Hubspot - Experience Is Not Crucial - Ideas Are!
HubSpot is a top-tier full stack of software for marketing, sales, and customer service. The term ‘inbound marketing’ originates from this company - and they’ve been living it for the last 15 years!
Today, Hubspot has a net worth of $9.4 billion, but the 15-year long road hasn’t been all milk and honey. This is the story about the two MIT graduates who committed to business excellence to change the face of internet marketing forever.
The Thinking Behind Hubspot
In 2004, grad students Brian Halligan and Dharmesh Shah met at MIT.
“HubSpot was born out of the loins of MIT.”
They attended business school, sharing common interests, and discussing topics of importance to both of them, including marketing and sales.
What an expert eye could notice at the time (and what we know very well today) was a shift in the way people shopped and bought stuff. Aggressive old-school marketing was no longer doing the job. Consumers adapted and became fully ignorant of interruptive bids for their attention.
The two students realized: people didn’t want to be interrupted by marketers when shopping. They didn’t want to be harassed by salespeople. They wanted help.
That’s where Halligan and Dharmesh saw potential: there should be a drastic change in the way businesses market their products. A more humane approach. The inbound marketing approach.
This insight was HubSpot’s cornerstone.
By 2005, they both got their university degrees and were fully equipped to start not just a brand, but a movement.
They wanted to help businesses achieve their goals without getting ruthless, choosing a friendly and empathetic approach instead. In 2005 they began blogging about inbound marketing and their ideas. They wanted to showcase their software product and see where it gets them. The next year, they built a HubSpot community where people with various businesses could share their experiences, ask questions, connect, and read useful articles.
Their target group was small and medium businesses - those who couldn’t afford aggressive and expensive marketing, but desperately needed tools to help them gain more visibility, and turn strangers and random website visitors into buying customers.
In Halligan’s words:
“Your success with inbound marketing and sales is much more dependent on the width of your brain than the width of your wallet!” This approach turned out to be great. They acquired their first three customers in 2006, drawing from readers of their blog and members of the HubSpot community. By the end of the year, that number topped 8000!
So, how did it happen?
Practice What You Preach!
Although HubSpot relies on both inbound and outbound marketing, they don’t really share much info on specific spending figures. The executives say that inbound leads are in general cheaper to acquire, which is the main point of this approach. They simply practice what they preach by making inbound marketing crucial to their growth.
One specific area of inbound marketing where HubSpot truly excels is content marketing. Try googling any business and marketing-related topics, and see where it takes you. We guarantee that one of the top 5 results will be HubSpot’s content. Their website sources offer mostly expert blog posts, tools, and webinars.
The bottom line with this approach is that investments into paid marketing can be as aggressive as you want, but if you don't solve the problems of your customers and answer the questions of your leads, you are much less likely to succeed.
HubSpot proved with their own example.
A Peek Into HubSpot’s Tools
So far, HubSpot’s story sounds perfect, doesn’t it?
Great plan to analyze and conquer the market... What could possibly go wrong when you put 5 business school students in a startup?
As Shah sometimes jokes when talking about Halligan: More than a decade ago, I got to meet this super clueful guy at MIT. The only problem was: he was in business school!
Shah was also from business school, as was the rest of their team including their VPs for Marketing, Sales, Customers, and Engineering!
As we all know - business students know very little about alternative forms of business such as startups, so something has to go wrong. That one thing was focus.
One of the most common advice young startups receive is to focus their efforts on only one thing. That way, they could become proficient at solving one problem and grow from there.
Well, the HubSpot executive team wasn’t feeling like going down that road, so they did the opposite: they started with a bunch of products instead of just one.
How they managed to juggle a large variety of initial products - remains a mystery.
Nevertheless, throughout these 15 years, they’ve provided their users with numerous tools for social media marketing, content management, landing pages, SEO, web analytics, and customer support.
To help their users optimize their businesses’ online presence, HubSpot team built integrations for SugarCRM, Salesforce, Microsoft Dynamics CRM, and many more.
They took it even further and created the HubSpot Academy where users can attend both comprehensive certified courses as well as short, practical lectures. They mostly offer knowledge in marketing, inbound marketing, SEO, social media, and sales.
Here are some of HubSpot’s products to give you a clearer picture about the versatility of their approach:
Free HubSpot CRM
This tool is HubSpot’s core product that helps organize, track, and improve relationships with leads and customers.
CMS (Content Management Software) is HubSpot’s main tool for managing website content.
Marketing Hub is the tool they built to help businesses grow their traffic, convert visitors into customers, and create inbound campaigns at affordable prices.
This software saves businesses tons of time as it automates manual tasks (invoices, emails, meeting appointments), gets deeper insights into prospects and closes deals faster.
One of the most important aspects of good marketing is provided through Service Hub - connection with customers. This software is designed to help businesses convert customers into advocates of their services!
Between 2006 and 2011, HubSpot published a free Website Grader that analyzed more than 4 million websites. This tool received many awards including the Interactive Media Award (2007, 2008), Webby Award (2008, 2009), W3 Award (2008). However, in 2011 they wanted to give more to their users, as marketing is so much more than website rating, so they replaced this tool with the Marketing Grader. This one could analyze a variety of factors in 30 seconds and give you an overall marketing grade on a 100-degree scale.
As great as Marketing Grader is, it turned out that Website Grader is irreplaceable, so they brought it back in 2015.
According to Hubspot’s executives, they were pioneers in promoting Twitter as a marketing and PR tool. Due to great interest, they held a webinar on the subject in 2008, and used Twitter as a discussion tool during the lecture. Today, it’s hard to imagine a conference or a webinar without Twitter discussions running in the background.
This brought HubSpot amazing visibility. In 2008, their popularity skyrocketed, as many of the hashtags for their webinars became trending topics on Twitter. Since then, more than 5 of their webinars remained among the global top ten trending topics, making Hubspot one of the major Twitter stars!
Similarly to Website Grader, Twitter Grader helps you build better relationships with your customers through this platform.
In 2010, the company acquired Oneforty, the Twitter app store.
Every business that wants to build a respectable online reputation needs to optimize their website content. The young HubSpot executives simply didn’t know how to stop with one product - so they built an SEO software too!
We need to stop here, because the list of products HubSpot has to offer by 2020 is hard to fit in one article. But, if we already know that they don’t charge their users much, how did they manage to build all of these tools? How is it profitable for them?
Between 2007 and 2010, HubSpot’s yearly revenue increased from $255,000 to $15.6M. They started out by serving small businesses, but in 2010 they elevated upmarket to include larger businesses, with up to 1000 workers. This gave them a nice financial boost, and by 2011, HubSpot reached $29M in revenue. They jumped to $53M in 2012, and topped $180M in revenue in 2015.
However, they didn’t do it alone. The VC funds were an unavoidable step, and over the last 15 years, they raised $131M of venture capital. In 2007, General Catalyst provided them with $5M, followed by $8M from Matrix Partners in 2008.
In 2009, Scale Venture Partners doubled that figure and supported them with $16M. Over the next couple of years, they were funded by various VC funds including Sequoia Capital, Salesforce.com, and Google Ventures.
What started off as an idea in the head of a couple of business school grad students, ended up as one of the biggest marketing software services providers in the world.
Their focus on bringing a change to the world of online marketing and commerce helped them overcome their lack of knowledge about startups and instill new marketing trends that changed the face of online business forever.
Today, HubSpot hosts more than 78,000 users from more than 120 countries, proving that good ideas are simply unstoppable - regardless of experience!