Lenny's Podcast: Product | Growth | Career

Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO)

Apr 4, 2024

01:41:44

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Co-founder/CTO of HubSpot, Dharmesh Shah, shares lessons on building HubSpot, contrarian product development, and the importance of leaning into strengths. He discusses decision-making at HubSpot, saving time with 'flash tags,' and aligning values with company culture. Shah's data-driven approach to public speaking and insights on AI's impact on industries add further depth to the conversation.

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Quick takeaways

Maintaining simplicity in business by imposing constraints leads to sustainable growth and prevents complexity.

HubSpot's product development strategy involves removing existing features when adding new ones to prioritize user-friendly and efficient products.

Focusing on serving the SMB segment provided HubSpot with revenue diversification, control over product roadmap, and faster feedback loops for experimentation.

Implementing systems that promote simplicity and value high-conviction, low-consensus ideas can foster operational efficiency and innovation in organizations.

Deep dives

The Importance of Simplifying and Fighting Complexity

Keeping things simple and fighting against complexity is crucial in business to prevent deterioration over time. One strategy to achieve simplicity is by imposing constraints and guardrails systematically within the organization. By focusing on high-conviction, low-consensus ideas and implanting systems that promote simplicity, companies can avoid the pitfalls of complexity that often lead to challenges in growth and sustainability.

Calibrate Decision Effort with Impact

01:17

Law of Urban Dynamics

01:12

The Importance of Solving the Customer Problem in Startups

02:22

The Importance of First Principles and High Conviction Bets in Business

02:32

Introduction

2min

Prioritizing Product Requests and Introducing Xflow Analytics Solution with Vanta Sponsorship

2min

Navigating Entrepreneurship and Public Speaking

11min

Navigating Leadership and Decision-Making at HubSpot

30min

Navigating the SMB Market and Strategic Decision Making

11min

Effective Communication using Flash Tags in the Workplace

5min

Fostering Autonomy and Systematic Decision-Making at HubSpot

24min

Balancing Core Values and Adaptation in Company Culture

5min

Values, Culture, and AI

12min

Dharmesh Shah is the co-founder and CTO of HubSpot (currently valued at $30 billion) and one of the most fascinating founders I’ve ever met. Dharmesh is the keeper of HubSpot’s Culture Code, built ChatSpot (an AI chatbot built on top of HubSpot CRM) and a game called WordPlay (which grew to 16 million users), and also founded and writes for OnStartups, a top-ranking startup blog and community with more than 1M members. He’s also invested in 100+ startups including OpenAI, AngelList, Coinbase, and Dropbox. In our conversation, we discuss:

• The biggest lessons he has learned from building HubSpot

• The importance of leaning into your strengths

• Dharmesh’s data-oriented approach to public speaking

• How he developed HubSpot’s culture code

• The decision-making process at HubSpot

• His contrarian approach to building products

• Why founders and product teams are all fighting the second law of thermodynamics

• How “flash tags” can save your teams time

• How to decide what ideas are worth investing in

—

Brought to you by:

• Explo—Embed customer-facing analytics in your product

• Vanta—Automate compliance. Simplify security

• LinkedIn Ads—Reach professionals and drive results for your business

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Find the full transcript at: https://www.lennysnewsletter.com/p/lessons-from-30-years-of-building

—

Where to find Dharmesh Shah:

• X: https://twitter.com/dharmesh

• LinkedIn: https://www.linkedin.com/in/dharmesh/

• Website: https://dharmesh.com/

—

Where to find Lenny:

• Newsletter: https://www.lennysnewsletter.com

• X: https://twitter.com/lennysan

• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/

—

In this episode, we cover:

(00:00) Dharmesh’s background

(04:20) Fun facts about Dharmesh

(06:31) His data-oriented approach to public speaking

(11:45) Advice for adding humor to your presentations

(15:28) Why he has no direct reports

(18:46) You can shape the universe to your liking

(20:02) Lessons from building HubSpot

(23:43) Contrarian ways of running a company

(37:26) Fighting the second law of thermodynamics

(40:29) The importance of simplicity in running a business

(45:22) Succeeding in the SMB market

(50:29) Zigging when others are zagging

(54:17) When it makes sense to go “wide and deep”

(57:33) Using flashtags to communicate opinions

(01:02:44) HubSpot’s decision-making process

(01:09:41) Deciding what ideas to invest in

(01:15:26) Defining and maintaining company culture

(01:30:46) The potential of AI

(01:37:03) Practical advice for learning AI

(01:40:07) Where to find Dharmesh

—

Referenced:

• WordPlay: https://wordplay.com/article/unlimited

• ChatSpot: https://chatspot.ai/

• Indian-origin entrepreneur buys ‘chat.com’ for over $10 million, then sells, donates $250,000 to Khan Academy: https://www.businesstoday.in/technology/news/story/indian-origin-entrepreneur-buys-chatcom-for-over-10-million-then-sells-donates-250000-to-khan-academy-382907-2023-05-26

• Kipp Bodnar on LinkedIn: https://www.linkedin.com/in/kippbodnar/

• The surprising metric presenters should analyze: https://lars-sudmann.com/the-surprising-metric-presenters-should-analyze/

• SoloWare: https://www.linkedin.com/posts/dharmesh_for-3-decades-now-in-addition-to-my-day-activity-7166500611247583232-kZgb/

• Brian Halligan on LinkedIn: https://www.linkedin.com/in/brianhalligan/

• First Principles: Elon Musk on the Power of Thinking for Yourself: https://jamesclear.com/first-principles

• Peter Thiel on LinkedIn: https://www.linkedin.com/in/peterthiel/

• The second law of thermodynamics: https://en.wikipedia.org/wiki/Second_law_of_thermodynamics

• What is an SMB?: https://www.techtarget.com/whatis/definition/SMB-small-and-medium-sized-business-or-small-and-midsized-business

• Shopify: https://www.shopify.com/

• Relentless curiosity, radical accountability, and HubSpot’s winning growth formula | Christopher Miller (VP of Product, Growth and AI): https://www.lennyspodcast.com/relentless-curiosity-radical-accountability-and-hubspots-winning-growth-formula-christopher-mil/

• FlashTags: A Simple Hack for Conveying Context Without Confusion: https://www.onstartups.com/flashtags-a-simple-hack-for-conveying-context-without-confusion

• What it means to “disagree and commit”: https://news.ycombinator.com/item?id=16949021

• A Simple Decision Framework: Debate, Decide and Unite: https://connectingdots.com/p/debate-decide-unite

• Dharmesh Shah’s Frameworks for Creating a $1 Billion Net Worth: https://hakune.co/dharmesh-shah-networth/

• Zip: https://ziphq.com/

• The HubSpot Culture Code: Creating a Company We Love: https://blog.hubspot.com/blog/tabid/6307/bid/34234/the-hubspot-culture-code-creating-a-company-we-love.aspx

• How defining values and culture helped Airbnb achieve worldwide success: https://lattice.com/library/how-defining-values-and-culture-helped-airbnb-achie

• What is SQL?: https://aws.amazon.com/what-is/sql/

• GrowthBot: https://community.hubspot.com/t5/Releases-and-Updates/Meet-GrowthBot-from-HubSpot-Labs/ba-p/417985

—

Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com.

—

Lenny may be an investor in the companies discussed.

Get full access to Lenny's Newsletter at www.lennysnewsletter.com/subscribe

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Lenny's Podcast: Product | Growth | Career

Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO)

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

The Importance of Simplifying and Fighting Complexity

Turning Affection into Actions: Keeping Simplicity in Product Development

The Strategic Value of Targeting Small and Medium Businesses (SMB)

The Power of Constraints and Systematic Approaches in Business Management

Building a Contrarian and Innovative Strategy

Focus on Depth versus Breadth in Startup Strategy

Strategic Measurement and Decision-Making

Cultural Evolution and Product Innovation

Calibrate Decision Effort with Impact

Law of Urban Dynamics

The Importance of Solving the Customer Problem in Startups

The Importance of First Principles and High Conviction Bets in Business

Get the Snipd
podcast app

AI-powered
podcast player

Discover
highlights

Save any
moment

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Lenny's Podcast: Product | Growth | Career

Zigging vs. zagging: How HubSpot built a $30B company | Dharmesh Shah (co-founder/CTO)

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

The Importance of Simplifying and Fighting Complexity

Turning Affection into Actions: Keeping Simplicity in Product Development

The Strategic Value of Targeting Small and Medium Businesses (SMB)

The Power of Constraints and Systematic Approaches in Business Management

Building a Contrarian and Innovative Strategy

Focus on Depth versus Breadth in Startup Strategy

Strategic Measurement and Decision-Making

Cultural Evolution and Product Innovation

Calibrate Decision Effort with Impact

Law of Urban Dynamics

The Importance of Solving the Customer Problem in Startups

The Importance of First Principles and High Conviction Bets in Business

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