OnStartups

Agent AI: Connecting The Dots With New Newsletter

dshah@hubspot.com (Dharmesh Shah) — Sun, 19 Nov 2023 18:37:58 GMT

tl;dr: Earlier this week, I launched a new, A.I. focused newsletter on agent.ai.

Why Another Newsletter?

I've been digging into A.I. for a while now, and I just wanted a convenient mechanism to share things I've learned in the hopes that it'll help Connect Dots both for me and for you.

Also, I've never created a newsletter before, and was curious to learn more about how they work and try out one of the newsletter platforms. I started on Substack, but ended up moving to Beehiiv -- primarily because Beehiiv has an API and Substack doesn't.

Some day, if this is successful, I'm going to want to integrate Beehiiv to HubSpot.

Here's the first post which demystifies Agent AI -- and tries to come up with a simple definition:

What Is Agent AI And Why All The Excitement

The newsletter is completely free, like most things I do.

Hope you'll check it out and subscribe to the Agent AI Newsletter.

Thanks for the support.

-Dharmesh

5 common mistakes by first-time startup founders and how to avoid them

dshah@hubspot.com (Dharmesh Shah) — Thu, 22 Sep 2022 14:52:21 GMT

The following is a guest post by Arjun Moorthy, founder of The Factual. Arjun and I have known each other for a long time, originally when he was a member of the HubSpot leadership team. He's one of the smartest people that have come through the halls of HubSpot. -Dharmesh

Startups are hard. 90% fail, 10% within the first year itself. If you’re a startup founder you already know these statistics and yet you are irrationally proceeding forward. Bravo! I did the same thing six years ago and having just successfully sold my company I’ve learned a few hard lessons that I’ll share below in the hopes that you avoid them and improve your probability of success.

Hiring full-time employees before product-market-fit

As Marc Andressen said, getting to product-market-fit is the only thing that matters in the early years of your company. Simply put, do you have something that people really love. Until this point you will be frantically trying many ideas, sometimes weekly. During this time any one other than a co-founder will soon get frustrated by the changes of direction and eventually wonder if the compensation they are giving up on elsewhere is worth it.

I made this mistake three times before learning this lesson and more than the money lost I feel bad that I put those early employees through this very schizophrenic period.
Deprioritizing offshore talent

Saving money is crucial in the early days. No surprise that Google and many other great companies started out in garages. But the biggest expense is labor and given the quality of talent around the world, and tools to collaborate with them, hiring offshore is the best way to save money early on.

At The Factual we hired talented designers and engineers in Argentina for $35-50/hr where the timezone overlap was pretty good with the US west coast. CEOs I know found similar impressive talent in Portugal, Spain, Ukraine, and Vietnam for $20/hr or more. Occasionally, we hired US and Canadian talent in rural towns, or working from cheaper areas abroad. And with few exceptions we found offshore talent to be reliable and easy to work with.

I should mention that while offshore talent is impressive they will not solve problems for you. Like most other contractors, they will do as you ask them. So use them for precise efforts rather than vaguely defined tasks.
Holding on to first idea far too long

Your first idea is very likely going to fail. This may seem like a gross generalization, especially since you probably just quit a job to launch your startup based on an idea you think is very good. But success with startups, at least in consumer, usually comes from insights that no one else has. And such insights are seldom read or found in a survey but rather learned through failure. So the key to success is to iterate fast through ideas and get those insights quickly.

I built a complete product for my first idea before finding out people wouldn’t use it. A simpler landing page test might have told me the same for far less money and time. It’s easy to think a landing page can’t possibly capture the product’s promise but if you can’t write it out in text and get users to sign-up then you don’t know what problem you’re solving and who you’re solving it for.
Building a bigger MVP than necessary

Most founders have a grand vision for the solution to a thorny problem and set out to build an expansive product, albeit in stages. But product form factors like a mobile app or website are far larger undertakings than people realize, even if you really try to minimize the feature set. Just standing up a site or app, getting reliable login/authentication, having useful onboarding, ensuring responsive layout etc takes a ton of time and you haven’t even got a feature yet.

Instead, find the smallest product area you can test with. That may be a simple newsletter but this was our first hit product. And its built-in retention means you are building an audience first, which will be crucial when you do have a more robust product to test.
Not having a marketing co-founder

The number one thing investors look for in a startup is high growth, typically 10% month-over-month or more. That’s because it’s an easy signal for product-market-fit and a business that scales. But getting to high growth is very difficult and requires constant experimentation with new marketing channels and strategies.

A marketing co-founder is essential so that he/she focuses on growth every day and is not distracted by other things. In our startup we had a technical co-founder and a product co-founder/CEO. So neither of us focused on growth exclusively and we never hit the 10% m-o-m growth rate consistently. When we finally hired our marketing co-founder (5 yrs into the journey) it was late and had we done this earlier we would’ve likely have had more steady growth.

Bonus lesson:

Some of the best ideas above came from other startup co-founders. Talking with other founders was often the best source of advice and I had a regular group of four founders who met every quarter for dinner. Beyond the tips, it was great to commiserate with them and realize that my mistakes are not unique. Hope you find your tribe during this incredible journey and drop me a line if you have any questions: arjun dot moorthy at gmail dot com.

Sorry, Must Pass

dshah@hubspot.com (Dharmesh Shah) — Sat, 30 Apr 2022 16:52:21 GMT

The following is an iteration of a blog post I wrote 15+ years ago. Version 1 of that post markedly improved my life, so I decided to periodically update it. The most recent update was Feb 26, 205. You can access/reference this post by visiting SorryMustPass.org.

Greetings,

Thanks for reaching out about your startup, project or offer to introduce me to someone awesome.

Sorry, but I must pass.

During the two years of the pandemic (which now seems like an eternity ago), I took stock of my life -- and my schedule, and have decided to make some changes in the hopes of creating more harmony and joy.

One of my biggest weaknesses in life is that I too often say yes. I'm passionate about startups. I get excited about new ideas. I love making new connections online with people who have shared interests. And, it's so much easier to say yes than it is to say no. “Yes” is more fun and carries less guilt (in the short term).

However, I've learned the lesson that every time that I say yes to something new, I am effectively saying no to something else. And, I've already said yes to way too many things, and so have to say “no” to you. No, I can't accept a request for a call, meeting or introduction. I'm not going to be able to review your startup or project. Embarrassingly, I'm unlikely to be able to respond to your email (though I do read just about all of them).

Although my heart wants to say yes, my schedule says no.

I know you feel like you're asking for so little (“I just need 15 minutes for a quick call…”), and you are. You may even have been introduced through a mutual acquaintance I know and respect. But, there are just not enough hours in the day, or days in the week (I work all 7) to review or respond to all those that reach out. I confess that I am overwhelmed. My sincere apologies. I wish I could bend the laws of space and time, but unfortunately, my past efforts at doing this have proven futile.

Here's a bit more detail on my professional priorities:

My #1 priority, by a long shot, is my company, HubSpot (a CRM software company). I am emotionally, financially and morally committed to HubSpot. I want HubSpot to be successful. By my definition, success is making those who believed in you look brilliant. So, I work very hard to make HubSpot customers, employees, partners and investors look brilliant. If you are an entrepreneur yourself, I think you can likely appreciate what an all-consuming activity it can be. There is precious little time for anything else.

What little professional time there is left, I mostly spend sharing posts online. My personal mission is to help millions grow better, so I try to contribute content and make the occasional podcast experience where I can get leverage on my time (I like to do things at scale). I also have a YouTube channel (see OnStartups.tv), but haven't been posting to it as often as I should be (I'm camera shy).

Over the past 15+ years, I've been an active angel investor. But now that I've crossed the 100 investment mark (time flies when you're having fun), I've made a deliberate decision to slow-down my angel investment pace. I know I'll be missing some great opportunities, and the chance to work with some great founders, but I'm at peace with that.

And, as it turns out, I have a bit of a personal life too (though some might argue that point). So, when I'm not “working” (I use the term loosely), I like to spend it with my wife Kirsten, and my son (who's 13 now). Time really does fly.

As a fun project I started with my son (he's learning Python programming), I've been working on WordPlay.com - Think of it as Wordle Unlimited. (You should check it out -- it's fun!) My time on WordPlay is exactly that -- play. I love building things, and the whole point of it all is doing what you love.

Most recently, my passion project has been agent.ai -- the #1 professional network for AI agents with over a million members.

So, back to my Sorry Must Pass stance.

My general philosophy in life and in business is to do fewer things, better.

Do fewer things, better.

Wish you the best with whatever you're working on.

Thank you for your patience and understanding.

Sincerely,

Dharmesh (@dharmesh)

Why I Built FirstWord, The Unofficial Wordle Trainer

dshah@hubspot.com (Dharmesh Shah) — Mon, 31 Jan 2022 18:40:39 GMT

Last weekend, just for fun, I hacked together a simple web application called FirstWord. Not exactly sure how to describe it, but it's kind of a trainer to make you a better Wordle player. It grades your first word guess (hence the name FirstWord). So, it's kind of a "word grader".

Wait, what's Wordle you ask? Well, it's all the rage. A simple word game where you have to guess a word in 6 tries, as the game gives you clues about your prior guesses.

In any case, I built the app in a couple of hours on a Saturday, launched it on a Sunday. In the ensuing 7 days, it took off. Over 200,000 words were submitted to FirstWord in its first week. Now, even after the initial boost has waned, the app still gets 1,000+ people a day using it. This kind of surprised me a bit, because it's a simple app, built to train you on a word game.

So, those of you that know me (I'm one of the co-founders of HubSpot), might be wondering: Why? Why would you spend hours building a simple tool for a game?

Here's some background:

1) I have an 11 year old that's taking an online beginner's Python programming class (on OutSchool). It's a little tricky for him, because he's only in 5th grade and hasn't covered boolean logic, functions and other math fundamentals that are helpful for learning to code. But he's making great progress -- and it brings both him and me joy.

2) What he's building is a very simple racing game (which teaches him about 2D geometry, why random numbers are important, etc.). But, I thought it might be helpful for him to see the kind of thing one could build in Python -- and launch to the pubic.

3) Though we didn't go into the details, he got exposed to everything from picking a domain name, "launching" the app, watching Google Analytics (and getting excited by the realtime dots that popped up all over the world), running SQL queries to see how many words had been submitted, etc.

Not bad for a weekend project that took me only a couple of hours to code (and then a few more hours to learn how to deploy the way the cool kids do it). Which brings me to the other reason I did it.

I learn best by doing. By just getting in there, cranking out some code and doing it. There have been a bunch of things I've been interested in learning. And, the tutorials and such only really get you so far.

Here's my partial list (all of which I wound up having to dig into for FirstWord as it exists):

1) Serverless functions (especially as web apps)

2) Vercel (a great place to deploy serverless web apps with ease)

3) Flask (instead of Django) as my web framework

4) DeSo login (DeSo is a web3 social network with its own blockchain)

And, at the end of the day, I did it because I enjoy programming. I enjoy building things. And, it's nice to build something that my friends and family can enjoy. Most of the time, I'm building business-y apps or personal tools to give myself superpowers.

Some people go to their woodshop on the weekend and build something. I don't have that skill. I code.

Now, I just have to resist the temptation to build my own word game (which FirstWord has sort of already become). Because I really love word games.

An Alternative To Freemium That Worked For HubSpot [video]

dshah@hubspot.com (Dharmesh Shah) — Tue, 03 Aug 2021 16:15:19 GMT

In the early days of HubSpot, I somewhat accidentally ended up discovering a new approach to freemium that wasn't really freemium.

Here's a short (1 minute 15 second) video clip on what I found that worked brilliantly for HubSpot and helped us drive spectacular early reach.

Simple Frameworks For Success (Full Video + Transcript)

dshah@hubspot.com (Dharmesh Shah) — Thu, 08 Jul 2021 05:02:48 GMT

I was recently on The Hustle's "My First Million" podcast with Sam Parr and Shaan Puri. I'm a fan of the show, so it was a lot of fun to be on as a guest.

One quick apology before we jump in: I try not to be too braggy -- but I balance that with transparency and openness. Sam and Shaan asked me several questions about what it's like to be a billionaire, and I answered them openly and truthfully. (They did warn me beforehand and gave me the option not to answer).

And, The Hustle team decided that having "billionaire" in the title of the episode will attract more viewers -- so here we are. :) In any case, it's a fun episode and we cover a lot of different topics that I'm hopeful you'll find useful.

The Hustle My First Million Episode #197

Frameworks To Become A Billionaire

Listen on Apple iTunes

Full Episode Transcript Below

Sam: Oh, we're live. Yeah and so -

Shaan: Okay. And just quick audio check. Are we all good? So we don't have to restart.

Sam: No.

Shaan: Is it the right mic?

Sam: Yeah.

Speaker 1: That's the right mic. You sound a smidge loud on my end.

Sam: Mm-hmm (affirmative).

Shaan: Okay. I might just move it further away, or be quieter.

Speaker 1: Oh, that sounds better.

Sam: Your camera's crooked. I don't know if you're stopped using the fancy camera?

Shaan: It's still the fancy camera, but the tripod is not as fancy.

Sam: Got it. Okay.

Shaan: Yeah. It's going to trigger every OCD person that watches this [inaudible 00:00:35]. Goddammit, how is he slanted sideways?

Sam: Okay.

Shaan: Okay, cool. Go ahead.

Sam: I don't remember what I was going to say, but right before you came on, I was asking Dharmesh what he listens to. And he says that he listens to us almost every day for the past 60 days.

Dharmesh: Yeah.

Shaan: Amazing.

Dharmesh: Yeah.

Shaan: Has that changed you? You've probably become a worse person. You seem like a pretty good person. I feel like if you listen to us for 60 straight days, there's going to be a part of your brain that's good, but a part that gets corrupted slightly.

Dharmesh: I think that's true. That's an astute observation, [crosstalk 00:01:10]. We just have... I won't say like This is not stuff I'm like... You know, looking at retail businesses or... You guys have a wide array of stuff. But I think that kind of thing builds a different muscle group, and I think it's been useful for me. I'll put it to you that way. We're not separated at birth by any stretch, but we have things that the three of us luckily have in common. But there are things that I'm just different... I know it'll come out in the pod. I'm a weird dude.

Sam: We're we're on now. So -

Dharmesh: Okay, all right.

Sam: This is the pod.

Dharmesh: This is the pod.

Sam: I have a feeling this might go a little long and I'm okay with that. Shaan, do what you want.

Sam: But, I, in my world... So I was just hanging out with Hiten Shah yesterday, and your name came up. We were just talking to Nathan Barry the other day, your name came up. Shaan and I are in this text group where people talk about BigClout, your name comes up. Your name comes up everywhere. You got like a spider web. Like you get your hands in all these little things. And I think part of it's because you've been in the game for a while and you're incredibly successful. So this is Dharmesh. Dharmesh is the... You're the co-founder of HubSpot. Is your title CTO?

Dharmesh: Yes, CTO.

Sam: Are you active? Like, are you working really hard at HubSpot? How do you have time to have your hands in all this different stuff?

Dharmesh: So the answer is yes. HubSpot is my obsession and preoccupation. Anything else that you see me doing, there's probably some diabolical thread that connects it back to HubSpot. There is. So yeah, it's my baby. It's the thing that I spend pretty much all of my non-family time, non-personal time on. So it's fine.

Shaan: And I just want to describe for people who are not watching. So you should go to the YouTube channel. It's youtube.com/hustlecon and you'll see the videos. But, so here's what I see. So Dharmesh is sitting there, he's got a keyboard, like a piano keyboard to his right. He's got a, I think, a Steve Jobs piece of art behind him. Or is that Lennon or something like that? I can't tell exactly who it is, John Lennon maybe. And you're in this room. Is this where you work on a day-to-day basis?

Dharmesh: Well, yes and no. So this is my -

Sam: You're getting tricked, Shaan. You're getting tricked. Listen.

Dharmesh: This is my living room, but it's a, like a capture a moment in time when the living room was somewhat less disorganized than it usually would be. But it's a virtual background. I've got the green screen and things set up so I can...

Shaan: Oh okay. That's pretty good. Cause you usually when you have a green screen, it's like half your head also turns into the background and this one's actually pretty good. All right, I'm impressed.

Dharmesh: I've done a multiple green screen. So I'm sort of surrounded with it. So if I need to twist the camera one way or the other, it's still kind of -

Shaan: So you're kind of doing the oasis thing that we talked about. You have a virtual background, but the virtual background is not just you on a beach, like a fake situation. It's your actual living room when it's clean and perfect, the way you want it. And you're like, that's what I want my background to be, regardless of the reality of whatever your current situation is. I like that.

Dharmesh: [crosstalk 00:04:19] really cool is that the keyboard itself is actually real. That's not part of the background. So if I [inaudible 00:04:22] you'll see that the keypress makes sounds, it's kind of cool, yeah.

Sam: So let me do like a very brief intro and an overview of what we're going to talk about. So Dharmesh sent us a list of ideas, we're going to get into them, but I need to give a background here so the listeners entirely understand. So HubSpot today is like a 25 or 30, I don't know whatever the market cap is. So $25 billion publicly traded company. You co-founded it 15 years ago, I think.

Dharmesh: Yip.

Sam: Prior to that, you had another startup that you sold for a significant amount of money, we can talk about that. Throughout this whole time, you own, I believe, millions of millions of dollars worth of domains. You bought your wife, as a gift, humanism.com, which we got to talk about. That's pretty funny.

Sam: You're an angel investor in a lot of different startups, including Coinbase and things like that. You've got your hands in all these different things. According to wallmind or wallstreetmind.com you're worth today 850 million dollars. So you do a little bit of everything in the world of business. Is incredibly fascinating. So I wanted to talk about.. Well, you might be the wealthiest person we've ever had on this podcast. I'm going to ask you questions about that.

Sam: I don't know

Dharmesh: [crosstalk 00:05:44], but it's okay. It's fine.

Sam: We're going to ask you questions about it.

Dharmesh: [crosstalk 00:05:47] it doesn't really matter. And that's the one thing I've learned. We can talk about that too.

Sam: Well, that's that's okay if it doesn't matter, we're going to talk about it. We're also going to talk about your ideas. We're going to about building HubSpot. We're going to talk about why you invest in what you invest. And we're going to talk about, do you ever invest in non startup stuff? We're going to talk about a lot of stuff. Shaan, what do you think?

Shaan: Yeah, let's do it. Let's jump in.

Sam: Where do you want to start? You want to start with... What?

Shaan: Okay, so here's my question. My question's actually not about Dharmesh. It's actually about Sam. So, I've always wondered this. So you acquired The Hustle. And I hope you could be as transparent as you want here. I think Sam will not care. So I would say DNA-wise, The Hustle is kind of a unique company. Sam's a pretty unique dude that brought into your company. Different DNA probably than the vast majority of employees there. Give me kind of like...

Sam: Well you too.

Shaan: I don't know.

Sam: You're part of the deal too, Shaan. So you're in the boat.

Shaan: Sure, but he doesn't have to deal with me on a day-to-day basis. So doing that deal and bringing these guys in, are there any interesting observations or any entertaining little stories about either pre-acquisition or post that had to do with Sam and The Hustle? I'm just curious. What's your view on that side of the table? Because I've only been on the same side that Sam's on.

Dharmesh: Yeah. HubSpot has not done a lot of acquisitions in the past. We've done a handful of them. Pretty much most of them have gone well. The one thing that made this different, I think as you observed, is the DNA of The Hustle is different than HubSpot, and that's both a good thing and a bad thing.

Dharmesh: So the thing that I was worried about is... Until now I don't think Sam and I have actually ever had a one-on-one chat.

Shaan: That's okay. This is my therapy session therapy for you guys.

Dharmesh: [crosstalk 00:07:32] therapy for two people, Shaan.

Sam: Dharmesh and I talk a lot on Slack.

Dharmesh: [crosstalk 00:07:37].

Sam: We're like buddies on slack.

Dharmesh: We've actually talked. But the thing I was worried about is that... So, Sam is a kind of what I would think of as a kind of type A personality, just like he's out there, he's hustling [inaudible 00:07:47] the name of the company. Which is fine, but it's just not... Most of the makeup of HubSpot is not that. We're a very... I don't know what the right... It's going to overly stereotype us, but we're not type A. We're like a kinder, gentler, humble, quieter kind of company.

Shaan: Yip.

Dharmesh: So that's the one thing -

Sam: So let me explain it this way -

Shaan: So Sam would be described as brash. I don't think anybody would ever describe HubSpot as brash.

Dharmesh: No.

Sam: Well today, Kieran, the guy I work with, technically my boss. He was like, "You should probably hire someone outside of HubSpot for this role, for your growth."

Sam: And I was like, "Well, why?"

Sam: He goes, "I think you're too direct for anyone who works at HubSpot." It's like that. That's an example.

Dharmesh: I think that was good advice. But, it's worked out well. So there've been... The one minor story I can recall. There was a Twitter back and forth that I think Sam had with Rand Fishkin. I don't know if you recall this Sam, that there was something that was said about VCs or investment or something. And Rand's been a good friend. It was like, Oh, okay well... It's fine. And I'm like, okay. This is like [crosstalk 00:08:52]. not like either party was right, wrong or indifferent, but I know them at least now a little bit, both. But it's been fine.

Shaan: Okay.

Sam: Well, in my defense, and even our podcast's defence, our goal is... We will disagree with people, but I hope that it never comes from a place of disrespect or -

Dharmesh: No it didn't. No.

Sam: Or trying to hurt your feelings.

Shaan: But I will say, I do put entertainment first sometimes. So sometimes I will poke the bear for the entertainment value of it when the kinder, nicer, simpler thing to do would be to do nothing or just back away. So I do like to have fun, either on Twitter or the podcast.

Dharmesh: [crosstalk 00:09:30] HubSpot too much. But the one thing I will say, as far as the deal itself, it was one of the better things HubSpot has done. The strategy behind it, I think, is strong in terms of it gets HubSpot into a thing which is where I think the future of SaaS companies is going to be heading. Which is more and more [inaudible 00:09:50] were going to control their own distribution versus renting audiences from other people, and resources.

Dharmesh: And there's other deals that have been done around the same timeline, but I'm a believer in companies controlling their destiny in terms of distribution versus constantly just buying audiences and renting them from someone else.

Shaan: See, this is where you should just say, just drop a one line. Be like, "And we got it at a fantastic price." Just to drive Sam crazy for the next seven years. Just leave him constantly questioning himself.

Sam: Look. Yeah. Could we have sold for more? Definitely maybe. Like that always is a maybe, right? I think that when we sold, HubSpot I felt was undervalued. What was the stock in January? It was worth like $350? Or was it even less? $250?

Dharmesh: Yeah.

Sam: I don't remember.

Dharmesh: Yeah.

Sam: Today it's 600 bucks. My guests was that I think HubSpot is undervalued. And also, I wanted to create a reputation of someone who was a fair deal maker. I think people will know that if I built something, I sold it, that all parties got a good deal.

Dharmesh: Right.

Sam: And so -

Shaan: Okay. All right. Sounds good. We can switch off The Hustle acquisition. So let's do some ideas.

Sam: Wait. No, wait. I want to talk about one thing really quick. Let's talk about money stuff?

Shaan: Okay.

Sam: Because I told Dharmesh I was going to ask him this. So first of all, is it weird that I know what your net worth is today because it's public information?

Dharmesh: It's not weird for me, honestly. I'm generally transparent. I believe in the openness of the web. In a sense, it's a publicly traded company. Would I want my bank accounts and all my accounts published on the web? No, but the fact that I'm an executive in a publicly traded company and most of my net worth is in the form of shares.

Dharmesh: Which you can take the number of shares, which is on the public record and multiply it by the current price and get... Which is probably roughly 85, 90% of my overall net worth, because that's where all my money is, is in HubSpot shares. I don't find that weird.

Sam: Yeah.

Sam: Has your life changed as this has accumulated and things got different? You had another company before this, how much did you sell that for?

Dharmesh: 10 or 15, in that range based on how you count it.

Sam: And has your life changed since that moment significantly? Because that's a significant number in itself, right?

Dharmesh: Yeah. So here's the thing, and I'd like to say I wasn't focused on money or I'm not focused. At the time when I was younger, I was very, very focused on money, and I had a very modest upbringing. It wasn't the money and the accumulation of it, it was the freedom. You know, ever since I was little, I always want to configure the universe to my liking, so to speak. Cause I [inaudible 00:12:36]. So we do things the way I like to do things. And having to work in a normal kind of classic job, doesn't give you a whole lot of control over your part of the universe. You don't get to control who you work with all that much, or who you hire. you don't have a lot of degrees of freedom.

Dharmesh: Back then I had kind of thought about money, and the first, I'll say, 5 million or so has a dramatic impact. How did dramatic impact on my life, right? Because that buys you an inordinate amount of freedom, right? You don't have to work again. You can invest in things. As long as you're not out buying small islands and overtaking countries, that's a decent amount of money for folks. Right? And then after that, there are other kind of... I don't know exactly what the demarcations are. Where ,more money ads on the marginal basis, a little bit more freedom. You can do more things. But the kinds of things I do, like I enjoy food and restaurants, there's only so much you can actually spend as a reasonable human being. Even if you like the finer things. Unless you're trying to make a statement and spend a hundred times what the average of a whatever X is, it's kind of hard to spend money [crosstalk 00:13:49] doing well, even if you have high-end taste, honestly.

Shaan: The most common thing I've heard, I don't know if you would agree or disagree, is there's these levels. So first, when you're in debt to no debt. That's like the first jump. Oh, freedom. Got this big weight off my shoulders.

Dharmesh: Yip.

Shaan: But then there's, we'll call this the zero to 1 million. Where it's like, oh my God. Mentally, I'm a millionaire. That's kind of a mentally freeing concept and interesting concept. It's why we named the pod what we did. But also, that'll afford you a certain type of lifestyle.

Shaan: And then the next jump, I've heard, is like at 10 or 10-ish. Where it's sort of like, okay, at 10-ish you don't have to work. At a million, you've still got to work. At 10 you don't have to work. You can have a couple of places to live. You could do whatever you want. You don't really need to check the prices when you go do things.

Dharmesh: Yip.

Shaan: And then there's a hundred or more. Which is sort of like... The ego gets involved. It's like, okay, now I'm keeping score in the, in the business Olympics against these other folks. And also, I can buy an island. I can buy a piece of an NBA team. I can go do these different things that are kind of like bucket list. And the joy, what I've heard is for most people the joy actually deescalates from the beginning there.

Shaan: Getting out of debt is the most relief, most joy. And then it starts to diminish step-by-step as you go. Like the 10 to a hundred feels a lot less impactful, and less changes your joy and your mood than going from zero to 10.

Dharmesh: Yip. Just two threads I want to pull on as long as we're talking about money. So one is, one thing that's kind of helped me reconcile it in terms of having a b in the net worth now is the plan... My wife and I talked about this. The plan is to donate 90 plus percent of it. Right? We have one child we're not going to spoil them. So it's not like we're trying to build a multi-generational dynasty. That is not the goal.

Shaan: Right.

Dharmesh: And so then, I make a really good return on a startup or something like that, it's like, okay, well I'm -

Shaan: Discount 90%.

Dharmesh: I'm working for my wife's foundation. That's essentially what it comes down to, right?

Shaan: Right.

Dharmesh: [inaudible 00:15:54] percent of whatever it is. I think it'll end up being higher because I just don't think we're capable of actually spending the money.

Dharmesh: But yeah, so that makes me feel better. But just kind of taking it back to the early days. One lesson I learned early, early on, and this is useful, the beginning part of my career, is the relationship between time and money. And one thing is that we spend the better part of the first half of our lives converting time into money. Right? And you're looking for the average. You're looking for... Yeah, you want to get that rate up as you can. And then the latter half, you're desperately trying to buy time back with the money, however best you can. Right? And it varies a little bit as to when that kind of turn happens. But the thing that I learned, and I thought about it probably a few years after that.

Dharmesh: So I was making $3 and 65 cents in my first job when I came over as an immigrant, and I worked all the way through school, took me seven years to get my four year degree. I was working full time the whole way through. And that wasn't a lot of money. And as it turns out, nothing was delegatable. But then once I got to the point where I was making 10, 20, $50 an hour, it's like, okay, well now... And all of my time. I can make as much billable as I want to, as much as humanly possible, willing to work, there was someone willing to pay me for that time. I was an engineer. That's how things worked back then.

Dharmesh: And the pivotal point for me is, was in my early twenties, I got this bump to $125 an hour. I was working as an engineer. And that was an ungodly amount of money. I was in Birmingham, Alabama, this is the nineties. That was real money. Right? And I was working a lot, so I was making a fair amount. So then I made the decision that if there's anything I've been doing with my time that could be done by spending less than $125 an hour, I'm being an idiot by actually doing it. Right? If I enjoy it, that's a different story. But if I'm not, it's just stupid. And so I've carried that idea. It's like, okay, so what value would I place on my time?

Shaan: Right.

Dharmesh: What is occupying my time that I can delegate, even if I'm paying a premium. It's like, okay, I could pay $75 an hour for someone to mow my lawn.

Dharmesh: Yeah, I hate it. But it's still profitable, right?

Shaan: Right.

Dharmesh: Like, why would you do that? I would do that every day of the week. So the one thing that's changed for me, so now... I went back into the math because I knew I was going to be on this podcast. You folks like numbers. Let's say I worked on average 60 hours a week, and I've done that for about 30 years, give or take. This is my professional career. My average hourly rate across the 30 years would be like $10,000 an hour. Right?

Sam: Yeah.

Dharmesh: And now it's back loaded.

Shaan: Right.

Dharmesh: [inaudible 00:18:29] effectively my hourly rate. And I would actually pay a premium right now, right? Above that. So I would not spend my time, even an hour, on anything that wasn't worth at least that. The future me would buy it for 50, $100,000 if there's some option value on that time. Anyway, the short message is, most people don't value their time enough, and don't think about it objectively enough.

Shaan: Right.

Dharmesh: And it, like anything else, is a resource, but it's finite. But put a number on it and then ask yourself, "What are the things I'm doing with my time that are not worth that?"

Shaan: Right.

Shaan: Naval has this phrase in his How To Get Rich podcast. How To Get Rich Without Getting Lucky. He goes... Put a, I don't know what he calls it, like an outrageous hourly rate for yourself.

Sam: A super ambitious rate.

Shaan: A super ambitious one, one that's way beyond wherever you're at. He's like, you know, ever since I was young, this was like one of the smart things I did. I just said $5,000 an hour. Some really aspirationa hourly rates. He's like, my friends used to laugh and joke. Like, "Dude, you bought this blender. You're not even using it. Go return it."

Shaan: And he's like, "No, I'm not going to go return it. I don't enjoy it, and it's going to get me back $30 for the hour round-trip, going and running this thing at target. So I will throw it away. I will give it away. What I will not do is I will not give my time back into that because the hourly rate just doesn't make sense.

Dharmesh: I love that. I love that.

Shaan: And I've done a similar thing, and it's kind of funny to like pick that hourly mark, because it sounds crazy. My mom will get mad at me. She'll come to my house and then she'll see the way I'm living. And she's like, "Oh my God. This bill is late. There's a $75 fee if you don't do it."

Shaan: And I'm like, "I'm not calling them. And they can charge me the $75 fee. They could charge it to me 10 times. I'm not going to use this hour." And I'll tell her, look, literally my hourly rate is X, right? It's X thousands of dollars. That's my hourly rate. So I'm not going to trade that hour to go do this thing I don't enjoy, because her other argument is, well, you go watch TV. And I'm like, well that I enjoy. So that I'm actually spending the money.

Shaan: But Sam, I know you're a little bit different. Like when I went to go visit Sam in Austin, he had like CVS receipts that he had been saving in his glove compartment of his super fancy car. Lhe's like a dichotomy. Right? He likes to spend some things, but he's also enjoys being frugal. It's like a fun hobby.

Sam: Yeah, that makes me feel good about myself.

Shaan: Right.

Shaan: I guess the question I have for you is, do you also have an hourly rate? Do you think about that? Or you don't do that that framework? Sam this is for you.

Sam: Oh, for me? Yeah, I have that framework. Yeah.

PART 1 OF 4 ENDS [00:21:04]

Sam: ... for me, yeah, I have that framework. Yeah. So yeah, I mean, it makes me feel good not to waste stuff. I feel good about myself when I feel guilty if I waste it. So I feel happy when I do that. And I feel it's hard for me to go to bed at night if I waste something or I don't return it. Yeah, I have that hour. I mean, I have that rate. I assume that I'm going to make $3 million a year, so whatever that hourly rate is. But I think I'm going to make $3 million a year, and anything that like will make less than that, I don't want to do it. But that said, mowing the lawn, I get joy from that. So I have no problem... I don't put a money thing on anything.

Shaan: Of course.

Sam: But if someone's like, "Hey, will you..." In fact, Shaan, someone asked us to fly to London to come speak at some event or something, and I'll forward it to you, but they're like, "Yeah, it's October." And I'm like, I don't want to go there. And I'm like, how much money would they have to pay me to go and do this? I'm like, they have to pay me a lot.

Shaan: Right. Because you'll [inaudible 00:21:55].

Sam: Yeah. They'd have to pay me a hundred thousand dollars to do that. And that does not make any sense, but I just hate it.

Shaan: And so Dharmesh, a couple more rich guy questions. And we like these because honestly, you never get to ask these, even if we were just hanging out personally I could never ask you these, but for some reason with the podcast, it's sort of okay for me to just like ask you random ass questions like this.

Sam: And I told him when he wanted to come on, or I asked him to come on, I go, "I'm going to ask you this stuff." And we gave him an easy out. I said, "If you don't want to answer anything, just say you don't want to answer it."

Shaan: Right. And I'm sort of projecting here where I guess I think I put myself in your shoes. What if I had more money than I could ever spend? What would I do? And so my question to you is what, whether you did it or you just considered it, what's a sort of outlandish use of funds that you've either considered or done? So for example, some people are like... Some people like jets, that's not... I'm not buying a private jet. But what I really care about is I love the socks so I bought every... I love Jordan's sneakers so I bought every pair of Jordans and I have this closet at my house just full of these things because I always wanted it when I was a kid, right? Or they overspend in some area and they're just happy to have done it.

Shaan: Or it could be philanthropic. I think if I had a billion dollars, I think like two days a year, I would just wire somebody like a million dollars. I would literally just wire a random person a million dollars and I would just see how that plays out. And I think it would bring me tons of joy and entertainment to do that and see how they react to what happens and what do they do with it? Like maybe some kid who's working on something interesting, I would just be like, look, here, check your account, it's there. So give me something that's... is there anything that's sort of non-standard that you either have done or considered doing?

Dharmesh: Yeah. The thing that I do is I'd like those kind of micro acts of kind of spontaneity that says, oh, someone once you go to this event or something like that and can't afford it or whatever, I'll be a sponsor. If you can find people that want to do this, go do this. I'll do that relatively regularly. So I've taken my average tip amount up to between 50 and a hundred percent everywhere I go. And this is partly because I want to make up for all the time when I was younger that I certainly did not tip well. So I'm trying to average it out, and that's... As long as I can do it without drawing too much attention, because I don't want to be that weirdo guy. It's like, okay, sends sometimes the wrong signal. So I want to do it-

Sam: I do that, by the way.

Dharmesh: ... with modesty. It's great.

Sam: I typically tip 50%. It makes me feel good.

Dharmesh: Yeah. It's nice. Yeah. And I've worked in the service industry before, I know that those kinds of things matter. So-

Shaan: I'm a cheap bastard so I'll stay silent here.

Dharmesh: In terms of large things, so philanthropy, the running joke inside the house is my wife and I... And so she's not from the tech world at all, but... So I want to own the world and she wants to save it, right? So I will make the money and that's something I've been relatively good at, and she will be able to channel it to good causes and the philanthropic efforts. So she'll be able to do that. So I don't have any particular specific things.

Dharmesh: I will say I am a... I'm the guy that's like jacked with a matrix. So if there was a world that's like, oh, it's like this is... I live a virtual world. So there's not a lot of physical things that I crave or desire other than a piano, which I've wanted for a while, and I have now a piano. But it doesn't excite me all that much, right? Because atoms, there's a maintenance to atoms, right? Atoms versus bits. If you have, whether it's a yacht or whatever it is, a plane, that takes calories. I don't care how much you delegate or whatever, that's something in your life that's kind of attached to you somehow. And I just don't like that. I don't like that idea. That feels more weighty to me than kind of joyful. But so...

Sam: So speaking of time, so HubSpot, 15 years old. I don't know how many people are here, 2,500, 3000, whatever. It seems like you guys grew pretty fast early on, but has it always felt like a grind or... I mean when I see you, I'm like, well, you don't have to do this. You could delegate this. You don't have to work here. You're set. You're good. Why are you still doing this? And does it still feel like a grind? And when has it stopped feeling like a grind? One of the reasons why I wanted to sell to you, I was like, if I don't sell in this cycle, I'll probably have to wait another five years. Do I want to put that work in or do I want to sell now? That's a hard challenge. Did you face that? And just walk me through that.

Dharmesh: Yeah. So a couple of things. It's not widely known, but so Brian and I as co-founders, we had a kind of heart to heart co-founder chat, which I encourage all founders to have. And we have this list of questions we're going to go through. And I published this on my own startups blog. But one of the things was around who's going to be CEO. And we decided he's going to be CEO because I suck at being CEO. I did that with my first startup for 10 years, I'm just not that good at it. So that was kind of decision one. But decision two, which is much more unconventional, is that I have no direct reports. So my agreement with Brian was I'm not going to have any management responsibilities in this company. I'm going to be in it a hundred percent, but I'm not a good manager.

Dharmesh: Now I'm a reasonably smart guy. If I spent a bunch of time, I could probably with some coaching get passably okay at management. I think I could get there. I don't want to spend 10, 20, 30 years of my life getting passably good at something. I'm a big believer in take your strengths, whatever they are, and put all your energy into kind of amplifying those strengths and getting really, really good at that thing, and don't worry about your weaknesses all that much. So I don't want to worry about my weakness in managing people. And so we have over 4,000 people at HubSpot, I have zero direct reports. I've never had direct reports in the 15 years. And that is partly what makes it much... I don't think of it as a grind at all. It's completely discretionary, optional for me. Obviously I have a lot of kind of vested interest in the company, but in terms of the work that I do...

Dharmesh: And I've sort of whittled down my life at a HubSpot, this has been this way for better part of a decade, is I get it down to like three things I'm going to work on. And that I will change those every few years. So for a long time, it was brand, culture, and what I call boldness, which is is the organization taking on enough risk? Because the temptation is always once you start having customers and revenues are growing, things like that, is just to kind of, what we call drag the spreadsheets. Like, oh, here's the numbers, this is how it's growing, we're just going to drag the spreadsheets and the numbers will flow basically, is to push the organization so we don't do that. So what I do is I will maniacally focus on whatever those three things are and say no to pretty much everything else.

Dharmesh: And things will slip in and out. So I've had product in there, I've had platform in there, but on that thing, whatever it is I'm working on... So when I had culture on my list, I spent 300 hours in the culture code deck at HubSpot. I'm going to do everything I can to learn everything they can to try and get culture to be a thing at HubSpot. Yeah, so I find it enjoyable. I get to kind of pick the things. So my three things are different from year to year. I like to dig into the details. I don't like kind of floating at 50,000 feet in lofty ivory towers. I like to... if I'm going to work on brand, I'm in there with the marketing team reviewing copy and going through the... And this is why I'm taking Shaan's copywriting part. I obsess over details. So anyway, yep.

Sam: Did you see Shaan that he's in your power writing course?

Shaan: Yeah, I saw that. I was like, how does this guy have time to do this? This is amazing. I don't know. Have you attended? How's it been so far?

Sam: He talks to me all the time. That's why I'm like, what do you do all day?

Dharmesh: I've found it very useful, I'll say that. I think copywriting overall is one of the most underrated skills in entrepreneurship generally. People do not realize the amount of leverage you get by just spending 10, 20, 50 hours... And you can learn a lot of what you need just by reading the top three books on it and just practicing the craft, right? It's a doable thing. And the nice thing about it and one of the things I love about it, it' measurable. You can objectively measure whether you got better at copywriting or not. You can look at your conversion rates or whatever numbers you're trying to move as a result of your words, and it's a learnable skill.

Sam: One more question and we can move on, and the reason why you were able to do those no direct reports is I think that you were the first investor in... So was HubSpot your idea or was it Brian's idea? But I think you invested like half a million dollars of your own money to get it started. And aren't you the largest shareholder of the company?

Dharmesh: I am. And so the idea of HubSpot... you have to decouple the two things. So HubSpot was not supposed to happen, and here's what I mean by that. When I sold my last company and I had been running it for 10 hours, 10 years, and working the proverbial entrepreneurial hours as one would expect, right? It was self-funded, bootstrapped. And I promised my wife that I would not do another startup. I was like, okay, well the one I'm doing I'm in, I can't not be in. The analogy I used is it's a little bit like being at a gaming table in Las Vegas, right? And it's like, you don't know the rules of the game. This is how startup entrepreneurship works up here if you're self-funded. It's like you're at the table and the only real feedback you get is sometimes the chips go down, sometimes they go up. You're playing, you're trying to figure out the rules as you go, you don't know.

Dharmesh: But there's one cardinal rule is that if you leave the table, whatever chips you have on the table, they're gone. Every now and then the house will come up to you and say, "Hey, would you like to cash in your chips? They're worth X dollars." And this is the position you were in. So I was like, "Okay, would you like to sell your company? Here's what someone's willing to pay for it." And if you miss that opportunity, you have no idea when the next opportunity to cash out your chips. And so you keep playing, right?

Dharmesh: And so the thing I told my wife was I have to keep playing. If I chose to get off the table, it's like I've got a lot invested into this, a hundred percent of our net worth is invested in this. And so then eventually when I sold, that was the decision like, okay, I'm leaving the table, cashing in my chips. I don't have to do this anymore. So that's why I went to grad school. And my plan was go to grad school, so I didn't really get a chance to enjoy undergrad because I was working the whole time through it. I'm going to actually go to grad school, be a real student, apply myself and not do anything.

Sam: How old were you?

Dharmesh: I was 35, 36, somewhere in that range. Yep.

Sam: Like a 36 year old college kid, living the dream.

Dharmesh: Yeah, I did. I had a great time. It was awesome. One of the best things I did is go back to grad school, for a variety of reasons. But anyway, so I had not planned on that. So my plan was to go to grad school, then maybe get like a PhD and then go teach. That was my kind of path, my kind of chosen path. And then I met Brian in grad school and we both have this kind of shared passion for SMB. We both come from tech, different backgrounds. And so the first decision we made before we even decided what HubSpot was going to be was that the two of us should do a company together. And if Brian was not going to do a company, there would be no HubSpot, right?

Dharmesh: So I had registered a domain name, I had kind of noodled on kind of variety of things, but then we kind of came together and said, "Let's do this." And by the way, all through grad school we were noodling on ideas, right? We're like, "Okay, well we'll do this." And we had HubSpot and we went to the business plan competition, wrote a business plan for early versions of HubSpot, which is fun to look at. But the idea came after. We had kind of narrowed it down to two companies. The pass one was in marketing, which is what we ended up doing. The other one was like a Oracle for small business, like an ERP, similar to NetSuite, which you folks were talking about in the last episode.

Shaan: And so-

Sam: Pause.

Shaan: Okay, go ahead.

Sam: You got to turn your gain, Dharmesh, down just a hair.

Dharmesh: I don't know that I have gain. I'll move it back a little bit. Is this better?

Shaan: Yeah. I think-

Sam: Shaan, do you hear what I hear or no?

Shaan: I don't hear any static or anything. Do you?

Sam: Oh, nevermind. All right. Time in.

Shaan: Okay. All right. So let's do some ideas, because I think one of the cool things, what I love about any technically minded person who has business success is typically when people who are non-technical get into business, they go in one of two paths. They sort of become a financier. They're like, great, still love business, but I don't want to sweat anymore so I'll invest. And lots of people invest, but they make investing the main thing. And what I found is that a lot of people who are technical that ended up being successful, they never stop loving kind of what's new, where technology is going, how behaviors are changing, that sort of thing. And whether they start a new company or not, they sort of live as a user at the edge. And so tell me I guess what's... give me one or two kind of technologies or ideas right now, spaces that are most exciting to you at the moment.

Dharmesh: Two. One is around kind of broadly defined cryptocurrency. And we haven't talked about Bitcloud yet, but I'll bring that out, is a... Cryptocurrencies as applied to other kind of mainstream things. So if I were not doing HubSpot, and which I have no plans of doing anything else, but this is the idea I'll... I'm going to give you my pitch, Shaan. What you should do, since now you're out of Twitch, you should do a professional network that's powered by the blockchain that, and I'm going to say this as kindly... that people love. Because people don't love the incumbent right now.

Sam: Can I say my opinion, Dharmesh? You know my opinion, are you cool if I say it?

Dharmesh: Yeah, go ahead.

Sam: LinkedIn sucks. How about this? A lot of people say LinkedIn sucks, and you're suggesting building a different one on the blockchain.

Dharmesh: [crosstalk 00:35:25] I even have the seven-figure domain name picked out for you. I will write the $5 million check for you to go do it as far as the seed around, or up to 5 million. If you want to let other people in, that's the main thing.

Shaan: This just got spicy, okay.

Sam: Oh my god. What's the domain name you have?

Dharmesh: I am dead serious. And here's why it needs to exist.

Sam: Wait, let's play this out. Yeah, keep going.

Dharmesh: So the issue right now is that LinkedIn, yes, people don't like it. It was a product that was great for its time, and times have changed now. There's a different kind of need. And the thing I'm excited about is the intersection of a couple of things. One is we didn't have things like Bitcloud or cryptocurrency before, now we do, right? One of the issues with LinkedIn is like, okay, well, you've got the kind of spam issue. It's like, okay, well how do I separate all the noise from the signal? It's just a pain in the ass.

Dharmesh: Over time, the asymptotic move for LinkedIn is diminishing utility, right? It's just going to become people and there's a cap on where you can go with it. So Bitcloud ended up doing Twitter with the blockchain. Imagine if there was something else that did LinkedIn on the blockchain and you'd have your own kind of currency? And then you could say, "Hey, you know what? I'm an engineer that's a free agent" or whatever. "And for $500, I will look at your company and apply for it and I'll do a reasonably good job. Or for $10, I'll open your email. Or for X, I'll do this." It's like [crosstalk 00:36:51].

Shaan: So the cool thing about Bitcloud is everybody's got a price, right? Everybody's coin has certain value. And so the beauty of a professional one would be right now when you go on LinkedIn, it is not obvious the level of hierarchy, right? And so you always have people who are either recruiters or people who are at the bottom of the career ladder trying to keep connecting and reaching out to the people at the top of the career ladder. And they have no real incentive to do it, and so they just sort of ignore LinkedIn altogether. Why would I even go to this site? I'm just going to get inundated with crap that I don't really want. And so the beauty of this is that because everybody has a coin value, you sort of inherently have baked in the sort of career worth, career value that this person is bringing to the table into the network.

Shaan: And so you know, A, if somebody has a way to buy attention, so they buy your coin, which increases your price. So it's a mutual beneficial in this right now. If I go pay LinkedIn, I can send you spam in mail. You do not receive any of the revenue from me paying LinkedIn for the right to spam you. In this case, I could say, "Hey, if you want to spam me, if you want me to read your thing and you want me to respond to it, here's my prices." So it becomes revenue generating for me. And the second thing is that when somebody reaches out, I can quickly assess their value in the network based on how much other people believe in this person, how much other people weight at this person. And so now it's not this kind of every node kind of looks the same on the surface. No, they would not look the same on the surface, which is really cool.

Dharmesh: Correct. And just one more thing, yeah. So, yes, so there's a kind of crypto angle where everyone's got a price. The other angle is... we'll call it page rank for the professional graph. Right? So right now the professional graph-

Sam: Oh, that's cool.

Dharmesh: It's pretty clear, it's all symmetric, right? So every person you follow gets an equal number of follow value, whatever. Their count goes up by exactly one. It's not weighted any single... any way. How a page rank-

Sam: Explain page rank a little bit.

Dharmesh: So the kind of the beauty behind Google, the original idea that made it the powerhouse it is today is they said, okay, well how do we determine what the best set of results are to show for a keyword search, right? And it came down to two things. One is the overall context of the page. So if you're searching for a real estate Boston or something like that, it'll look at all the pages that's indexed. It's like, okay, well, these set of pages are about real estate in Boston to varying degrees. That's kind of factor one in the function. So the second-

Sam: Which people also just say good content.

Dharmesh: Yeah, exactly. We'll just call it quality. Like the context-

Sam: Quality content. Yeah. It's a whole thing.

Dharmesh: [crosstalk 00:39:17] authority, right? And the authority is where page rank comes in. So they say, okay, here's this individual webpage that's sitting on the internet. We're going to measure its authority by how many links are coming into that page, because that's an endorsement of [inaudible 00:39:31]. And the value of those links passed to that individual page, the page rank value of it, the authority that gets passed through is based on the page rank of those pages, right? So it's a recursive function to say, oh, well, if the New York Times links to you, that's much more valuable than if Dharmesh's blog links to you because New York Times has more page rank.

Dharmesh: Last piece of the page rank thing, which is super important to know, is that the amount of page rank you pass across the links from your page are proportional to your page rank. So let's say I have two units of page rank. I'm making the number up. And if I link to just one person, it's your blog, Sam, all the page rank I have on that page accrues to you by transference. If I linked to 10 different people, it gets distributed across those 10 links. So it's a weighted graph versus just a symmetrical graph where we're not... So now if you imagine a professional network graph where everything was graphed like, okay, well I endorse Sam and I have a certain authority, I have a certain currency if we've got a cryptocurrency underneath it, and as a result of which, Sam's currency goes up by X amount. So it's not just me buying shares, it's just by that. So I think the notion of a follow should go away. If you really, really like that person, buy a dollar, buy $5 or something like that, right? Like that's the one kind of-

Shaan: Just to make sure I understand, so what you were saying is instead of just following Sam which you have an infinite supply and sort of a pretty light signal, you're saying in this case, you would be able to own some of Sam's coin, that'd be a pretty strong endorsement. And secondly, the fact that your coin is worth a lot would mean that because you, a valuable person, owns Sam's coin, Sam's going to goes up not just by the $5 you pay, but by some multiple of that in terms of the overall algorithm, the way the algorithm weights Sam's value now.

Dharmesh: Correct. So for instance, if you raise money, if you're a startup and you raise money from a Andreessen or Sequoia, a million dollars is not a million dollars. Where it comes from actually has an impact. The same thing, follows should matter. The fact that you follow me should matter more than someone that just joined Twitter or Bitcloud or whatever yesterday, right? Like that's the-

Shaan: This is a tremendous idea. I'm having trouble containing myself at the moment. This is one of the more exciting ideas. Because it-

Dharmesh: [crosstalk 00:41:33] exactly what I came here for is to put you on the spot to... Like, okay, listen to this idea, Shaan.

Shaan: That's insane. Because I got excited about Bitcloud, and I got excited about it because I think that we do want a social network that's inverted. So instead one platform controlled by one company that owns all the data, it's inverted, it's inside out. It's basically no company, all the data is free, and you own your own business on top of it. And so I think that... I don't want to say... how do I say decentralized without saying decentralized? That's my way of saying it, okay?

PART 2 OF 4 ENDS [00:42:04]

Shaan: I don't want to say... How do I say decentralized without saying decentralized? That's my way of saying it, okay? So I think that's exciting. And then a whole bunch of people were like, "I can't believe you're endorsing this scam project" and blah, blah, blah, blah. And is this going to make me rich? Or is this not going to make me rich? I was sort of like, well, it's besides the point. It might, but it's besides the point. It's more like this is what the next Twitter, LinkedIn Facebooks are going to look like in either one or 10 years, I'm not sure. And Bitcloud or the next thing, I'm not sure, but I'm going to play with this one and I'm going to give it a ride so that when the right one who does arrive, whether it's this one or the next one, I know what I'm looking at. I know what's real and what's not. And that's why I recommended people go play with it, just to see, just to be on the forefront of it. You-

Dharmesh: Something like it needs to exist, right? Whether it'll be the one or not, I don't know. And so I've been spending a fair amount of calories trying to kind of understand the mechanics of Bitcloud itself and [crosstalk 00:42:55] on the top traders list, so I've been kind of moving up the curve, so to speak.

Sam: Dan is messaging me about some mic stuff. Dan, make your decision.

Sam: Yeah, I'm trying to ask Henry. Dharmesh, I think you're getting excited, which is great, but it's starting to come in a little bit loud.

Dharmesh: All right, let me see. I can fix that. Hold on.

Shaan: In your system preferences, I think you can turn down the mic-

Sam: Yeah. It's hurting my ears, to be honest.

Dharmesh: Sorry, sorry, sorry. Ah, okay. Testing, testing, 1, 2, 3. Is this better?

Sam: A little lower.

Dharmesh: Little lower. Better?

Sam: Yeah.

Shaan: Yeah. Because I think they can always turn you up, they just can't turn it down if it's hitting the register. [crosstalk 00:43:37].

Sam: What?

Dharmesh: I should have listened to you the first time. I get animated and excited.

Sam: Which is great. I didn't get that out of you when we did the tech check.

Sam: So how much have you put into Bitcloud?

Dharmesh: It's got to be a million dollars.

Shaan: Over a million dollars, yeah.

Sam: The thing that me off about Bitcloud was I got into this... I didn't get into it because I had to... I knew I was going to get into this thing I'm about to say. But I was getting to, I wanted to get into a pissing match real fast about building clout because there was money on the line. And yeah, I just, I was like, ugh, I don't want actually want to get in this race. I don't want to play that game. And so that, I kind of had a little... One part of me is I actually fundamentally agree with most everything you're saying. On the other part I'm like, oh, if this exists, I'm going to be getting in a lot of pissing matches or whatever. I'm going to be playing more games. And that kind of freaks me out a little bit.

Dharmesh: And this is one of the issues with Bitcloud right now, right? You have a bunch of founder rewards games and things like that. And this is what happens, this is why we can't have nice things, part of it, right? It's like anytime something new comes along, there will be people that are trying to game the system, whatever. So even back in the early days of Google, the internet wasn't a scam and Google wasn't a scam, but there were a bunch of people trying to scam Google to kind of show up and the results and doing kind of spammy, SEO kind of stuff.

Dharmesh: You see the same thing on Bitcloud, right? And you have to sort of kind of separate that from platform. It's like, okay, fundamentally the idea does not feel like a scam to me. Yes, they needed to open it up and have it listed on an exchange so you could actually take money out, minor details, but they're fixing those. I talked to the founder in what, a few calls I've had in the last 12 months because I only do phone calls, but it feels legit to me. And that's not to say it's going to succeed, but I'm relatively confident it's not a scam. That its reason for being is not a scam.

Shaan: So one of the things that happens with a Google or a Facebook is, like you said, there's a big honeypot either of users or money on the line. And so then you get good people excited about it, you get technology excited about it, but you also get the sort of scammers and... not even scammers, but I'll call them schemers. People who are not doing anything illegal, but they're thinking, oh, this is a game, how do I play it so that I get the highest score? And the score is either money or followers or whatever they're trying to game. And whether this is like Buzzfeed and Upworthy saying, oh, newsfeed, how do I game newsfeed to get all this monthly traffic? Or Zynga doing this with games on Facebook or whatever.

Shaan: With a company, you sort of have the... For as much as people hate that Facebook and Google can sort of sensor and pull the rug out from under you, they are able to swat down these schemers and scammers so that they don't ruin the experience for everybody. And one thing that's interesting with decentralized platforms is that there's nobody, there's no CEO. There's nobody in charge to do that. And so I think it's going to be very interesting how that plays out. Do you have a sense of if that's going to be a problem or do you think that there's a solution to that with the governance?

Dharmesh: I'm a believer in kind of self-governance over time. It all depends on the time horizon. Will fix itself in a year or two years? Maybe not. I think there's still going to be this kind of dark parts of a Bitcloud that people don't want to tread into. But over time, I think once Bitcloud kind of figures out what it wants to be when it grows up in terms of what's the actual... Right now, the way I think of it is the kind of Twitter use case is just a way to kind of prove out the protocol. It just so happens they picked that one. They could have picked any number of other ones. But as people kind of build real things using that underlying kind of technology, because it's open protocol, I think things will settle down. People will find a way that they can implement use cases that concretely solve a particular problem and stay away from some of the kind of dark issues right now, which is, yeah.

Sam: What's the name that you bought?

Dharmesh: For Shaan?

Sam: You said you bought a seven figure domain name for this idea.

Dharmesh: I'm in the midst of negotiating the price on it so I'm not going to reveal it, I don't want to be outbid.

Sam: How many letters is it?

Dharmesh: Seven.

Sam: Okay. I'll be very curious to hear what this is going to be.

Shaan: You had said two spaces. One is the crypto social network. What was the other space you're excited about?

Dharmesh: The other one is broadly defined natural language processing in terms of... Okay, so let me... I'll try keep this a quick rant. So every software company that ever was has always said, "Our product is intuitive and easy to use." And the reality is every one of them lies. Because here's what happens in order for a human to use software. It's like, here's the thing I want to do and I have somewhat of training and things, whatever. And I'm going to translate the thing, my intent, I'm going to translate into a series of drags and clicks and swipes and touches to make the software do the thing that I intended to do, right? Now imagine if I were Elon, I'd be like, okay, well you should just be able to think the thought. But let's put that aside for now.

Dharmesh: Let's just say you're in Photoshop. It's like, I want to remove the background. You should just be able to say, "I want to remove the background." If you're in HubSpot, you should... How many new people signed up for our service or product in the last 90 days? You should just be able to type that question in, because that's your intent. Not like, oh, go to HubSpot's reporting tool, build this dashboard, pull that, here are the three columns you want, and get to the thing you want. You should just be able to say the thing you want, express the thing you want, better way to state it, and the software should figure it out. We have the technology now on the language side to be able to understand natural language, English and other languages, and all we really need is a translation layer. And so this is a broad based, in my mind, a mega-trend to beat. Which is in my mind bigger than mobile.

Dharmesh: The thing that mobile added for us, which is like, oh, well the thing that you used to do on your desktop, now you can do it from anywhere, and enabled a bunch of different use cases. This thing is like, okay, well, the thing that now you've been trying to learn, you're trying to use the software, whatever, but you never really got good at, you never had the time now, now a billion people can use that piece of software that wasn't even possible before because they don't have to learn the clicks and drags and things. They can express something they want and the software can do it. And then what I would do if I were an enterprising VC is I was like, okay, let's pick the categories where this thing will have the biggest impact, like business intelligence, reporting kind of stuff, B2B software is a natural fit. But I think it can go elsewhere. Yeah. And we've seen the beginnings of this on the consumer side with things like Alexa, but the B2B world I think is open for just make the software actually intuitive. Make it do what I want.

Shaan: Have you seen anyone besides, I was going to say besides Alexa, have you seen any hints of... what I call a magic trick? It's when you see somebody build a piece of software and then they're like, "Yeah, so you just do X, Y, Z, and boom, it's done." And you're like, holy shit, you got that. You just wove your magic wand and got that. And when you see a magic trick, it's very hard to un-see and you kind of can't look at the old software the same way anymore. It's like Instagram filters or something like that. It's like, oh, what your photo looks like that? Oh shit, okay, well now all my photos in my camera roll look like shit in comparison. I can't even look at these anymore. So have you seen any cool magic tricks with conversational or natural language processing?

Dharmesh: The closest I've gotten is I built something myself called Growth Bot a few years ago.

Sam: I remember that. I remember Growth Bot.

Dharmesh: And it was built for marketers to be able to get marketing data out, both of your kind of marketing systems, something like a HubSpot or a MailChimp. But also just other data sources. Like oh, well what are the top three keywords that Uber buys on PPC? That data is out there, right? We wouldn't know to kind of ask that. Or when was this domain registered? Or just a bunch of... And I would go through every night and look at all the questions people asked of this thing because it was a blank canvas, they had no idea what the thing was capable of. And then I can toggle back and it's like, okay, well here are the repeating patterns. Wouldn't it be nice if I could go upgrade the software to do that thing? So it came close. It was I think a little early. I think we're further along now. People are more used to that notion of being able to express a-

Sam: That's so funny that you do these. I'm looking at the Growth... I remember Growth Bot, people were sharing it. And you just made this. So you just whipped up this landing page and you made this?

Dharmesh: I made the whole thing. Yeah. I spent a bunch of time just learning about what's possible, coded the whole thing myself.

Sam: God, that's so funny. Gosh, this is so funny. You see that, Shaan?

Shaan: Yeah, I'm on it.

Sam: It's great, right? It's just cool that you do this stuff. And everything you do is kind of related to HubSpot, right? It's all in the same world. It seems like you're really into website graders. Is that right? That business of web. So I was talking to Hiten Shah the other day. Hiten Shah-

Shaan: KissMetrics and now he's got a new startup, Nira.

Sam: ... he did everything. Yeah, Nira. He's got... which-

Shaan: Crazy Egg, KissMetrics.

Sam: Crazy Egg, Quick Sprout, all types of shit. I mean, he's like you, he just fucking has his hands in everything. But he and his partner Neil have... neilpatel.com/ubersuggest. And then they also had neilpatel.com/rateyourwebsite or something like that. Why are you so into these website rating businesses and products? What the hell is going on with that?

Dharmesh: I'm into... So the original thing was called Website Grader. It's actually a funny story. So back when we first started HubSpot, it was just Brian, my co-founder and I, and we would go look at people's websites and to see if they would be a good fit for HubSpot software or not, right? And so we would go and I would look at their... I'd do a view source in Chrome and look at their source codes, like, okay, do they have the right metatags or do they seem [inaudible 00:53:09], right? There's a bunch of signals, you can look at Alexa ranking, stuff that you do, you folks do all day long right now when you research companies.

Sam: Like a Similar Web type of thing.

Dharmesh: Yeah. Yeah. And this is 15 years ago. And so it's like, okay, well, and we were all doing it manually, there were no tools. So it's like, okay, so I built something, that's what I do. It's like, oh, I'm going to write this tool that does... automatically goes and looks at APIs, will bring down the source code for the HTML and see if the tags are right and kind of give it, for us, give it a score. And then I had not planned it this way, it was built as a tool for just the two of us. And it's like, oh, I'm going to put this on the web because I think this is useful. And so I'm like, okay, well, what name could I give it? Well, it grades websites, I'm going to call it websitegrader.com, the domain was available. This was 15 ago.

Dharmesh: And so I put that out there and it was on fire. I had all the early leaves, like tens of thousands of people, right, would... So they had a desire to kind of grade their website. And so for the listening audience, one thing I will say is the power of building a diagnostic tool for your industry is immense, right? This is the thing that... So Website Grader was not the solution. So it's not like a freemium thing, it's like, oh, we're giving you a lightweight version of HubSpot. It was the thing that made you realize you needed HubSpot. And that was super valuable. And that can be done in any industry, whether you're in software or not. It's like, okay, I'm going to help you determine whether you have a problem or not.

Dharmesh: Because the natural thing when you do a website review, it's like, oh, I got 23 out of a hundred. That sucks. HubSpot can help. Here's what we do. Or even just read these blog posts and watch these videos. So it's worked. So I'm obsessed with kind of grading and assessment. And you folks, you guys had an episode like 10, 20 episodes ago around quizzes and things like that. So one thing people are... So if you do build a diagnostic tool, the one thing... and I've learned several lessons, but one of the key ones is that relative scores work. So Website Grader from its early days, like, okay, so if I give you an 87, what that 87 actually means is that whatever calculations we're doing behind the scenes, this particular score, you rated better than 87% of the 800,000 or whatever the number the was websites we've graded. People love that. So just that kind of relative score versus an absolute one makes a big difference. A percentile score matters a lot to people. It's like, "Oh, fuck I'm the bottom 10% or the top 10%, I'm awesome." But anyway.

Sam: Shaan, do you see his list of ideas? Let's just start banging them out. I want to-

Shaan: Well hold on. So there's two things. So first, I think the thing you just described is a growth hack without saying I did it to a growth hack. You solved your own itch, but that's such a... We've talked about it for quizzes, quizzes, same thing, lead gen. This is an amazing lead gen tool where you basically got a bunch of qualified leads, people who self-assess, I have might have a problem, they go get it checked up. Your digital doctor said, "Yep, you indeed do have a problem." And then all you had to do is prescribe a solution called HubSpot. Here's HubSpot in a little bottle for you.

Dharmesh: I'll tell you how clueless I was back then. So I put this thing up there, and at the time we had a meeting set up with Gail Goodman who was the CEO of Constant Contact at that time. And she would later join HubSpot board. But we met with her and was like, "Oh, we're working on this company called HubSpot." It's kind of related to Constant Contact's space and we want to get her advice. And I showed her Website Grader, I was like, "Oh, here's what we do and we can kind of look at websites or whatever." And she loved it. And then she was like, "You might consider putting an email address box." Because we had no way of knowing who these people were. They were not leads for us. We had like a hundred thousand people use the tool-

Shaan: Right, unintentional growth hack.

Dharmesh: I had never thought to collect an email address. Like, oh, wouldn't it be nice to... Anyway, now we can fix that.

Shaan: So I like that. And then also for this conversational thing, I think what you just said, it's kind of like sometimes guests on this podcast say something in passing that I'm like, whoa, whoa, whoa, that's actually a really big idea. And I think you actually said two. I think that the crypto LinkedIn one is a big idea, and I think the second one is this idea that if you think about one of the biggest and what some people say is the best business they've ever seen is Google, right? People come in there, it's just a search box, it's a magic genie. If you go ask a question, it tries to give you some answers.

Shaan: And the way I view this as if somebody could actually do this, this is sort of like next level Google where I ask it any question and it doesn't just give me a list of pages where the answer might be, it actually gives me the answer. And so this might be in the business context, it might be like a business Google, but there's many versions of this. I don't know if you've seen this, have you ever seen dBuild? Have you checked out this website?

Sam: Yeah, we talked about dBuild.

Shaan: So my friend Sharif, there's a perfect example of a magic trick thing. He was messing around with GPT-3. So GPT-3, new technology comes out, he gets access right away, drops his whole startup, starts hacking on this thing at night, right? And he throws up this... he has this idea of like, dude, Squarespace, Wix, these website builders have been around forever. Great, everybody wants to be able to code without having to code, but even now it's still so complicated. Even after Webflow, after all this stuff. And so he's like, why can't you just describe like, I want a website that's got kind of like two columns and on the left, I want pictures of places you can stay, and on the right I want the price of the thing. And you could literally just type that in and it'll build you a website that looks like Airbnb. It'll build you a website that does that.

Shaan: And he posted on Twitter a gif. He's like, "I'm messing around with GPT-3 and watch this. Build a website with a photo and then add a PayPal button, but then make it where the PayPal button can only take $5 max. And that's it. And then send the payments to this." And it spit out a website that did that, like the HTML, the CSS that did that. And he posted that gift. And I think off basically one tweet with one gif, he raised like $2 million instantly from really smart people when that tweet went viral because they were like, oh, you just showed me a magic trick. And I don't know what the company is here and I think he still doesn't know what the company is, but go down this path and see what you can find.

Sam: It was pretty amazing. I remember when that tweet went live, I mean, it went viral right away.

Shaan: Right.

Dharmesh: I played with GPT-3, played with it for awhile across multiple things. It's like the closest thing to magic that... It's weird because it's kind of a different vector, right? Because it originally is like a text generation mechanism to be able to write pros based on... because it's got this corpus of data behind the scenes. And I talked to Sam Altman, the CEO, Brian and I had a... he was gracious enough to give us some time to... It's like, okay, well, where is this headed? What's going on to see the kind of impacts of HubSpot in general? And that's one of those things that right now, I don't think it's quite there be able to implement practical use cases to actually do the thing that people are trying to do, like play with it on kind of multiple fronts. But it's one of those that it's going to go from a zero to a one very, very quickly. It's like all of a sudden that wasn't really possible and didn't really quite work well enough, and then it's going to be like, holy crap. Then there's the kind of post GPT-3 world-

Shaan: What's that phrase where it's like, slowly, slowly, then all of a sudden or something like that. Yeah. Looks like it's going to be that. Sam, you said you liked some of the ideas on this list or some of the topics. Let's just [crosstalk 01:00:22].

Sam: We just talked about something huge. That was a huge idea. Let's talk about something small, but still cool. So it looks like, did you buy remoteculture.com?

Dharmesh: I did.

Sam: Okay. So that's a no brainer. There's a business that will make a million dollars a year. Remoteculture, online community for those building remote cultures, easy, right? That's a no brainer. What would you do there?

Dharmesh: I would start a community for remoteculture.com. I'm going to do a blog, I'm going to do a paid community, and it's going to be targeted at people ops and HR people around the world that need to kind of figure out the new kind of new world order, right? We're not going to try and sell them software, we're just going to connect them to each other. And I'm a big, big believer in these kind of communities and network based businesses because they're efficient in terms of they don't take that much, yet got to get the critical mass, that's fine. But I think this one would work. It's a community that's necessary at this moment in time that hasn't existed because it hasn't needed to, now it does. And I'm sure there's people out there doing it, but money helps, you can actually build something.

Shaan: There's one on here that I really like, speed round. By the way, these are what? These are domains that you don't have a idea for yet?

Dharmesh: [crosstalk 01:01:31] by the way. When I have an idea that's enough in my head that it's like, okay, well, this is kind of cool, I don't write it down on a notebook, I go find a related domain. And it's like, it costs $15 if it hasn't been taken yet. Or maybe I'll spend more if it's something really kind of strikes my fancy. [crosstalk 01:01:47].

Sam: What's the most expensive domain you own?

Dharmesh: We haven't had them valued. I don't really sell domains. I own birminghamalabama.com because I live there, I think that's probably a good seven figure domain. I just bought humanism.com and humanism.org from-

Sam: You also bought one for me.

Dharmesh: I bought one for you, I bought thehustle.com for you as a gift I was going to give to you on the podcast.

Sam: So-

Dharmesh: [crosstalk 01:02:15] learn that you don't care about domain names all that much.

Sam: No, no, hold on.

Shaan: That's like a deal trophy, right? Whenever you get acquired, they have this little trophy. I don't know, Sam, did you know about this? Deal trophies?

Sam: No, I want a deal trophy.

Shaan: So when we got acquired, they gave us like... it took a few months, but it was like, "Hey, sorry. I meant to get this to you when the deal closed." But I guess it's like in the deal making world, I'm not like a mover and shaker of biz dev and corp dev and things like that, but I guess it is sort of a tradition of when the deals close, it's sort of the champagne, then what you do is you get sort of a little ornament that has some meaning to the deal. Like in our case, our code name was like project whatever, and it was... let's just call it project sharp. It wasn't-

Sam: I think we were project H or something.

Shaan: So then they got this kind of cool looking knife, because it's project sharp, or whatever. Here's the-

PART 3 OF 4 ENDS [01:03:04]

Shaan: This cool looking knife because it's project sharp, whatever. Here's the deal trophy. So I think your deal trophy is this domain here.

Sam: Well, and for the record, Dharmesh, if you give that to the Hustle company, we would love it. And I actually do like domain names. My whole point about domain names was it's...

Shaan: Don't let it stop you.

Sam: 99% of people are not like you, are not like me. We do shit. You're killing it. And you just made this little rinky-dink project called GrowthBot. We do shit. 99% of people don't do shit. And they have stupid excuses like, "Oh, I don't have a domain name. It's taken. Or I do have a domain name therefore, I should do that."

Sam: My point is don't let it stop you. But I still think it's sick and it's awesome. And I love it. It's like saying like, "Just because you don't have a sick gym doesn't mean you can't go out there and walk and lose weight."

Dharmesh: That's [crosstalk 01:03:47]

Shaan: I think Justin was on the podcast last time and he was like, "There should be a dating app that matches you on your credit card spending history," or something like that.

Shaan: For me, that's what it's like with this podcast where it's like, if you just tell me how many domains you own that you actually bought, but you don't have a live project on, if that number is greater than 10, we're going to be thick as thieves. And how many tabs do you have open right now?

Shaan: If I just knew those two things, I can tell you if this podcast is a fit for you or not. If you are somebody who owns zero domains, then you probably aren't going to really connect with this podcast in a major way, I don't think.

Dharmesh: Well, I'm going to pull a [Balaji 01:04:23] here is, I'm going to push that conversation on the stack. But one thing I want to make sure I get out there because it's on a list of things. You're talking about ideas. It's like, how do you assess ideas? How do you think about ideas? I know Shaan, you love frameworks. You do too Sam.

Dharmesh: Here's a simple one, in terms of assessing and whether you're doing it for yourself or you're investing, whatever it is. And I'll tell you the common mistake. So the three things I look at are profit potential. If this thing went exactly as planned, as the founders envisioned, what could it be? Let's just assume all thing, all the stars align, everything works the way you expect it to and it goes. What would it be?

Dharmesh: What's the overall potential for the project? What passion do you have around it? It's like, okay, are you excited about it or not excited about it? And the third one is around probability of that success that you want. Right. And I'm a client-based guy. So I'll take each of those factors.

Shaan: Score it.

Dharmesh: Of zero 10 square and multiply them together and I'll get a score out of 1,000. And you can put the weighting differently. It's like, "Oh, I care more about passion than the profit potential or something else." But the common mistake people make is that they will look at the probability of success first and almost exclusively as the high order bit filter.

Dharmesh: It's like, "Oh, I had this idea, but the likelihood is 0.01% that that's actually going to work. And so, I'm not even going to think about what the potential could have been or how passionate I may or may not be about it." And then they just discard the idea.

Dharmesh: I think that is statistically unwise and a impractical move. And here's why. Is that the way you should be looking at ideas is you take the profit potential. Here's the possible outcome multiply this. It's the EV, the expected value statistically of this thing. It's like, "Oh, I have a 1% chance at a billion dollars." The expected value is 1% of a billion dollars. That's the value of that particular thing.

Dharmesh: And so, you shouldn't discard something just because the probability is low because it may have a disproportionately high potential that makes it more interesting than it would otherwise. So that's the... Be a little bit more structured about how you assess things. That people throw things away too easily, because...

Dharmesh: And a second note I'll put in hard won lessons, good ideas are dangerous. And they're dangerous because what you want to find are the great ideas. That's the thing you can get behind. You don't have to find them before you start the company. We can talk about that.

Dharmesh: So bad ideas are easy to spot. That's just a bad idea. Good ideas masquerade as great ideas and it's hard to tell them apart. And they're the ones that end up spinning a bunch of cycles for you. And it's like, "Okay." Well, it ended up being good, but just it's... Yeah.

Dharmesh: Failure is not a product. Mediocrity is the thing everybody should be fearful of. It's like, just get it out there, try and see what happens. But anyway.

Sam: [crosstalk 01:06:57]

Shaan: Mediocrity is the big problem, because it wastes the most valuable resource. It wastes time.

Dharmesh: That's it.

Shaan: Right. Because it's not going to die quickly, nor is it going to take off. So it is a slow, long burn at a mediocre level. And so, you're locking in over a period of time, a mediocre outcome. And that's why mediocrity is the biggest risk.

Dharmesh: Yeah, well one thing that I think is hardest about bootstrap companies, especially tech companies that have a low capital need, is they can actually live forever and not go anywhere. Right. Because it doesn't take that much to... It's like, okay, you've got an AWS instance somewhere that's costing you. It doesn't really cost that much.

Dharmesh: And you don't have investors pushing on you to say, "Oh, we need some sort of outcome." And so, you can run that company indefinitely and waste a bunch of your time when the next idea that you could have done was sitting right behind it. Right.

Dharmesh: I've talked to hundreds of entrepreneurs by this point. I have never, ever in my entire life met an entrepreneur that had just one idea. It's like, "Oh, you will have more dude." It's like, okay. Try to think if you can sell the thing, sell the thing. If you're not that excited about it or you just want to cash out, take some chips off the table. There's no harm and no shame, but yeah.

Sam: But you guys didn't raise a significant amount at HubSpot, did you?

Dharmesh: 105 million.

Sam: Oh.

Dharmesh: Before it went public. Yeah.

Sam: Oh.

Dharmesh: HubSpot's a classic venture backed playbook company. And intentionally so.

Sam: And that seems interesting to me because you seem like a guy who likes freedom and knows what he is and knows that [crosstalk 01:08:23].

Shaan: Bootstrapper is what he's trying to say.

Sam: Yeah, yeah.

Shaan: Why don't you bootstrap?

Dharmesh: I'll tell you the exact conversation we had. So when Brian and I started this, one of the things we were firmly agreed on is that... I'm not a baseball or a sports person, but we didn't want a single or a double hit. Right. We wanted to swing for the fences.

Dharmesh: And either we do this and at every point that we have a decision to make a fork in the road, we are going to take the one that gives us a higher chance of being the spectacular outcome. Even if that means we're possibly going to go down and crash in burning flames. Right. And so-

Sam: But was Brian, was he successful like you were? Or was he [crosstalk 01:09:01]

Dharmesh: He didn't need it. He hadn't had an exit because he hadn't done a startup before. This was his first one, but he also was like, "Okay, this is my last swing at bat. Right. This is it. This is the one that's either going to do it or not going to do it."

Dharmesh: And so, that was the reason. So we weren't worried about diluting it. We negotiate the fairest value we could. We made sure the terms were meaningful and had good investors. But we were not worried about what our percentage take in the company was and how that moved over time. Or like, okay, if this thing does what it needs to do, the valuation and all that, then the equity dilution will not matter. On the margin it just...

Dharmesh: We want it to be a binary outcome. Either it's going to be this huge, massive thing, which will change our lives and have a massive impact. Or it goes down and crash in burning flames, which is highly likely. But we weren't looking to hold onto control. We weren't looking at this. We didn't want to be king. We want to be rich, I guess.

Shaan: Right.

Sam: But when you're doing ideation and stuff though, I think you wrote it here, you're down with starting a project with a bad idea, because you're quite confident that you can make it great as you get into it. Right.

Dharmesh: My general advice is, and this is not just my personal lived experience as new folks would say. Having talked to entrepreneurs and looking at the history of them, so many of them, the thing that we know them for now is not the idea they originally started with.

Dharmesh: There are a handful of cases where yeah, when exactly the plan, this is what it was. And often the cases that you will not find the great idea until after you start your company. Until after you start having contact with customers and actually try and do the thing. If you sit on the sidelines, trying to assess ideas and look at market metrics and things like that.

Dharmesh: And it's like, you're just never going to get started. That's the kind of wannabe entrepreneurs that will analyze it to death. It's like, you wouldn't even know what a good idea was. It's hard to tell these things until you actually try something. Yeah. [crosstalk 01:10:54] So my advice is just do it and try it.

Sam: Where do we go from here, Shaan? We got [crosstalk 01:10:59]

Shaan: I think we got to wrap. I think we have to have you on again if you're down because here's five topics I want to hear about. Why I don't play golf and what I do instead. I want that one. Why I hate inefficiency in markets. Why I don't believe in karma, but I believe in extended feedback loops. Sometimes faking it is making it. Introverted engineer's guide for public speaking.

Shaan: I need all of these, so we may have to do another one. I have one question I want to wrap with in this one. Which is, you seem a pretty astute guy, you have very good observations. And I think you know who we are and what we care about and that we would value honesty. So I'm curious-

Dharmesh: You can ask me the intro question, aren't you? You can ask me the intro question.

Shaan: No, no. Not the intro question. Sam's trying to get all the intros. He can ask you that one. I want to know... I'm trying to make the content great. So what would be the most fair criticism you could give us on the podcast? What's your critique of the podcast for you as a listener?

Sam: You can offend, you can offend.

Shaan: Yeah, exactly. That's what I'm teeing you up for. Say whatever it is, whatever you truly feel.

Dharmesh: All right. So partly is I think you have to recognize that you guys are a multi-channel. So, you're solving for the audio format. I know you have the YouTube videos and things like that.

Dharmesh: But the one tactical thing that you should fix next week or the week after, is you should apply the Shaan 25 headlines thing for headlines for every podcast episode. What's the one nugget that's going to cause people to want to listen to that episode, even if they're not subscribed? When they see it in their YouTube feed and YouTube recommends it, it's like, "Oh, why this successful entrepreneur never played golf and you shouldn't either." Whatever it is. Right.

Shaan: Yeah, exactly.

Sam: I'm taking notes. Keep going.

Dharmesh: If you do that, my guess is that the click-through rate goes up because it can't not. Right now, you just identify the episode number and who the guest is or whatever, but there's no real... Or maybe the topic area, but [crosstalk 01:12:46]

Shaan: Right now, me and Sam don't even touch the headlines.

Dharmesh: [crosstalk 01:12:51] you want people to click.

Shaan: Dan does it. I don't even know. I see a notification that goes out and I judge the headline myself. I'm like, "Ah, that's not going to get very many clicks." Or, "Oh, that's a juicy one. That'll work."

Dharmesh: I say give Dan a free pass to the Shaan copywrite report.

Shaan: No, I did. I put him on the course yesterday.

Sam: That's awesome. What else?

Shaan: What else you got? Anything else?

Sam: Of course you do, you have more.

Dharmesh: Who me?

Sam: Yeah. Yeah. That was a weak criticism.

Dharmesh: Oh, whoa, whoa, whoa, yeah. That was an easy one. Okay. This is a hard one. Right. Is around...

Sam: Just going to say, change your voice.

Shaan: Like your face. [crosstalk 01:13:27] pose. It's yours.

Dharmesh: So, it's around the brand. And this is the hardest thing for an entrepreneur to reconcile with. So, a couple issues that I have as a amateur branding person, is that anything that can be reduced in acronym will be, which my first million is often reduced to that. And then you lose the punch because when it comes down to an acronym, anyone that comes, immediately, they're not going to know what it is if they don't know what it is.

Dharmesh: And there's some value to that, but it doesn't compensate for the opportunity you have. So that's the one thing, is that acronyms not good. But the other one is that, my first million, there is a cadre, cadre, however that word is pronounced, of people that that topic will resonate with. "Oh, I want to learn about that."

Dharmesh: But I think your reach is much wider now. And there are probably more people outside that sphere of that particular... Like, okay, well it's fine that it's about that. But really, the reason I'm here is to hear folks like Balaji. And that episode, which is, I think one of the best episodes you've had, had nothing to do with the first million anything. It had to do with big ideas [crosstalk 01:14:33]

Sam: Look. I actually agree with you. And we have had this conversation. The problem that we have was, fuck we're pretty deep into it. We can't change.

Dharmesh: You have equity. Yep. Yep.

Shaan: For what it's worth, I think we should change just because I hate the name. So I don't really care about the brand equity. I'm just like, I don't want to have a thing that I dislike.

Dharmesh: Yeah. I don't love it. I really don't.

Sam: I don't love the name. I don't love the name of the Hustle either.

Shaan: If you believe that this thing is going to get 10 times bigger in the future, which I do, then 90% of our future listeners haven't even heard about us yet. And so, we're only changing on a very small population of people for the good of the long run. That would be my [crosstalk 01:15:14]

Dharmesh: And by the way, if you think it's hard now, you realize the direction you're headed, it does not get easier. Right. It's going to get harder and harder. A year from now, two years from now, five years from now, it's like, "Ah should we have changed this? What would have been?" It's like, not that it's going to have a dramatic impact on the numbers or anything, but on the margin, these things matter. And they accrue, accumulate.

Dharmesh: And here's what I would do to make life easier for yourselves. Don't decide to change the name, decide to come up with alternatives and then objectively measure those alternatives. "Okay, am I willing to give up the brand equity and go through the pain of changing the name because this one is just so much better?"

Dharmesh: If something clicks for you, great, but make an honest, concerted effort to come up with those alternatives and options. And then you can still decide. It's like, yeah, these are better, but they're just marginally better. They're not better enough to go through the headache of trying to change it.

Shaan: Right.

Dharmesh: That would be my advice.

Shaan: Okay. That's great. Sam, you want anything else before we go?

Sam: We're going to follow up with some intros, my man, we got.

Dharmesh: We can do that.

Sam: Dan, Dan, do we have an update? Are we reaching out to guests? We got to use Dharmesh. He knows everyone.

Shaan: Well, I'm curious, actually. You do know everybody. Who's awesome? Who's particularly awesome that you're just either, is underrated or you're just...

Dharmesh: [crosstalk 01:16:27] I don't know as many people as you think. I'm on the internet. I do things, but I don't leave my house. Right. In order to be that person, you have to interact with carbon based life forms in real life. Right.

Dharmesh: I don't do that. That's not a thing I do. So, it's hard to build those kinds of relationships, but on your list, I would have... So I'm not going to be good at intros. [Nevaal 01:16:49] would be awesome to have on the podcast. He's like at that Balaji level thinker. And I think he'd be awesome. The audience would love him. So that would be great.

Shaan: Great. We'll take that intro. Thank you.

Dharmesh: Yeah. He doesn't know me. I mean, he knows me loosely. [crosstalk 01:17:02]

Sam: I'm going to start calling you... We'll call you Uncle Dharmesh. You got to hook it up though, man.

Dharmesh: [crosstalk 01:17:09] I'm willing to try. Don't get me wrong. I have qualms about trying to make the intro. Just manage your expectation. It's like, "Wow. I thought Dharmesh actually could swing things and make shit happen." I can't to tell you the truth.

Sam: Anyone else?

Dharmesh: Let's see. Someone I do know that I think would be good on the podcast, Drew from Dropbox I know really well. So that's an intro I could make.

Sam: What's up?

Dharmesh: [crosstalk 01:17:34] Dropbox.

Sam: Yeah.

Dharmesh: That'd be a good one.

Shaan: I heard he's an amazing singer. Is that true?

Dharmesh: He's a good singer [crosstalk 01:17:43].

Shaan: For a founder. Amazing for a founder is what I mean.

Dharmesh: He's legit. He's legit.

Shaan: Yeah.

Sam: Dharmesh, Shaan was pretty nervous coming up to this because he was like, "Well, I just like to over-prepare and I don't think good on my feet." Or sorry. You're like, "I prepare and I don't love just making shit up." I think you did an excellent job. Dan has been texting me saying, "Dharmesh is so awesome."

Sam: I told you Dharmesh. I told you this yesterday. I'm going to predict the future. You're going to come on. And then you're going to start wanting to come on once a month maybe. I have a feeling that we have just accomplished that and that's going to be true. You're freaking awesome. What's your Twitter handle? It's just Dharmesh, so D-H-A-R-M-E-S-H. You're really active, so if people want to get in touch with you.

Dharmesh: I'm Dharmesh everywhere, LinkedIn, Twitter, Facebook, pick your thing.

Sam: Anything you want to-

Dharmesh: Dharmesh.com, dharmesh.org, dharmesh.net. But yeah.

Sam: Anything you want to pimp out or promote?

Dharmesh: No, I'm not a promoter kind of guy. That's not my thing.

Sam: Humanism.

Dharmesh: Humanism. Yeah. Well, we can talk about this next time. Not the humanism specifically. But back to the branding thing, we'll close on this note. Do not make your brand... So atheism, which is you don't believe in a God or whatever, as a philosophy. It's marketing problem is the fact that nature abhors a vacuum. And you shouldn't define things by what you're not.

Dharmesh: It's like, "Oh, our philosophy is we don't believe in a God." It's like, "Okay, well, what's the thing?" And that's what humanism is. Essentially, it's atheism but with a purpose and a very specific marketing pitch, so to speak, in terms of what the core set of values are. That's why I like it.

Sam: Well, thanks man. This is awesome. I talked to you a lot. I want to set up times to just holler at you because I want to learn about you more. I want to learn about HubSpot.

Shaan: Sam wants to be your first direct report in 15 years.

Sam: No. No, no, no. I don't want that.

Dharmesh: You don't want a direct report.

Sam: This is great. Heaton was like, "You got to learn from Dharmesh. Just learn what makes HubSpot tick." So thanks, dude. This is awesome. We're going to have you back on.

Dharmesh: [crosstalk 01:19:39]

Sam: Did it turn out as good as you thought?

Dharmesh: I love you guys. This was fun. Yeah. And I say it's just more importantly, I hope it ends up being useful for the audience. That's the thing I'm solving for.

Shaan: Honestly, I'm looking at this doc. I feel like we left a lot on the table. We have a lot more that we could do. I'm regretting... You have to. I always feel this way with a guest, by the way. I'm like, "The first 20 minutes were slow." But it's also like, I've never met this person. And the audience doesn't know all about this person. So there is a certain context building that has to happen.

Sam: Yeah, you've got to date.

Shaan: I've got to figure out why, every single guest I'm like, "Oh, the first 25 minutes were slow, but then it got really good." And yeah, I don't know if that's just my own, I'm just kicking myself for no reason. Or if other people feel that way. Maybe we should actually do something different and pull the future forward. Just start at that 25 minute mark, basically.

Dharmesh: This was fun folks. That's all right. Yep.

Sam: All right. That's a wrap.

Shaan: All right, Dan. You can stop it and then, leave the tab open just because it-

PART 4 OF 4 ENDS [01:20:37]

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Happy Birthday, HubSpot! 15 Lessons Over 15 Years

dshah@hubspot.com (Dharmesh Shah) — Wed, 09 Jun 2021 19:55:24 GMT

15 years ago today, on June 9, 2006, HubSpot was “officially” started. I say “officially”, because unofficially, I had been noodling on the idea of HubSpot for a couple of years with my co-founder, Brian Halligan while we were both classmates in grad school. I picked the June 9th date, because that’s the official date that I graduated and was no longer a student. (Brian graduated a year ahead of me, and I was still working on my thesis).

I don’t have a lot of photos from the early years, because as it turns out, neither one of us are big “photo people”. But, here’s one of us celebrating HubSpot’s 2nd birthday.

In the past 15 years we’ve had a bunch of fun and learned a ton (rhyming unintended, I’m proud of myself for resisting the temptation to try and turn that into a poem). The company has grown significantly from the two founders (and a house plant named Duo) to a globally distributed company with 4,000+ employees that’s publicly traded on the New York Stock Exchange with a market cap north of $20 billion.

I thought I’d share some of the lessons learned.

Note: These are in no particular order, because I wasn’t sure what sort key to use.

15 Somewhat Humble Lessons From 15 Years of HubSpot

Build a diverse team early. Of the many professional mistakes I’ve made, not doing this is one of the biggest -- and the one I most regret. Candidly, back in those days, we didn’t think about diversity -- or for that matter, the broader topic of culture, all that much. But we should have. When you build a mostly homogeneous team, you incur culture debt. And much like financial debt and technology debt, you’ll have to pay it off at some point. But, whereas financial debt can be paid off by writing a check and technology debt can often be paid off by rewriting/refactoring parts of the system, culture debt is much more insidious. It’s really hard to pay it off completely. Try not to take on that culture debt. Your future self will thank you.
Instill a “customer first” mindset and implement mechanisms to foster it. We did pretty well on this. Solving For The Customer has been part of our culture from the early days. We have several mechanisms that help us walk the walk, and not just talk the talk. Examples include having a live customer interview at the start of every company-side, all-minds meeting. We do an NPS survey of our customers -- nothing remarkable there. What is remarkable is that we pipe the live responses directly into a dedicated Slack channel. Over 1,000 people at HubSpot are subscribed to that channel (on a voluntary basis). We maintain a list of what we call “sharp edges”. Decisions that we made along the way that were not as customer-friendly as they should have been. Every year, we work to try and smoothen out those sharp edges.
Good intent is necessary, but not sufficient. Good execution is what pays the bills. We’ve had this GSD (Get Sh*t Done) attitude since Day 1. We’ve always been very execution oriented. Part of this was by necessity. We didn’t have the luxury of some brilliant invention or non-reproducible that would carry us. We had to push to get through.
Learning culture through osmosis stops working pretty quickly. The degree to which people learn by osmosis about the company culture down as the number of people go up. As early as possible, you need to write the culture and values down. It doesn’t have to be a deck with 128 slides, like HubSpot’s Culture Code (v1 of the deck was 16 slides) -- it can be a single sheet of paper (I hear those still exist), or even a napkin. But you need something. And that something has to be articulated in collaboration with the team. Otherwise, there’s high risk of it just turning out to be words.
Transparency is scary -- but spectacularly effective. It’s scary, because there’s always the risk that someone abuses the trust. But there are many upsides. First, the best people (you know, the ones you’re trying to recruit) value transparency, and the degree to which they value it has continued to go up. Second, transparency is efficient. It makes a lot of things easier when you don’t have to spend hours and hours debating who should have access to what information. It’s why at HubSpot, we share everything with everyone on the team -- and have since Day 1. If I could do it all over again, I’d do it in a heartbeat. Or should I say, HEARTbeat? (Inside joke, sorry).
More companies die of co-founder conflict than any other cause. To minimize that risk, choose your co-founder(s) wisely. The most important thing is not their skillset -- it’s mutual respect, admiration and dare I say love. (Hi, Brian, love you dude!). Apologies for the PDFA (public display of founder affection). That’s not usually my style, but I have my human moments every now and then.
Though it’s fun to create a new category, it’s not always necessary. Elon at Tesla didn’t create the electric vehicle category. Tobi at Shopify didn’t create the eCommerce category. HubSpot didn’t create the CRM category. But, one thing we all did do is helped a bunch of people that might not have been experiencing the benefits of that product category before, start to do so.

Note: In our early years, we did create the “inbound marketing” category -- and though that helped us with growth in the early years, it was hard, expensive and risky. I don’t know that I’d recommend it for everyone.
Believe in your team. If you have an ambitious dream (we certainly did), keep pushing towards it and give your people the autonomy to try -- and sometimes fail -- in the pursuit of it. They will surprise you with spectacular feats of awesomeness. One thing I’ve learned, is that Brian and I usually have our dreams and wishes come true -- but not always when we want them. Often, things take time. Great ideas can often take years to crystallize into reality. And, it’s not always obvious that an idea is great.
Push yourself and the team to take smart risks. This gets harder and harder to do as you scale, but it’s critical. The natural way of things is to get increasingly risk-averse, because the bigger you grow, the more you have to lose. That’s why, you have to push to make bold bets. They don’t’ have to be bet-the-company scale bets, but they need to have a chance at being spectacularly impactful.
Be rationally generous. Always try to add value before you try and extract it. It’s OK to leave some money on the table. You don’t have to always try and maximize how much of the consumer surplus you capture. It’s OK to let your customers and partners benefit. It’s OK to charge less than the value you create -- or even the value that you could reasonably negotiate.
Avoid cynics -- they are toxic, energy sucking vampires. I’m not talking about skeptics here -- I’m talking about cynics. Skeptics will often push and question and play the devil’s advocate role. But, they do it because they want to make things better. It’s important to have some of those people on the team. Cynics on the other hand are profoundly negative because they don’t believe people/organizations can have good-intent or motives. Deep down inside, they don’t believe the organization will improve or get better. You get bonus points for recruiting smart people that are energy accretive and lift everyone's mood. They'll make you happier too -- life is short.
Your long-term success will be defined by the “systems thinkers” on the team. These are the folks that like to analyze things. They are bothered by unnecessary complexity and love to simplify. They are always looking for leverage (i.e. finding clever ways for seemingly small things that can have disproportionate impact over the long-term). They are pattern-seekers and puzzle solvers. Note: When I say “systems”, I don’t mean just technical systems -- and I”m not just referring to engineers here. This applies across every department and every discipline. Find and foster the folks that think in frameworks and flywheels.
Most things are learnable skills both at a company level and an individual level. When someone has “natural talent” for something, all that usually means is that they’ll be able to acquire that skill with less time/energy expended. But, if you’re willing to do the work, you can get pretty good at whatever you choose to do. Even for the company -- acquiring a particular skill (or “building a muscle”, as we say in HubSpot) may be hard, but it’s usually not impossible. You just have to figure out which hard skills are worth acquiring. At HubSpot, we started being really good at marketing and sales. Then, we deliberately decided to invest in making an amazing product. In our early years, we were really good at inside sales. A decade later, we decided to invest in getting really good at freemium and product-led growth.
Learn as much as you can, from anywhere you can, constantly and forever. Don’t be a know-it-all, be a learn-it-all. (I got that from Brian, who got it from somewhere else). It’s tempting to think of ourselves and our companies as these special little snowflakes -- and we are. But that doesn’t mean there is not wisdom and insight we can draw from others and pick the ones that feel like they might work in our business. At a tactical level, strongly encourage people read books. Long ago, we implemented a free books program whereby anyone at HubSpot can get any book that will help them learn and grow. Company picks up the tab. One of my favorite things that we’ve done.
Align your vectors. Make sure that at every level of abstraction things are aligned. Make sure each person is aligned with others on their team. Make sure each team is aligned with the mission of the company. Make sure the company’s mission is aligned with the interests of the customer. The magic of increasing alignment is that you can get more progress while holding both the number of people -- and their average competency, constant. Let me say that one more time for dramatic effect: You can take the exact same people and keep their skills exactly the same, and get better outcomes, simply by improving the degree to which they are aligned and pointed in the same(ish) direction. I’ve written about this in more depth on this topic here. Aligning Vectors To Optimize Impact.

Phew! Once I got into flow, the thoughts flowed more easily. I’ve got more in my head, but will save that for another time. I believe in “release early, release often”.

Why I'm Investing $1 Million In BitClout

dshah@hubspot.com (Dharmesh Shah) — Mon, 07 Jun 2021 13:09:01 GMT

I’ve decided I’m going to invest $1 million in BitClout the blockchain-based, crypto-currency powered social network that is all the rage (at least within some circles).

If you don’t know what BitClout is, I think my earlier post “What’s BitClout?” is a decent overview.

OK, back to that million dollar thing. To be clear, I’m not buying shares in BitClout (the company). I have it on really good faith that one can’t really do that, and nobody has done that.

Instead of investing in the traditional sense, I’m going to do a combination of the following:

Invest in startups/projects that are building value on and creating value for the BitClout ecosystem. Example: I’ll be investing $100,000 in @bitswap (and here, I mean buying equity/shares in the startup).
Invest in $dharmesh (my own creator coin on BitClout).
Investing in other creator coin. (This is less as a way to generate a financial return and more as a way to show support for useful content and tools).
Hold BitClout (the currency) itself. Note: A few days from now, the number of BitClout coins will be frozen.

Back to the million dollars. Why have I decided to invest such a large amount (higher than my usual)?

Before I answer, a super-important note: I am not an investment advisor and this is not financial advice. I am not (remotely) suggesting you should do what I did.

OK, so back to the why...

First, I’ve been a believer in BitClout from the early days. You know, like waaay back in March. I just think the potential for a platform like BitClout is immense. Will it be the one that actually achieves that potential? I don’t know, but it’s the best implementation I know of a blockchain powered, crypto-based social network.

As evidence, one need only look at the momentum.

Momentum in terms of the community on the platform.
Momentum in terms of innovation of the platform itself.
Momentum in terms of apps and tools being built on the platform.

I also love that BitClout is not just open source -- but also open data. They've released all the code, and if you so chose, you could run your own node and get access to all the data on the chain.

Further, I like how the project team is thoughtful around environmental impact. Just hours ago, it was announced that a recent BitClout update reduces the power consumption by a factor of 10.

I am proud to announce that the dev community has committed to moving to
a zero-waste consensus mechanism, and that it is taking a major step in
that direction with a new update.

~ @diamondhands

Also, one of the big issues I had with BitClout was how hard it was to actually join and engage. To do that, you needed to own BitCoin and transfer some of that coin into BitClout.com in order to do anything. That's really high friction. Recently, they've removed that friction so that anyone can join BitClout.com without needing to own BitCoin (or even know what it is).

Finally, it’s partly because the first time I got really excited about the blockchain and crypto-currencies, I invested in a company called Coinbase. And, because I like trying out the products of the companies I invest in, I used Coinbase to buy some BitCoin. That was back in 2015. Coinbase went public earlier this year (2021) and currently has a market cap of over $40 billion.

Over 15 years of investing in over 80+ startups/projects, I've learned to trust my instincts and as long as one acts within ones tolerance for risk.

The hit you take from many failures is often overshadowed by the handful of successes that turn out to be massive outcomes.

If you want to follow me as I learn and share, you can follow @dharmesh on BitClout.

Hope to see you there and hear your thoughts.

Cheers.

Culture Is A Product You Build For Your People

dshah@hubspot.com (Dharmesh Shah) — Thu, 20 May 2021 00:24:58 GMT

I’ve been thinking about, talking about and working on culture for at least a decade. (Not counting the 15 years I spent being mostly clueless about culture in my first startup).

I've spent hundreds of hours working with the HubSPot team to create the HubSpot Culture Code deck. It has been invaluable for us as we've scaled from a 2 founder startup to a 4,000+ person scale-up with a market cap in excess of $22 billion. Here it is...

Of all the lessons and insights learned from all that tinkering, this is my biggest epiphany:

Culture is a product and your people are its customers.

Said differently, your people/employees are the customers of your culture, which you can think of as a product.

So, every company actually has two products: The one they offer their customers, and the other they offer to their people/employees.

To explain the thinking here, let’s enumerate some of the ways culture is a product and tips for applying the metaphor to craft more effective cultures that support growth and scale.

Customer Feedback / Culture Feedback. Just like you would never build a product without talking to customers, you wouldn’t try and craft a culture without talking to your people, and understanding what their needs are.
Product Is Never Done / Culture Is Never Done. Just like a product is never “done”, culture is never “done”. You have to keep iterating. Too many startups make the mistake of thinking their goal is to “preserve” their startup culture as they grow and scale. That shouldn’t be the goal. The goal should be to evolve the culture/product over time so it continues to meet the needs of the employees/customers. Yes, there are some of your core values you want to hang on to, and you want to keep your startup "spirit", but as you grow, a few things will likely need to be tweaked.

Example: In the early days of HubSpot, nobody had job titles. We thought they were a waste of time. Nobody cared, and we thought they were a waste of time. As we grew, we came to accept that job titles are useful and though the founders may not care, other people do (understandably) care, because there is life after HubSpot (or so we've heard).
Measure/Analyze Product / Measure/Analyze Culture. Just like you would measure and analyze how a product is doing -- based on feedback from customers, you should measure and analyze how your culture is doing, based on feedback from your employees.

Example: At HubSpot, every quarter for many years, we do an eNPS survey (employee Net Promoter Score) that has two questions: On a scale of 0-10, how likely are you recommend HubSpot as a place to work? Why did you provide that score? We then go through *all* the survey responses, and categorize the "bug reports and feature requests". We then report back to the team as to what the patterns were, and what we're doing about them. Some are "Yep, that's a bug -- here's how we're going to fix it." Others are: "Yeah, we know some people don't like that -- but it works as designed. Sorry."
Clear Product Omissions / Clear Culture Omissions. Just like it’s important to not just decide what your product going to do, but also what it is not going to do, it’s important to decide what your culture is intentionally omitting.
Product Use Cases / Culture Use Cases. Just like it’s important to understand what the purpose of your product is -- what’s the “Job To Be Done”, it’s important to understand what job your culture is trying to do. Usually, it’s to help people make better decisions, better serve customers and facilitate long-term growth -- but it’s entirely possible your culture needs to serve other use cases.
Product Feature Pruning / Culture Feature Pruning. Just like it’s occasionally necessary to prune features from your product, it’s also necessary to sometimes prune features from your culture. This could be because adoption is low or the value that “feature” is providing isn’t high enough to warrant its carrying cost (and every feature of a product or culture has a carrying cost).
Technology Debt / Culture Debt. Just like you sometimes take on technology debt in order to get a product out the door (“I know this code is a bit messy and slow, but I can live with it, because the deadline is important -- we’ll come back and refactor it later.”), you will also take on “culture debt”. The most common reason for culture debt is you’ve been desperately trying to hire for a given role, you’ve finally found someone that has the experience and skills you need -- but they’re kind of an arrogant jerk. You hire them anyway. So you’ve just taken on some culture debt. The thing to remember is that culture debt is much more insidious than technology debt. With technology debt, you can cycle back and refactor/rewrite that messy code and hence pay off the debt. With culture debt, like in our example of hiring a “non-fit” person, you can later let that person go, but that doesn’t completely pay off the debt. Having that person on the team has planted some toxicity in your company that’s much harder to weed out.
Product Design / Culture Design. We spend time designing our products so that they’re easy to use and easy for customers to do the thing they’re trying to do. No matter how powerful features matters if the product is so hard, nobody uses those features. Similarly, with culture, you have to design it and manifest it in ways that it’s easy for employees to use the culture.
Shipping Product / Shipping Culture. We all know that no matter how brilliant a product is, it doesn’t create much value if it never ships and customers never get their hands on it. Similarly, your culture needs to have a manifestation of some sort. You have to “release” it. That doesn’t mean you need a deck with 128 slides, like HubSpot has. It also doesn’t mean you have to release it to the whole world on the Internet. But you do have to get the culture out of the founders’/leaders heads and into some set of artifacts that are usable by employees. This need to ship is particularly important as a company scales and not everyone is one degree removed from the founders.
Product Rewrites / Culture Rewrites. This doesn’t always happen -- but it does happen. Sometimes a product winds up so far off track that the best choice is to scrap it and start over. It’s one of those “last resort” type decisions -- but there are cases when that’s the right decision. For a product, it happens when the product is just not serving the needs of customers and a simple iteration or two is not going to fix it. With culture, this happens if things are just so toxic and dysfunctional that leadership has to rethink it. It’s a painful realization -- but when it happens, it’s often very clear (and also very public -- as we’ve seen with some spectacular culture pivots in some high-flying scaleups before).
Remember: Culture debt has a higher interest rate and is more difficult to pay down. Tread carefully.

Examples: Does your culture doc help people make hiring decisions? Does it help determine who should be rewarded/promoted and who should be released? Does it make easy decisions unnecessary (because it’s 100% clear to everyone what the “right” decision is), and does it make hard decisions somewhat easier, by at least setting up some guard rails and constraints?

I'll stop there. There are likely more dots to be connected on why culture is a product -- but I'll leave that to you. Would love to hear what ideas you have in the comments.

Meanwhile, do yourself and your startup a favor and be more intentional about culture in your early years. If I could do HubSpot all over again, one thing I would do differently is that I'd have thought about culture, and made investments in culture sooner.

Building Startup Sales Teams: Tips For Founders

dshah@hubspot.com (Dharmesh Shah) — Tue, 18 May 2021 17:30:00 GMT

First off, just to be clear, I’ve never been a sales person. I’ve never even played a sales person on TV. All the points below have been pulled from startup sales teams that I think work pretty well (including the team at CRM software company, HubSpot).

Building Startup Sales Teams

1. Don’t hire sales people too early. In the early days, the founders should be able to sell (and should be selling). Yes, yes, I know. You're an engineer/designer/whatever. You've never sold anything. Doesn't fit your personality. But here you are. I hate to tell you this, but your life as an "I don't sell things" person is over. You'll be selling *all the time*.

2. You don’t need sales people, you need sales. Don’t think VP of Sales — think “Revenue Engineer”. (Not the greatest analogy, but just like you won’t hire a development “manager” as one of the first 5 people in a startup, you shouldn’t hire a sales “manager” either -- not as your first hire). Don’t get caught up in fancy titles — focus on dollars in the door.

3. Don’t hire several sales people at once. Your goal is to figure out the “pattern” of what kinds of people are best based on what you’re selling and who you’re selling it to. You need some feedback from the system so you can continue to iterate on your hires.

4. If you’ve never hired or been around sales people before, be prepared for a bit of a shock to the system. They’re not bad people, they’re just different from you, especially if you're an introverted geek like me.

5. Resist the temptation to create complicated compensation plans. If it requires a spreadsheet with multiple tabs and lookup functions to figure out the commission, it’s too hard. Don't worry, you'll have plenty of time to confuse yourself and your sales people later. For now, start simple.

6. Agile methodologies can work in sales as well. Iterate! Refine your demo script, your slides, and any other collateral information. Capture the lessons learned by the best-performing people and spread it to the rest. In the early stages of your company, your story and pitch should be getting better every day.

7. Sales people will generally act in mostly rational (but often surprising) ways based on incentives. The rules of the game defines the behavior of the players. Don't say you weren't warned.

8. ALWAYS connect incentives somehow to ultimate customer happiness and success. If you reward just “deals getting done”, you’ll get deals — but at too high a price. You might get push-back that sales people don’t control/influence customer happiness, but they do. They “pick” customers, they set expectations, they control the degree of “convincing” applied.

9. Make sure you understand the economics of your business. Figure out your total COCA (Cost of Customer Acquisition). This includes sales people, marketing people and marketing campaigns. Quick example: Let's say you paid a sales person $10k, a marketing person $10k and you spent $5k on Google AdWords (for a total of $25k) last month. If you sold 10 customers last month, your COCA is about $2,500. Different businesses have different needs in terms of sales vs. marketing spend. Make sure neither is too far out of whack.

10. Your life-time-value (how much revenue you expect to generate per customer) should be higher than your COCA. No, I did not need a degree from MIT to figure that out. Once your LTV is a multiple of your COCA, you’re ready to start turning the knob and scaling the business a bit (hiring more sales people). But, if your LTV is way lower than your COCA, proceed with caution. If there is no hope for LTV getting higher than COCA, you’ve got a problem. Don’t try to hire additional sales people until the economics sort of make sense. If the car is pointed towards a brick wall, hitting the accelerator is not a good idea.

11. Track data maniacally (even if it’s just in a spreadsheet -- but I recommend the HubSpot CRM). Information you will want includes: What was sold, who sold it, when, for how much, etc. This data will be invaluable later as you start to scale. For example, you should be able to answer the question: We had 14 customers cancel last month — who sold those customers? Is there a pattern? In the early days, you likely won’t have the volume (or the time) to analyze the data — but you should at least capture it for future use.

12. Your pricing should be in line with your sales structure. For example, you can’t expect to have an outside salesforce (that meets with customers in person) if your average deal size is only $10,000. The math won’t work. Likewise, if you have an inside sales team, any price point less than $500/month is going to be tricky.

13. Once you get beyond three or so people, running your sales in a spreadsheet will become painful. Start looking at CRM systems (have I mentioned that HubSpot CRM is free?. :)

14. Start watching the shape of your “funnel” as early as possible. Better yet, get ahead of the game and figure out your flywheel. How many leads are you getting a month? How many turn into opportunities? How many of those convert into paying customers? How many of those customers are delighted -- and are now advocates? Once you understand your flywheel, you can slowly start tweaking your system to fix the “leaks”.

That’s all I’ve got for now. For those of you that have built early-stage sales teams, what are your ideas and insights? What lessons have you learned? What tips do you have for those of us (like me) that didn't grow up in sales?