At SaaStr Scale this week, Yamini Rangan, CEO of HubSpot joined us, and I thought it was really an A+ discussion.
We’ll share another post on the convo with a summary of all the learnings, transcript, the podcast etc. — but I thought I’d share my Top 10 Learnings ahead of that while they are top of mind:
1. HubSpot has to sell to more stakeholders now. Just like we all do. While not a surprise, it was very helpful to hear Yamini share just how much their sales motion has changed since Q1’22 — as it has for most of us. They have to sell to more stakeholders, to now prove to CFOs and others that the value is there, and more. For many of us, simply selling to line of business owners isn’t enough anymore today. Even HubSpot is seeing the same.
2. HubSpot Still Has to Do RFPs : While just a passing comment from Yamini, it really resonated with me. If at almost $2B in ARR, and a market-dominating brand, HubSpot has to still do RFPs … even when selling to medium-sized businesses … well, get used to it. You’ll be doing them forever, too. 🙂
3. Marketing spend isn’t down per se, but you really have to show ROI now. Marketing spend is still there, but it’s hyper-focused on short-term ROI. The rest of spend is being cut.
4. NRR is Metric #1. More Than Sales. This is a long-term theme on SaaStr, but it was interesting to me just how much this is Yamini’s #1 north star metric. Far more than sales. Even selling to SMBs, HubSpot gets half its growth at scale from its installed base. More on Yamini’s thoughts here.
5. The Best Way to Drive up NRR? Put the Incremental Dollar into Product. I asked Yamini where to put the incremental dollar — into Sales or into Customer Success? The answer: Product. I loved this answer. I strongly believe in investing as much in Customer Success as possible. But ultimately, in many cases, Customer Success is putting band-aids on product issues. Solve them for real, rather than just with more bodies.
6. Put More Into Your Free Edition, Not Less. Something we all can and should learn from HubSpot. They give more away free now, not less. And see more and more customers start off Free, not fewer. Yamini strongly believes this makes your product better. Because Free editions just have to be easy to use. A related post here.
7. Channel Partners Are an Amazing Moat. But You Have to Enable Them. Direct sales aren’t a moat. We’ve talked about how successful HubSpot has been in the channel and with agencies, and Yamini really went deep on just how critical a motion is for them. They have 3 motions — PLG (for 1-10 sized businesses), Sales-led, and Channel-led. Yamini made the key point that Direct isn’t a moat, but Channel is. Do a deep dive on HubSpot’s channel strategy if you sell to SMBs. It’s far larger and more critical than you might expect. And Channel partners tend to standardize on just one app they recommend and deploy.
8. Pick Your Top 8-10 Countries When Going Global. Serve The Rest Mainly with English and the product as is. A great simple insight into scaling globally. 50% or so of HubSpot’s revenue is international. You can’t do it all, so HubSpot picks its top markets and really leans in there. Put resources and ultimately teams in your top 8-10 markets over time.
9. $6 Spend in EcoSystem for Every $1 Spend Directly on HubSpot. Build an Ecosystem. A great reminder of how much bigger what you do is than just what you charge for it. Invest in that ecosystem. Your revenue and ACV is just a small part of it.
10. It’s a Long Path To Change Your Market Positioning. The evolution of HubSpot as a marketing solution to a true CRM took years. It seems like HubSpot became a CRM product versus just a marketing automation product overnight, but in reality, it took many years. Leaning heavily on HubSpot’s vast content base was key here.
11. The Nonconventional Can Work. For HubSpot, it was Going from SLG to PLG. HubSpot is one of the few that went from a paid-only offering and a sales-driven-only offering to one where the majority now start off on a Free product! This is very rare. But that doesn’t mean it can’t be done. Key to this big change is that the Free users and the Free edition are one of the Top 5 Goals for the company. If it isn’t, rarely does a new initiative of this scale go anywhere.