 Good morning, my name is Robin Panumenta. I'm the head of technology at the Telegraph in London And I'm very fortunate to have us to have with us here this morning Brian Halligan the founder of HubSpot A Bostonian and a guy who in many ways I think has kind of lived the startup dream He started HubSpot in 2006 as a class project at MIT Sloan with his business partner And last year I think you had revenues of nearly four hundred million dollars You're a five and a half billion dollar company six billion dollar company and You are undoubtedly Also passionate about what you do. Yes, so much so that you wrote a book Marketing lessons from the Grateful Dead, which is a fantastic title by the way I wanted to start just by talking a little bit about About trust a few days ago. You may have noticed dictionary.com named its word of the year misinformation This is what we in journalism used to call lies And I think a lot has changed since 2006 both online and in the real world politically, socially On social media and a big part of that is you know a kind of a crisis of trust in in institutions the mainstream media In government in companies political parties How does that affect your world and how does a company attract new customers at a time when there's so little trust? Yeah, I agree with you I think the whole world's in a crisis of Trump particularly Americans like threats in government trust and religion Trust in social media firms trust in companies is at an absolute low There's a crisis in trust in the world and how does that affect sales and marketing? I think People trust sales and marketing less than ever There's always been a sort of shaky trust between customers and sales and marketing I think trust is in an all-time low in sales and marketing and that makes it particularly Hard if you're a startup trying to scale in this day and age Because the traditional sales and marketing playbook they just don't seem to work anymore because the trust level is so well So low and I think it's a I think it's a whole new world We're living in and a whole new way to scale your business has to emerge from this really lack of trust in the whole world And just looking at this you know this incredibly dynamic scene here and you know in Helsinki this week We were talking earlier about How you know the startup scene is incredibly vibrant Globally and clearly in in the Nordics You know and partly this is because in many ways it's it's easier than ever to start a business Yeah, access to capital low interest rates access to services like AWS The real challenge is is to actually scale businesses So I just wanted to ask you know as someone who's who's been on that journey and navigated it pretty successfully What's your advice to to people here and to startups? Yeah, it's never been easier to start and it's never been harder to scale It's easy to start like I think of a software company if you're a software startup in the room compared to ten years ago today You've got AWS which is basically on-demand and almost free. You've got open-source software, which is basically free You've got Starbucks or a we work if you've got a little bit of money You basically you need very little capital to start there's tons of angel money and venture capital interest rates are near zero It is a fantastic time to start a company in this startup vibe here at slush seems to be happening all over the world whether you're in Mumbai or Memphis you're seeing this real startup activity now the good part of that is easy to start the bad part is It's very hard to scale. You've got massive competition Head starts in any given industry are quickly You know dissipated away by startups that are right on your tail, and I just think of my little company HubSpot You know we started a long time ago when we started the company There were 14 marketing software companies in the entire planet and today you know how many marketing software companies there are in the planet 6,000 is just a explosion of companies and startups out there So it's never ever been harder to scale And I think there's got to be a whole new approach and a new playbook They're thinking about how to grow these startups that you're all in into big scale ups They go public one day have thousands of employees and partners and and customers and that kind of brings us to Another idea of yours. I know you you like to talk about which is this concept of funnels and flywheels Yeah, you know when you're scaling a business, obviously the kind of You need to think about how to drive your your sales, but but in many ways You know the the the world of sales and marketing has changed a lot over the past ten years Yes, and traditional ways of thinking about it. You know, but increasingly redundant Can you just talk a little bit about that when I was back in business school? I had a really good professor you say, you know, Brian if you want to build a great company today Your product's got to be ten times better than the competition. It's really got to be way better than the competition And I think about that advice is relatively dated at this point. Yes Your product needs to be better than the competition But product advantages are generally short-lived because people can catch up so quickly The new a version of that is your customer experience I think has to be ten times better than your competition in the really interesting companies these days aren't one necessarily with better products But with breakthrough business models break through customer experiences break through go-to-market models and let me give you an example On a typical day when I wake up in Boston, Massachusetts, I want to tell you about my morning routine. I Wake up in the morning on my Casper mattress And have a nice night's sleep and then I go to my bed stand and I put on my Warby Parker glasses and then I take out my phone and I put on Spotify and I listen to the Grateful Dead. I love the Grateful Dead And I dance my way into the bathroom and I shave with my Dollar Shave Club razor And then I put on my trunk club outfit. What do you think of my outfit today? Nice? And then I take an Uber to work What's fascinating to me about my morning routine is all six of those vendors. They're all startups They're all relatively new companies. They are all growing like a weed and they've all completely disrupted the previous Generation of companies in that space and they've done it not by making a better product Uber's cards are the same as everyone else's cars Warby Parker's glasses are the same as whatever glasses yours are really nice Are on it's that the customer experience is better and lighter and more fluid and It's a whole new way to sell and market and I think this starts in B to C and really spreads to B to B So a whole new playbook is emerging for how to grow your startup into a scale up And and what about the the role of the chief executive in this in this kind of new startup world? Has the has the role of the CEO changed and is it is it different to when you start out? I Think it is Things changed a lot. I just think the role of the corporation has changed like I think of this if I'm the corporation And you're a customer Robin The leverage has changed Like for me when I first started out in business like the way you would sell a product in the B2B world was you cold call Into an account a cold call into you you used to have a phone on your desk It didn't have caller ID you might actually pick up your phone Which was really interesting would have a chat and would start down the dance of a sales process And you would ask me for things as the prospect you'd ask me for product specs You'd ask me to talk to my founder you'd ask me for pricing information every time you ask me for something I would get something back and take my pound of flesh and the relationship was asymmetric I had the power over you essentially back in those days and today It's really flipped on its head where you have all the power the buyer has all the power in me the vendor the CEO That's very little power. Do you want to connect to the founder of our company? It connect on LinkedIn you want pricing information? It's on the website if you want product information It's on the website Everything is there and because it's so easy to start a company and because Supply and demand is so out of balance in almost every industry things are really changing and it's become a world Where instead of its buyer beware it's seller beware I'd be very careful about who I sell Almost every industry has moved to subscription base so you can easily cancel Almost every product you buy you can complain about it on Twitter and Facebook and snapchat wherever you want to complain G2 crowd the leverage has really shifts in the world in the CEO's role has really changed as a result of that And your go-to-market has to change to reflect those realities And I think another another area where we're seeing a lot of change particularly at the moment is with employees Yes, and recently we've seen a kind of big rise in in employee activism if you look at you know some other big Silicon Valley companies Google etc. And why is that happening and where do you where do you see it ending? I? Think it's quite similar the relationship between Myself the company and let's say you're the employee That's also changed a lot there used to be kind of a wall between the company and the employee and that wall is knocked down and in today's day and age a Couple things are happening when the internet knocks that wall down to the supply and demand is way off like in Boston For example in the tech economy Unemployment raise effectively zero and so you as an employee can choose from any number of thousands of potential great Workplaces in Boston or around the world so the supply and demand is way off there And I just think there's a lack of trust between employees and companies they don't trust like I said they don't trust governments They don't trust anybody they certainly don't trust their employer And so you're starting to see this play out in real life with what's going on with Google is very interesting where? Employees are far more aggressive employees are speaking out employees are really shaking things up And I think that's the very beginning of it because trust continues to fall that supply and demand continues to fall Because of all these macroeconomic forces so as a CEO running a company the worst thing you can do is fight these trends You have to embrace the fact that actually your customers have a lot more power over you than ever your employees actually have a lot more power You over you than ever so you have to behave in a new and interesting and different way And I think you're seeing that kind of play out wow these are really And I think you're starting to see that play out like The new CEOs that seem to be doing well this too I like a lot who I'm trying to a little bit model frankly my behavior on is Satya Nadella the CEO of Microsoft and Dara The CEO of uber they're they're not founder CEOs. They're newly hired CEOs. They're real adults They're very transparent, but they're transparent to their customers and their employees They don't spend a lot of time talking to the press. They don't spend a lot of time beating their chest They're very reasonable down-to-earth people who engender trust and I think the world is changing that way And I think that role of the CEO is going to continue to evolve and I think we're gonna have more CEOs that look like Satya and Dara Okay You've built quite a distinctive kind of culture at our spot And I wanted to ask you a little bit about that I mean so much so in fact you actually got burned a little bit by a book by Dan Lyons a couple of years ago Why is investing in that culture important, and you know, what does it mean to you? Yes? I Sort of think about most companies they spend a lot of time on their product. Let's say you're selling this water ball It's nice water ball You spend a lot of time in your company thinking about how do I build a great product? How do we make it unique relative to the competition? And work and work and work I'm making the best product as unique and as compelling a value prop for that product to attract customers I Think in today's day and age you need to think about your culture in a very very similar way You need your culture to be great in some ways not always But in some ways and be valuable to a certain part of the population in really really compelling and unique Relative to the competition so we're hiring engineers in Boston every engineer We hire we're competing with Google and Facebook and a million startups So how do we make our value prop unique and really resonate with people and what we did? Which is largely work buds backfired in some ways is we built something called a culture code Which is a 128 slide deck it takes about 10 minutes to go through which really outlines How we feel about the relationship between our company and our employees and how we think about our value prop to employees and how the employee Company relationship really works and that's been quite interesting It's been a magnet that pulls employees in it's made us unique relative to the competition as far as that's gone And it's been very powerful So I think almost all companies out there if you want to go from startup to scale up you're gonna have to hire like crazy I mean we've got 2600 employees You just got to hire you're always hiring constantly hiring We're hiring hundreds and hundreds of employees a year and you got to hire the best employees You can almost every industry is all about the employees And so you got to be very thoughtful and conscious about your culture make it unique from the competition And you got to kind of write it down and use it as a magnet to pull people in and hopefully repel people that you don't want and We've talked a lot about that the sort of culture of startups is there a kind of Single most important lesson that you've learned In your journey since starting a company in 2006 that you wish you'd learned earlier on or that you wish you'd known when you set out Yeah, one thing about the culture that we learned the hard way is When we started our company we hired lots and lots of people who were classmates of ours at MIT and I think something like 18 of our first 20 people were classmates of ours and They looked like us and sounded like us And by the time we hit a hundred employees We had a lot of people that looked alike and sounded alike and then And then it becomes hard to attract people who don't look like you and sound like you and think like you and we waited way Too long to sort of wake up to the fact that well You make better decisions and you build a better more inclusive company and you would track more talent By being far more diverse so late I would say way late in our life and my life as a CEO and I wake up to the benefits of having a fully divorced Diverse workforce along every level and we're much more diverse now like I look at HubSpot today and Three of our board members are women three of our C-level executives are women 41% of our employees are women 42% of our Managers are women and so we're getting a much better shape and working on it I just think we're a better company more attractive to work out we make better decisions and It's something I wish I did much much earlier actually in our life because it's hard to catch up What happens is get a hundred employees They all sound alike and look alike and you're you're a great black woman that we want to hire You come an interview and your slate of interviewees doesn't look or sound or feel like you That's a hard. That's a hard road to hope to convince that person So that's been hard work and it's paid off, but we woke up late on that And I wanted to ask you a little bit more about the kind of you know Obviously, there's a big difference between running a setting up a business being an entrepreneur And then making the transition to a big listed company with you know road shows and you know It's a pesky journalists and all the rest of it. What are the how did you find that transition? You know, do you like it? I mean or have you found it difficult? Yeah, here's how I think about moving from private to public When your private company you've got a bunch of venture capitalists on your board that own your company for most part They're all quirky and they're all somewhat misaligned from you And then you flip to being a public company and you've got a new set of investors fidelity and whatnot and They're all quirky and somewhat misaligned from you They're misaligned in slightly different ways, but they're misaligned and they're both fine. They both add value in certain ways They're both rational and reasonable folks. The tricky part is when you have both at the same time when you go public We're kind of through that all the private money's out and it's only public money But I think the public markets get a bad rap in fact all my entrepreneur friends say you're crazy to go public stay private As long as you can I kind of like it, you know I spend about two days a quarter Dealing with the public markets and investors which is about the same I dealt with when we were private a lot of the overhead that you have to do to list publicly and the Sarbanes oxley requirements and all that stuff people complain about it But it's actually kind of good clean living at stuff you should do anyway Maybe did it a little earlier than you would have And it prevents you from making mistakes and it protects your customers and your data and stuff like that So I overall I think going public is a good thing And I think 2019 will be an interesting year when uber probably goes public air B&B Slack some of these great United States institutions will go public. I encourage it. I applaud it And I think the CEOs will will like it better than they think yeah, and I guess I just wanted to talk a little bit about the future the future of of tech You know There's so much change right now and you know really invigorating to be in this environment Not just because it's traditionally invigorating in Helsinki in early December But what are your predictions for for 2019? What are the big themes that you see emerging? Okay, one of the things that we love that I like about Helsinki is the first night I got here I Met my new friend Robin and we had a drink together at this restaurant in this restaurant We went to had a sauna And so we went we took a hot sauna, and then we dove in the sea very cold by the way We came out of the sea we took a smoky sauna dove in the sea and took another sauna You guys have very unusual traditions here in Finland, but very nice traditions. I forgot your question That's how I got to know Robin in in the bear in what's this the Baltic Sea I got to know him in the Baltic Sea in December right and your predictions For 2019 yeah Well, I think this relationship between the customer and the Between the company and the customer I think leverage continues to shift that the customers get more and more and more leverage I think more you see to you know a year ago two years ago You would buy something online for a hundred dollars. You're like, okay I'll put my credit card out there and buy something for a hundred dollars I bought a car recently for $80,000 and I bought the whole thing online didn't even test drive it I just think more and more things you buy you're going to buy online more and more of the information you need You're gonna buy online More and more of what you're gonna do is gonna be automated. We do an interesting test at my company We let people come to our website and we have a chat pane on our website and you can chat and during the day You chat with a human and at night we we program a bot in your chat with a bot Ironically what we see in the data is people would rather chat and are more chatty with the bot than they are with a human And so I think there'll be more automation and that automation will be good for for companies and employees I think this trend of Automation in self-service is here to stay Millennials shopping buy in a whole new way and Businesses need to transform their go-to-markets to match the way Millennials actually buy stuff today For example, I'll give you another example like traditionally if you've got a problem with your products You would call the hotline and a and a vendor you wait on hold forever You talk to somebody they wouldn't have the answer that transfer you you'd redescribe the problem You'd hold online forever Transfer you and finally you might get an answer after you know a day and a half of this That's just not how people expect things to be done today They expect to be able to go go to Google and get your answer you'll go to your website chat with a human or a bot and get The answer worst case pick up the phone and talk to a human work through the answer So I think this that the taking the friction out of the sales and marketing process creating more delightful end-to-end Customer experiences. I think that's here to say I think the leverage the loss of leverage by companies Relative to their customers is going to continue and that'll be good for everyone because everything every product I think over time and every service the quality will be improved because the competition is so much higher It's actually a very interesting time to be a buyer Well Brian it looks to me like we're pretty much out of time there But I just wanted to thank you on behalf of everyone here and you know best of luck for the future. Okay. Thank you very much Thanks everybody. Thank you