Has HubSpot Taken Over the Startup World From Salesforce?

So for many years, I was one of those guys.

I never loved Salesforce the company, nor personally enjoyed using the software.  But I would tell every startup I invested in or worked with to move onto Salesforce — at least once they hire a real VP of Sales.  I told them they’d need to get there anyway.  I told them their VP of Sales would be used to Salesforce and pick it as their CRM, and you had to let them pick their tool of choice.  And I told them you sort of needed to know Salesforce the product and the API to really understand how SaaS worked.  And that you’d likely integrate with it at some point anyway.

That advice was good advice for many years, but it’s broken down.

Now I just see so many fast-growing startups not just starting on HubSpot, but staying on HubSpot.  Not leaving once they hire a VP of Sales, or hit $10m, or $20m in ARR.

The first time I personally saw it was when one of the top startups I’ve invested in, Gorgias (the #1 contact center for e-commerce) crossed 10,000 customers … and said they were sticking with HubSpot.  That in fact, they saw no reason to leave.

Now, in all fairness to my initial analysis above, Gorgias doesn’t play in the Salesforce ecosystem.  If you do, I still think you need to run Salesforce SFA / CRM.  You have to almost, because if you don’t, you’ll never build a great integration.

But for the rest of us, kudos to HubSpot.  They had a crazy vision, which was to expand from marketing into sales.  Where they had almost no initial customer traction.  But it worked.  And they stayed the course.

Fast forward to today, it’s a huge business, at $500m ARR or so growing 50%!

The final aha moment I had was at SaaStr Annual 2022.  Both of HubSpot’s co-founders came and spoke together about the journey. It was amazing, you can watch the session below.

To kick it off, I asked the packed crowd of 800+ how many founders were using HubSpot.  It seemed like almost every hand went up.  I was expecting 15%-20% at most.

Now, does Salesforce care?  It’s a meta question for all of going upmarket.  As a top Salesforce exec told me recently, the big push is all for $50m-$100m TCV deals today.  That’s what it takes to scale their business at $30B in ARR.  So startups and SMBs are just … hard for them to focus on.

But that’s where HubSpot focuses every single day.  Even in brand new markets, where the odds, at first, seemed against them.

 

Published on January 5, 2023

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