krunalsoni

Everything I learned about strategy in building HubSpot: Watch the competition, but never follow it: I got this line from Arnoldo Hax, my strategy professor at Sloan, and repeated it so many times that it is ingrained in HubSpot’s DNA. It is relatively obvious at this point that HubSpot competes with Salesforce.com (a formidable competitor). We very carefully watched them, but tried not to “follow” them—see next lesson. When everyone is zigging, you should zag: Regardless of what you think of Peter Thiel’s politics, he wrote a really good book on startups called Zero To One. In it, he talks about how you need to be right about something that everyone thinks you are wrong about for a long time. This type of “zagging” worked for HubSpot three times. First, we decided to focus on SMB (more M than S, btw) and stuck with it when everyone and their brother thought we should move to the enterprise. Second, we decided we would move from a marketing application company to a CRM platform company, competing with Salesforce, when everyone and their sister told us we were crazy to try because they were too hard to compete with. Third, we decided we would “build” (craft!) our CRM in-house as opposed to acquiring our way there when everyone and their cousin told us that we needed to follow ye olde CRM M&A franken-playbook. Don’t trash talk: I somewhat recently watched the U.S. Open tennis finals. In the remarks after the matches, I always appreciate how respectful the players are toward their opponents and how they express it. I feel the same way about Salesforce; they are a very good company that is hard to compete with, and no good comes in “poking the bear.” [h/t to my co-founder Dharmesh for coming up with the “poke the bear” analogy and many other brilliant things] Creating a category is harder than it looks:  HubSpot created the “inbound marketing” category.  Pulling that off involved writing about zillion blog articles, giving a jillion speeches, writing a book, running a conference, etc.  We invested way more energy in creating the inbound marketing category in the early years than we did in marketing the HubSpot product.  …So, when we wanted to go into the sales category, we thought we could just re-run the same playbook for “inbound sales.”  Failed.  When we went into CRM, we thought we’d create a new category called CMR, “customer managed relationship” software.  Failed.  When we released our CMS, we thought we’d create a new category called COS, “content optimization system.”  Failed.  In retrospect, we caught lightning in a bottle with “inbound marketing.” Either you are eaten by a platform or become a platform:  In the early days of HubSpot, we used to pitch the company as “Salesforce.com is to sales as HubSpot is to marketing.”  Under our breath, we’d always say “until Salesforce.com wants to become the Salesforce.com of marketing.”  Well, one day they did.  They picked up Exact Target, Pardot, Radian6 and Buddy Media all within a few months and built themselves a very large Marketing Cloud business.  We decided at that point that we ought to pivot from being a marketing app to a CRM platform ourselves, lest we be eaten.  This turned out to be a very good call in hindsight.  [h/t Steve Fradette, co-founder of Toast]