It has been almost 10 years since the two of us founded HubSpot. If someone had told us then that someday, the company would grow up to be publicly-traded and have over a thousand employees, we would have been cautiously hopeful. After all, the plan from the beginning has always been to build a successful, enduring company.
But, if someone had also said that we’d have a satirical author write a scathing book about us, we would have never believed that. That was definitely not the plan. Besides, who’s going to want to read a book about HubSpot?
Warning: This is our honest take on the book and not a take-down. If you were expecting harsh, retaliatory attacks on Dan or his book, you can safely stop reading. You will be disappointed. This is not that kind of article, and HubSpot is not that kind of company. Instead, we’ll share some of the story, acknowledge some of the lessons learned and attempt to answer some of the questions that we know are swirling around.
The Story Behind The Book
A few years ago, we interviewed Dan Lyons for a job. You may not recognize the name, but you’ve likely enjoyed some of his work. He’s a professional satirist, and a very good one at that. He is known for his sharp, biting wit. He was the author of the once-popular “Fake Steve Jobs” blog and writes for the funny HBO comedy “Silicon Valley.”
Dan had applied for a job and we were pulled into the process. He was looking to transition away from a lifelong career in journalism after a long tenure at Newsweek. He wanted to join the wacky world of tech, an industry he had written about for many years. We respected that. So, we offered Dan a job at HubSpot, and he accepted.
About 20 months later, Dan resigned from HubSpot and then went on to write “Disrupted”. It is a broad criticism of the tech industry including companies like Google, Apple, Facebook, Twitter, Airbnb, Uber, Box, Salesforce.com, LinkedIn, Amazon and Netflix. But mostly, it’s a scathing and sweeping criticism of HubSpot: our culture, our people, our business, our inbound philosophy, our office, our logo, our IPO, our company color, and our annual event -- pretty much everything about us. Dan pokes particularly hard at HubSpot’s culture.
HubSpot is by no means a utopian workplace and we don’t appeal to everyone. In early 2013, we published a slide deck called the HubSpot Culture Code. It’s 128 slides long and details what we believe, how we think and how we operate at HubSpot. The deck has been popular and has received over 2 million views since we published it.
Dan was critical of the HubSpot Culture code deck. We accept that. We understand that not everyone is going to love the deck.
In any case, we’re not too upset. Though we’re disappointed that Dan’s experience at HubSpot was in such stark contrast to that of most of our employees, he is, of course, entitled to his opinion. But it is one person’s opinion, and we’re confident that overall, the HubSpot culture is working pretty well and the data substantiates that. Most of our employees love HubSpot. Enough that HubSpot was awarded #4 best place to work in the U.S. in the most recent Glassdoor rankings. And, we’re in great company -- Facebook, LinkedIn and Google are also in the top 10. We think our culture is a distinct and sustainable competitive advantage.
The HubSpot Business
The criticisms of our culture were not the only thing that surprised us. We were also puzzled by the fact that the book questioned HubSpot’s business and whether or not it was a success. However, we think the data is on our side on this one too.
Very few startups grow the way HubSpot did in its early years. Even fewer make it to a successful IPO. Fewer still keep right on growing.
We’ve reported on several quarters since becoming a public company. Our revenues have grown for the past 5 quarters 50%+ year over year. We had over $180 million in revenue in 2015. Not many companies at that scale grow by 50%+.
But, Lyons would argue, “You’re not profitable!” He’s right. There’s usually a tradeoff between growth and profitability. We’ve been growing revenues over 50% year over year while simultaneously improving our margins by 12 percentage points in Q4 2015 (non-GAAP). We’ve also begun to generate positive operational cash flow. What we’ve shown, and what investors seem to value, is growth plus a path to profitability.
Digging Into Diversity
There are many more things we disagree with in the book, but we don’t disagree with all of it. Dan raises some important issues we have in the tech industry. One of them is the need for more diversity. This is a challenge that HubSpot shares with many of its peers.
The book didn’t spark our desire to improve diversity, we’ve been working on that for a while. But it did remind us that we would be well-served to invest even more in it. We’ve already started tracking some metrics on diversity so we can shine light on the issue. We hope to share some of those metrics publicly next year. In the meantime, we’ve included some of the data we’re currently looking at in the appendix. It’s in keeping with our culture. And, we already have programs in place to improve diversity and we’re making progress. But there is much more work to be done. We both would be thrilled to see HubSpot become remarkable in this area and will be pushing the team and ourselves to help make that happen. Thank you Dan for the kick-in-the-pants. Honestly though, we would have been fine with a bit of a softer kick. :)
Such is life...
As you might guess, this has not been the most fun week we’ve had. But, c’est la vie.
We were upset when we first read the book. We wish the book hadn’t been so harsh towards individual people from the HubSpot team. They are smart, hard-working and caring people that didn’t deserve it. But negative emotions have a relatively short half-life with us. Our emotions have been dissipating quickly and we think they’ll asymptotically trend towards zero over time. Besides, life is too short to hold grudges.
We’re encouraged by all the kind words of support that folks have shared with us both privately and publicly. We particularly loved this post from a HubSpot customer: “Standing For HubSpot.” If you have at all wondered whether all the supportive tweets, articles and comments matter, we assure you that they do. We read every one. Thank you.
The HubSpot story so many of us know is one of being helpful. It’s a story about a fast-growing business working tirelessly to help others grow theirs. That’s the HubSpot we know will endure.
We’re going to go back to writing that story. It’s going to be awesome!!
p.s. We know that there are many questions the broader community has about the book. Though we can’t answer all of them, we’re going to attempt to address some of them here.
1: When people were fired did you actually call it a graduation?
Unfortunately, yes. In certain groups we used the term graduation to describe the event when someone was leaving the company, either because they resigned or we let them go. Why the heck would we do that? Here’s the quick story. We have an active HubSpot alumni group (people that have previously worked for the company). Alumni get together and talk about their careers, the startup ideas they’re working on and generally just hang out and help each other out. Since we call this group “alumni,” we thought that the term “graduation” made sense to use. A while back, we realized that it was a mistake. It was disrespectful and misleading -- not our intention at all. Lesson learned and change already made. We’re sorry.
2. Do grown-up leaders at HubSpot really bring a teddy bear named Mollie to meetings?
Sometimes, yes. Here’s an article that digs into the idea: “Your Customers Are Not Ignorant, Selfish Control Freaks”
Here’s the summary: We think many companies would be better served by listening to the voice of the customer -- or at least, factoring their customers’ perspective into their thinking. We call this “Solving For The Customer” and it is a big part of the HubSpot culture. But, it’s hard to always remember that. Mollie the teddy bear was used as a placeholder for the customer in some of our meetings. A reminder that though we didn’t have a customer there, we should pretend like there was one. Yes, it’s goofy. But, candidly, it works. [Note to selves: Start bringing Mollie to more meetings.]
3. What’s with the 1+1=3 thing? Did you fail math in kindergarten or is HubSpot some sinister Orwellian organization?
Neither. 1+1 = 3 is shorthand for “the whole is greater than the sum of its parts.” One of the central differentiators for the HubSpot product is that it is an “all-in-one” (or most-in-one) system. It doesn’t just do blogging, social media management, business analytics, landing pages, forms, marketing automation, etc. It does all of those things. The beauty of HubSpot is that when different applications are all on the same platform, it makes new things possible. Our favorite example is the iPhone. Yes, it does messaging. Yes, it can take photos. But, what’s awesome is that because both of those are on the same device, you can take a photo and then immediately share that photo. That’s what we call “1+1=3”. Yes, the phrase is unconventional, but it’s useful. And the idea is powerful. We have no plans to stop using the term 1+1=3.
4. How are the working conditions at your company? Is HubSpot really like an overcrowded 19th century sweatshop?
Instead of telling you that our our offices are great, it’s better just to show you. A picture is worth a thousand words. We’re a tad biased, but we think these are pretty nice working conditions. We have stand-up desks, nice coffee machines, exercise rooms and more. Have a look:
|How are the working conditions at your company?|
|How are the working conditions at your company?|
Yes, it does work and it is the exact opposite of spam. It is not the quickest path to getting leads and customers, but it’s the most sustainable -- our more than 18,000 customers can vouch for that. It is based on a very simple idea: As people have increasing power and control over the “inputs” into their lives, it becomes harder and harder to interrupt them with irrelevant, non-useful things. So, the only way to reach them is by pulling them in. Don’t try to invade their world, but instead, invite them into yours. And the way to do that is to be helpful, say useful things and be respectful of their time. It’s not easy to do, but it’s simple -- and it does indeed work. It has worked fantastically for HubSpot and thousands of other companies.
Here are some of the stats we’ve been starting to track.
- Our average employee age is 29.
- Our employee attrition rate is 12.6% on an annualized basis.
- As of December 31, 2015, we had 85 people over the age of 40. (We realize we need to work on this)
- Based on employees enrolled in our healthcare benefits plan (not everyone), we have over 100 employees who are parents, with over 250 children between them.
In addition, every quarter for the last seven years, we have run an anonymous NPS survey of our employees’ happiness. The first question we ask is, “On a scale of 1 to 10 (with 10 being the highest), how likely are you to refer a friend to come work at HubSpot?” Here were the results of our last one, which is pretty similar to the results over the last several years: