, um, it's, it's, it's, it's complicated to communicate the realistic pros and cons of, of, of a platform versus adding point solutions, right?

A Yeah, absolutely. And look, I think for us, um, We had a customer panel. We do customer panels every month. Uh, one of the first meetings of the month. Yesterday we had a customer panel and Jason, um, one of our customers said, we asked the question of, Hey, why'd you pick us? We're always curious. Why'd you pick us? And, uh, and this customer said to us, and this is like our management team, like listening on the call and said, Uh, we did an RFP. We actually talked to multiple, you know, folks before making the bat. Everybody was trying to sell us their solution and you and your sales team tried to help us solve our problem.

AI assessment note: “your sales team tried to help us solve our problem.”