Can you imagine coining not just one, but multiple buzzwords for an industry you ideated, launched and made popular around the world, all from scratch?
HubSpot co-founders Brian Halligan and Dharmesh Shah transformed a massive, tradition-locked industry that was trying to tell people what to think and what to buy into a proactive marketplace where the customer is indeed always right, not always ignored.
Halligan recently rehashed how the duo transformed an industry with inbound marketing and created a brand out of a product that is less than a decade old.
The two met at Massachusetts Institute of Technology (MIT) and discussed starting a company themselves.
Their initial idea: LegalSpot, a marketing business focused on the legal industry. LegalSpot quickly pivoted to HubSpot, an all-in-one marketing automation solution that helps marketers streamline inbound marketing activities.
Flash forward a few years. Consumers now had more tools than ever before to tune out interruptive and annoying marketing activities, and he quickly realized that many of the strategies that had worked for his team just years before were no longer effective.Halligan says he knew it was the right idea because of the time he spent working in the venture capital space, advising companies on how to expand based on how he grew Parametic Technology (PTC).
“These VC-backed companies were investing huge amounts of money in trade shows, PPC, and print ads and not seeing any results,” Halligan said. “On the other hand, Dharmesh was still at Sloan and blogging his way through school on OnStartups. People loved what he was writing, and he was earning people’s attention for free. Dharmesh and I realized then that inbound marketing was the future, and started the company shortly after he graduated.”
The New Marketing: Inbound Marketing
As explained on its company blog, HubSpot built its company on this new way of marketing:
Instead of interrupting people with television ads, inbound marketers create videos that potential customers want to see. Instead of buying display ads in print publications, they create their own blog that people subscribe to and look forward to reading. Instead of cold-calling, they create useful content and tools so that people call them looking for more information. Instead of driving their message into a crowd over and over again like a sledgehammer, they attract highly qualified customers to their business like a magnet.
Consumers were making purchasing decisions by using Google, reading blogs and asking their networks on Facebook and Twitter to learn about products and services before they spent a dime. Inbound marketing complemented this new purchasing cycle.
This meant that HubSpot had to practice what it preached. It had to prove that inbound marketing would actually work before anyone would lay down the money for it.
HubSpot’s Success Story
HubSpot landed 1,000 paying customers three years after its launch in 2006, and they did so without making one cold call, which was against its policy.
According to its blog, HubSpot’s revenues grew 50% in 2014 to $77.6 million and added 239 employees in 2013 alone. It opened a European headquarters in Dublin to make HubSpot more accessible to businesses around the globe. DubSpot, as as the company likes to call its Irish office, now has more than 50 employees across marketing, sales, services and engineering.Today, HubSpot is a publicly traded company, and Yahoo Finance lists Hubspot’s market capitalization at nearly $900 million.“We really wanted to drink our own champagne right from the start at HubSpot. We were building our company on the notion that the traditional marketing model of interrupting people until they paid attention was broken,” Halligan said. “So in addition to creating a great product, we needed to lead by example to show that remarkable content and earning people’s attention was not only worthwhile, but effective.”
HubSpot isn’t just helping itself though.
According to the same blog, HubSpot customers generated 91 million new contacts in 2013 and used inbound marketing to attract 2.4 billion page views to their websites.
What’s HubSpot Up To Now?
Recently, HubSpot launched SideKick, a Rapportive-like tool that tells you when people open emails or click links in the message body.
“We’re setting our priorities for next year and continuing to hire great people. The good news is I’m having as much if not more fun at HubSpot now than I was the way we started — we have a great team, a great product and a great company. I feel lucky to work there every day,” Halligan said. Halligan says HubSpot is cranking on a lot of things right now, from the launch of its sales software tools, SideKick and the HubSpot customer relationship management (CRM) system.
As Halligan told us, what separates good content from great content is a willingness to take risks and push the envelope. The same attributes differentiate good businesses from transformative ones.
How many no’s are you able to handle before you get to a yes? Do you think you could handle the risk of starting your own business, why or why not? So, the question now is: Where do you want to be on that spectrum?