‘We didn’t know what the heck we were doing’

This tech company has reached $1bn in annual recurring revenue, but its CEO says the journey has been tough going the whole way.

Hubspot co-founders Brian Halligan and Dharmesh Shah. Source: Supplied.

Marketing and sales software provider HubSpot has just passed 100,000 paying customers and $1bn in annual recurring revenue, and its co-founder and CEO Brian Halligan says the company’s 15-year journey has been a story of ‘one step backward, two steps forward’.

Speaking to The Australian to mark the dual milestones, Halligan says HubSpot’s path to Wall Street success has been anything but easy. The failure rate for start-ups is about 90 per cent, and the executive says in the early days “we didn’t have any money, we didn’t have any customers and we didn’t know what the heck we were doing.”

“I would say it’s been tough all the way,” Halligan says.

“It‘s been a constant evolution but we’re also constantly evaluating where we are at. For other start-ups, I’d say look at yourself in the mirror and ask really tough questions. And don’t be afraid to take that step back so you can take two steps forward. That’s sort of how I think about the journey.

“The more we take those steps back and really reflect on what we‘re doing, the faster we grow it seems. And we haven’t been shy about doing that. We made lots of decisions along the way that were a little counterintuitive that probably slowed growth down a lot in the short term but really enabled us to speed up a lot in the long term.”

Many company founders depart their start-ups once the company hits a certain size, but Halligan has stuck around since the company’s inception in June 2006. Halligan founded HubSpot with Dharmesh Shah at the Massachusetts Institute of Technology (MIT), and it’s grown from its university beginnings to a $30bn company aiming to be an ‘all-in-one’ solution for a company’s marketing, sales and customer relationship management efforts.

Hubspot co-founder and CEO Brian Halligan. Source: Supplied.

Halligan says he feels like HubSpot, despite hitting its dual milestones, is still in its early innings.

“You guys don’t have baseball down there, but it still feels like in terms of the stuff in our heads that we want to deliver to our partners, customers and employees, it still feels quite early on the journey,” he says.

“I‘m still having fun. I like my colleagues. I like our mission a lot. I’m very mission driven so I don’t see any huge reason why I have to leave – they haven’t fired me yet – that’s a good thing.

“I like the journey we’re on. I like this part of it more actually than I did the early stage. People always say, oh, you must miss the early stage – I don‘t miss it at all. We didn’t have any money. We didn’t have any customers. We didn’t know what the heck we were doing. Now we have leverage: we have customers and partners and our product works. We’ve got cash in the bank. These are the good old days.”

The executive adds that Australia is a ‘great, not good’ market for HubSpot, and that the company’s success locally continues to be a source of surprise.

“Increasingly, what I think is kind of cool about Australia and New Zealand is the amazing partners we have there like our friends at Canva, Atlassian and Xero. It’s not only a nice market for us, it’s growing nicely, we have a big presence there and it’s going to get a lot bigger. It’s becoming home to some of our most important strategic partnerships,” he says.

Hubspot co-founders Dharmesh Shah and Brian Halligan. Source: Supplied.

“It’s really starting to kick off, and it feels like the Atlassian folks started it and they showed other people how to do it. And it’s really starting to roll. I’m super impressed with the innovation that’s coming out of that market. Australia and New Zealand are becoming a tech hub. It’s awesome.”

As for advice to his former self, Halligan says he would tell himself in the early days of the company to focus on building relationships between HubSpot and prospects, to be better at turning the prospect into a customer.

“I’d also say we were a little addicted to the hockey stick growth and to the sales process – and we did get quite good at it but what we should have been more addicted to and more obsessed with is the ratio between HubSpot and the customers, and how to delight these customers and get them to actually sell for us?,” he says.

“It took us a while before we really nailed HubSpot. We had a very ambitious vision for HubSpot and it took us a while before we really nailed it. We’re nailing it these days and expanding it but I was a little too obsessed with ‘how do you get a customer versus how do you delight a customer?’ I wish I had woken up to that a little earlier.”