In this week’s episode of the Breakout Growth Podcast, brought to you by Rise with SAP, Ethan Garr and Sean Ellis speak with Kieran Flanagan, Hubspot’s Senior Vice President of Marketing to learn what’s driving Hubspot’s unstoppable growth.




We discussed:

  • Hubspot’s evolution into a modern-day CRM built for the internet (03:12)
  • From “inbound marketing” to “inbound media:” why Hubspot is betting on building a true media organization to power growth (06:50)
  • Organizing for growth as a large organization: With more than a billion dollars in ARR, Hubspot’s marketing team must think on a much bigger scale to source demand (08:28)
  • The changing world of content consumption and “community” as the next big thing (08:03)
  • Hubspot’s shift from its original “Weekly Active Teams” North Star Metric (15:30)
  • Inbound marketing, Freemium, and other pivotal moments in the growth journey (18:30)
  • Why B2C scale in B2B companies is exciting (22:13)
  • Taking bigger risks with a willingness to fail (27:45)
  • Start with the endpoint, reverse engineer, define the playbook, and sweat the details (31:50)
  • What smaller companies can learn about building a culture of accountability and risk-taking (32:40)
  • Historical context can power better experiments (38:00)

And much, much, more . . .

With more than 100,000 customers and over $1 billion in ARR, Hubspot is simply on fire.

Kieran has been a growth leader at the company for nearly ten years. During that time the business has gone through massive changes. From its giant bet on Freemium to a more recent shift from inbound marketing to inbound media, the company has continuously reinvented itself in its quest to become the #1 CRM for scaling businesses.

However, despite Hubspot’s enormous scale and $37 billion valuation (at the time of recording), the insights and learnings from this discussion relate to businesses both large and small. Yes, at this size, Kieran does explain that he and his team have to focus on big bets because small optimizations just won’t have enough impact, but his framework for making smart decisions, taking risks, and building a culture where innovation can thrive is applicable for any company looking to drive breakout growth success.

Kieran is also forthcoming about the moments when he felt stuck trying to tackle specific problems. The strategies he employed to overcome these challenges offer practical lessons to help listeners see their way forward when they encounter roadblocks to growth. 

Before you jump into the episode, we encourage you to learn more about RISE with SAP S/4Hana Cloud. If you have ambitious goals, SAP is the technology partner you need to scale and drive innovation. Instead of relying on stitched together solutions to manage business finances, operations, and customer relations, leverage the flexibility of SAP’s cloud-based ERP solution to gain the insights that will help drive your breakout growth success. 

Thanks for tuning in to this episode with Kieran Flanagan, Hubspot’s Senior Vice President of Marketing, and please share the Breakout Growth Podcast with your colleagues and friends.  

 

EpisodeTranscript:

Introduction: 00:00:08 Welcome to the breakout growth podcast, where Sean Ellis and Ethan
Gar interview leaders from the world’s fastest growing companies to get to the heart of what’s
really driving their growth. And now here are your hosts, Sean Ellis, and Ethan God
Sean Ellis 00:00:29 In this week’s episode of the breakout growth podcast, Ethan Gar and I
interviewed Kieran Flanagan husband, senior vice president of marketing with more than a
hundred thousand customers. And now over $1 billion in ARR HubSpot’s breakout growth,
success is nothing short of meteoric. I’m sure most of our listeners are very familiar with
HubSpot, which is now the number one CRM platform for scaling businesses. So Ethan, what
stood out for you from this conversation?
Ethan Garr 00:00:54 It’s hard to even know where to begin. Sean, what stood out most to me
is just how relatable Kieran Flanagan made this conversation for businesses, large and small at HubSpot
scale, he explained that they can no longer rely on incremental experiments that just won’t move
the needle. When you’re a $37 billion entity, like they are yet, he was able to provide a
framework for decision-making that I think anyone in our audience can appreciate.
Sean Ellis 00:01:14 Yeah, the fact that he’s been with HubSpot for nearly 10 years, and that
he’s been a part of their many evolutions that have included the move to freemium and the move
from inbound marketing to what he describes as inbound media really gives him great
perspective. He’s just generally a really good guy to chat about growth with.
Ethan Garr 00:01:33 Yeah. He just seems like a really nice guy. And by the way, did you catch
his comment that he believes that community is the future for HubSpot?
Sean Ellis 00:01:40 I did. And considering we just spoke with mark tan at wise about
community led growth. In our last episode, it’s clear that this is a theme that is taking hold
throughout the growth community.
Ethan Garr 00:01:51 It sure is companies that embrace their communities are destined to win
well, Sean, we actually have some big news. Do you think it’s time to share it? It,
Sean Ellis 00:01:58 It is. So before we jump in with our guests, we are thrilled to welcome
our first sponsor of the breakout growth podcast. This week’s episode is brought to you by rise
with SAP S four HANA cloud hyper-growth companies get up and running quickly with this low
cost, easy to implement cloud ERP solution. If you are working to power breakout growth
success in your business, please check out sap.com/hydro
Ethan Garr 00:02:26 That’s right. We are super excited to be partnering with SAP, just an
amazing company. And thanks to all of you. Our listeners, the breakout growth podcast has
grown into one of the most trusted podcasts in our space. If you have a moment, please tap the
subscribe button wherever you listen. And if you can, please also let your friends and growth
know about the podcast. Sean, should we jump in with Kieran Flanagan?
Sean Ellis 00:02:45 All right, let’s do it. Hi, Kieran Flanagan. Welcome to the breakout growth podcast.
Kieran Flanagan 00:02:59 Hey, thanks For having me. I’m excited to be on.
Sean Ellis 00:03:01 Yeah, we’re definitely excited to have you on HubSpot is a company we
both followed for a really long time and excited to share more details of the story for a lot of our
listeners also joined by my cohost. Do you think our welcome Ethan?
Ethan Garr 00:03:15 Hey Sean, and thanks for coming here, Kieran Flanagan, we’re really excited to
Kieran Flanagan 00:03:17 Speak to you. Yeah, absolutely.
Sean Ellis 00:03:20 So as I, as I mentioned, probably a lot of our listeners are very familiar
with HubSpot, but in case someone’s been living under a rock for the last five years, how would
you generally describe like,
Kieran Flanagan 00:03:31 Yeah, I’ll give you the, the brown line with the brown team will be very
happy, which is the number one CRM for scaling companies. It’s really front office for companies
who want to grow, be differentiated. We give tools across marketing sales, customer success,
ops operations, and a kind of modern day CRM built for the internet. Yeah.
Sean Ellis 00:03:51 And so you’ve been there a pretty long time. And I, I know in the, in the
early days when people asked me about HubSpot, I couldn’t describe it at all. It’s obviously
move more in that direction of CRM. Have you found that it becomes easier to describe wh —
— at HubSpot is safety in recent years versus the earlier
Kieran Flanagan 00:04:11 I feel like HubSpot, you would used to, you used to describe it as a
methodology because the methodology was better than the product, and I’m sure the product
team within wouldn’t mind me saying that back in a way we really just had a point solution for
helping you do kind of inbound marketing and blogging and SEO. I think a and the other interesting thing is all your methods. If you win, and if you’re a category creation and you haven’t
methodology, if you win in that space than anything, transformational just becomes best practice.
Right? So in that market, isn’t that differentiated. And for us, what differentiates differentiates us
today is really that product. So the inbound methodology still is how we would run the entire
business. We call it the flywheel now, but I think a product is just so much more robust, so much
more better that yeah. Describing it as like a CRM people kind of know what that is. It does
mean that you’re in a kind of space where it’s harder to be differentiated or was easier to be
differentiated and inviting than that. But I still think the way we do that is because the product is
just so good. Yeah.
Ethan Garr 00:05:05 I think when I read, you’ve been at the company for, I think more than 10
years now, and you’ve had a bunch of different roles, but from marketing and growth, how has
the company for you changed over that time? And like what’s kept you excited and really
interesting.
Kieran Flanagan 00:05:18 Yeah. Before I joined hostel, I used to, like, I think that longest I was at the company was 18 months and they used to always look at people who are in companies 10 years. And they used to be in a company 10 years. That’s that’s wild. And then this year,
particularly because it actually is I’m in nine years, but I’ll be 10 years at the end. But I think with
10 years in January, but this has been the year where everyone’s like, oh yeah, you’ve been in
the company for a long time. I’m like, oh my God, like, I’m one of those people where everyone
goes, you viewed the company a long time. So why am I still here? I think I’ve been really
fortunate that my kind of mission has changed every kind of two to two and a half years because the HubSpot has grown so rapidly when I joined, I think it may was maybe three to 400
employees and now it’s 10 times the size.
Kieran Flanagan 00:05:59 And so I joined Gregg international business. I was very fortunate.
There’s not like huge opportunities to do these kinds of roles when you’re based in Dublin, you
usually have to be in a really great city and the states. And so I, I joined to grow at the
international business that went really well. And then they kind of came to me, the founders and
J and JD, who was the CEO at the time. I said, Hey, we’re going to pivot the business to be
more kind of product led. And do you want to take on the market and the growth side of things.
And I moved to Boston and I couldn’t move to Boston and they let me do it from and to try and
do it remotely. And this was back in the days when my first conversation with my new team that I took on what’s, you’re like go to go to meet and they can see anyone in the audio is terrible and working remotely was really horrible.
Kieran Flanagan 00:06:40 And then I did that for two and a half years. I went then to fix all of our, kind of take a role, the customer accident teams and rebuild how we did acquisition, because that’s a big part of how hotspot grows. And then today I have a kind of different mission. I still have those ones, but we bought a media company this year, uh, the hustle, a really great company and kind of working with that team and others to build out a true like media org within HubSpot on that’s something that we have, we’ve always had big belief around, but we try to be more ambitious.
Sean Ellis 00:07:06 Yeah. And that sounds like a, kind of the inbound marketing ideas, all
about like cut content or a large, large part of it about kind of onboarding people through value
add. And so it makes sense that you guys would buy a, a media company
 
Kieran Flanagan 00:07:21 And then media, that’s the thing that I have transitioned in my marketing to invent media. So that’s the next thing that I’m excited about.
Sean Ellis 00:07:28 Cool. You know, so I, I actually got into HubSpot kind of accidentally, but
because I was an advisor to David cancels performable before it got acquired by HubSpot. Yeah. So I was, um, I, you know, I, I was suddenly like, I knew Dharmesh already at that point, so founder Dharmesh, and, and, but I, it was kinda, kinda neat to sort of stumble into the back door and get into the like kind of pre IPO HubSpot and, and follow it along. But yeah, I mean, I think even, even for a lot of that time, it was, it was still pretty hard for me to explain, but I think I finally got my head around it.
Kieran Flanagan 00:08:06 Yeah. Yeah. The number one CRM for scaling companies. I think that
one is the one that really,
Sean Ellis 00:08:11 Yeah, absolutely. So in your, you know, as you mentioned, you’ve,
you’ve kind of gone through different different roles while you’ve been there and, and at different
opportunities have emerged and probably challenges in your SVP marketing role. So how do
you view that in the context of growth, what impact do you make on growth and your teams
versus, you know, who else in the organization is focused on growth?
Kieran Flanagan 00:08:34 Yeah. So HubSpot is a really large company, a nice, so growth is really like we have a, a flywheel org that really owns all the, like the go to market motion. And the flywheel org is all marketing sales, customer success and product outside of that. And then
there’s a product growth team that owns the kind of product lead metrics within the app. And so I can talk about it as well, what it was like in the early days, trying to like build out that first product led motion, but that how I kind of drive growth for the business today is one of the things that’s unique about HubSpot. So we reached a billion dollars in AR this year, the kind of unique thing about HubSpot, which is why I still love being there as a marketer is, um, most of our revenue comes from a demand source by mark.
Kieran Flanagan 00:09:16 The marketing team writes in the marketing, we’re on the hook for refu, and you have to do pretty large scale thinking to get to that size in revenue from mark and
source demand. And so I have a group that drive all of the demand, whether that’s the leads or
the users, or all the different things, where we turn those into, into customers, building out this
media org, the media, or we really believe is how do we be an ever-present part of our
customer’s life belonged before they become a customer of our, of our product. And so if you
think about it, when we build that in by market, and it was really on the premise that the internet
kind of blew up and everyone became kind of how to content became democratized, right? We
went online to try to solve our own problems. And that meant that B2B companies could build
out these content programs and be present when people had problems, right.
Kieran Flanagan 00:10:00 They could be a trusted source of content when those people were
online, searching for problems. The cool thing about media is you can become a trusted source
of information all the time, right? People aren’t just living on blogs, people aren’t just using the
internet to search for things they’re like in podcasts that you’re in use that are there in all of these different mediums. And so I think about that transition from inbound marketing to inbound media as being, oh, I used to be present and the trusted source of information when you had a
problem. And now I’m part of your daily consumption habits and content consumption. Digital
content consumption actually grew by four X during 2020. Like it’s just part and parcel of how
really high we’re kind of starting to live our lives on the internet. And then I have another group
and I’m really excited about this.
Kieran Flanagan 00:10:41 It’s our academy, our credentials, our community. I think community is
really at the core of HubSpot’s future. And then we’ve just launched this network. How HubSpot
network is that the very early minimum viable stage. If you go to network of hustle.com, you can
go clean your profile, go do that. And that’s really all around how we drive customer success,
because we just have a lot of customers I can pause. They’re happy to go back to like what it
was like when we first start to, to try to back into product labs and try to build out that growth
function. Yeah. I think that’d be great. Yeah. Yeah. So HubSpot is like, like you’ve probably seen
this a lot. Sean. You’ve probably seen companies who have been product bed first. Like
HubSpot was actually kind of interesting because we were not product led first, ri —
— ght? We were a company that generated a bunch of leads, turn those into QRS customers.
Kieran Flanagan 00:11:29 And so we backed into product led. And one of the things that was really I went into that was like drew. I remember drew not my first map. And I was like, oh, well the product, that stuff as much, it’s the same kind of funnel, right? You just generate a users, youturn them into PQRS instead of MQL. And then you generate revenue and it gets not the same. It’s very, very different. And the way teams work together is very different. And the way teams need to be designed is very different. So really that first year for us was we had a kind of market and I own the users. PQL some of the touches revenue. We had a product
Sean Ellis 00:12:04 Team. Can you explain what PQL is for anyone who has a
Kieran Flanagan 00:12:07 Product qualified leads? So basically PQL for us was when you go, you could go into the app and some of the features were gated. Some of them are triggered based on usage, so you could have certain amount of usage and then it would trigger this modal within the app and say, Hey, reach out to the sales team or upgrade, touch, see to do that. And so for us, then we just call all of that. Hand-raisers like that you’ve showed some intent, you’ve taken an action to show that you want to talk about buying this product. We had another thing that we used to do, which is kind of, I can’t remember the acronym we use kind of like a PQL when you would do all the actions within the product, that would suggest we were a good fit, but you wouldn’t click on the modal and want to reach out to the sales team, but we would still test to rotate those to the sales hen.
Kieran Flanagan 00:12:47 Yeah, I think in that, so in the early days, we really, I think we probably changed the team structure several times in that first year. That was really the, one of the things that was most surprising to me is when you’re in a marketing and sales, that business, you have like marketing and sales working together and go to market motion. When you’re at a product lead, you have marketing and sales, product engineer and customer success. You have much more teams working in that go to market motion. And that those lines of like who owns SWAT became a lot more blurry. It took us a long time to like, figure that part. I
Sean Ellis 00:13:17 It’s interesting. It just, just real quick on that, just follow up on that very
last part. When the lines blur on who owns what, like that’s also a sign of, of something that’s
potentially good. It’s kind of like, you’re maybe becoming less siloed. How do you balance
between those two where, you know, it’s like, okay, it’s a good thing because it’s becoming less
siloed. And it’s a, maybe a challenge because, because that, that clear ownership isn’t there.
Kieran Flanagan 00:13:43 I went to this kind of like a, I wouldn’t call it self-help, but I used to be in this thing called neuro-linguistic program. It’s like this kind of cult, but it kinda, how do you re re I’m going somewhere with this? How do you, like we frame the way you think about problems, but there is a cult aspect to it, which I did not know until I went to the first conference and that’s a whole other, a whole other story, but one of the lines they use, which I really love is like, before your biggest breakthroughs, you’re, you’re at your biggest point of confusion. You’re at your most confused, right? You’re at your most confused, you should embrace that. Cause you were actually about to have your biggest breakthrough. You’re letting
Sean Ellis 00:14:15 Go of your clarity
Kieran Flanagan 00:14:17 And that’s sincere point. Like, that’s kind of what you said when you
you’re in it. It doesn’t feel like that. It just feels like everyone’s fighting with each other, but you
are starting to have these moments of clarity where like, oh, well actually the way we should do
this, it should, we should have a Potter on this metric, like this, not like at this kind of T T
structure silo, Marvin owned this. And then we had across the sales and then they own that and
product on this. You can actually create these cross-functional pods to own metrics and just
ensure that you have to correct skills. And then those pods. And I think that was one of the
things that one of our big breakthroughs is we just work far better with product. Now we’re able
to like figure out how tackle large product problems together, and you have– much more teams working more in a collaborative fact fashion. And the other thing that’s super interesting is everyone starts to talk about the business in the same way, right? It starts to bring uniformity of language across the business. And so when everyone is kind of involved in the core, go to market motion, and there’s like clarity of like these teams working together on these different metrics, you start to speak the same language of growth. I think that is actually something you wouldn’t expect to have a huge impact on your success, but it really does
Ethan Garr 00:15:22 Actually. I really want to ask you about the cult. Cause that sounds
fascinating, but we probably skip that for right now,
Ethan Garr 00:15:30 Following up on that, like, you know, you’re really talking about sort of
how you manage extremely large teams and how that works well. And the pod structure is
something I’ve been part of and also heard a lot of in the really emerging in the last last few
years as being a key way that companies are able to successfully lead across large
organizations collaboratively. I’m curious, you know, Sean and I are always talking about
company’s north star metrics, and I know that HubSpot’s north star metric, at least it used to be
weekly active teams. And I’m wondering a, is that still current? And B, is that still, is that part an
important piece of managing that collaborative structure?
Kieran Flanagan 00:16:04 So when we, when we first launched, it was weekly active teams. We, again, when we launched the product led business to free business, we were a separate
business from the core business. We were almost like a startup. And so we have no users. We
had, we had nothing like we had a smaller budget. And so we were really obsessed about how
do we drive with the active users and then PQL. And, but that weekly active user was our north
star metric. HubSpot is just such a much more complex business. Now, when we merged the
product, that business to the core business, we have like two different kind of go to markets
where you can become a lead. You’re going to user, uh, when you become a user, there’s just so much more metrics to actually look at. So that the product, the product road team still do look at which you have to teams. I think there’s a multitude of north star metrics that we look at versus like a singular one. But that was the thing that we obsessed over in the first two years,
Sean Ellis 00:16:52 Kind of a north star galaxy or something,
Kieran Flanagan 00:16:57 And north star university. You want to see one of the data dashboards that I look at nice. Like it’s like the matrix of this like metrics coming down from beyond.
Sean Ellis 00:17:07 Yeah. So it’s interesting as you touch on kind of the evolution and going
to product led and then kind of evolving to where product let’s, maybe just a component. I know
for me, there was a snapshot along the way where just as I mentioned, I was confused by
HubSpot for a long time. And then, and then one day, you know, I tell you, I had had stock
through the IPO, sold the stock and did well with it as you do, usually when you have pre IPO
stock. But then one day I was, I was looking at HubSpot and I literally said, oh my God, I see
how this is coming together. This is amazing. Particularly when I saw how you had really moved
to almost everything that you were doing, there was a free component of it, not just a watered
down crappy free component, but actually a really good free CRM that was not just like, oh,
we’re going to, we’re going to do a light version of Salesforce and give it away for free.
Sean Ellis 00:18:06 But it was, it was actually like better in a lot of ways because it was
automated as your, as your have contacts in email it’s, it’s writing in and building out context and
building out history. And I remember I saw that and I said, oh my God, I think this is amazing.
And so when I made my, my biggest public market stock purchase in a long time, I sent a note to Nash and, uh, I still, I looked it up yesterday. That was November, 2017. And I was like,
Dharmesh, I just got really excited about what you guys are doing. Good, bought some stock
again. And, uh, we’re about a thousand percent up since
Kieran Flanagan 00:18:46 You’re happy this week then with the payments. And then it’s really the market. Love that an incident.
Sean Ellis 00:18:51 Yeah. I wish I could say that I’ve held all the way through, but I wrote it in quite a bit and it got to the point where like, oh, I couldn’t possibly go up from here.
Kieran Flanagan 00:19:00 I don’t think anyone, anyone could hold hold. Uh, I think anyone could hold for that long,
Sean Ellis 00:19:05 Probably more important thing to me was sort of saying, okay, this, this
seems to be an interesting transition point in the business that it went into a kind of hyper-growth mode. And so I’m curious from, from your perspective, how important was freemium in driving a lot of that stock appreciation or what you were doing with freemium or is that just one of the many components of what’s been important? The success of,
Kieran Flanagan 00:19:33 So I think it was one of them, for sure. I think there’s like some pivotal
moments in a company. Like if you think about a company, the companies who make it to a
billion dollars in revenue, it’s kind of rarefied air. It’s not like the most, it’s not common. I think
what I’m from being in that journey for, for some wild, from some time though, there’s like a
couple of bets and if you get them right, then you just are able to get weighted, leverage on
them. The freemium bet to us is not too dissimilar from like the inbound bat, because it’s all in
that to changes in the way that people want to buy products. And so if you think about inbound
marketing, it was really kind of bottoms up content. It was like, okay, well, you don’t need to just
get the decision maker in board.
Kieran Flanagan 00:20:12 If you actually consume, if you actually build a brand around all these
people who will eventually use the product, they’ll have outweighed impact on getting people to
buy the product, then the company, right. Just bottoms up company instead of going after
decision makers. And that’s why back some years ago, most B2B brands where it didn’t really
have like large audiences because they just marketed content to decision makers, way less
decision makers. And there are people who use the product to freedom. So somewhat the
natural evolution of that, right? And that we acquire all the people through content that can use
our product. They love your brand. They’re getting an education, but they can’t do anything
because you have to still go to the person in your company, say, please come and use this, give
us budget. Well, if you have a free product, now you can start to monetize all those people onto
the product and do the land and expand.
Kieran Flanagan 00:20:52 And I think people over time just don’t want to talk to other people. They want to be able to come in, have a fish in this experience to be able to buy the product, be able to get value from it before they ever decide to upgrade and buy my, buy my product. And I think that’s the thing, the founders of HubSpot. I think that what they’re really good at is trying to
obsess over how customers want to buy products in the future and how they want to use
products in the future. And that was the bet is like, we think the way that people are going to
want to consume software and buy software, I’m a lot more like B to C than it does B to B. Yeah,
Sean Ellis 00:21:20 It’s interesting. Cause I actually, I look at freemium as actually pretty
similar to content marketing in the sense that you content is, is actually kind of a pain in the ass
to keep creating. It’s not, it’s not, it’s not to say that it’s like, you know, some people really enjoy
that. Like we’re, we’re creating content right now. I enjoy this process, but it’s time consuming.
And I think what’s interesting about freemium is that you essentially, you know, software is
content in a sense it’s, as you’re creating IP and you’re creating experiences that are building
that trust and that foundation much in the same way that content does, but it’s just a little bit
more scalable. It’s it’s in, in something where the person in engaging with it or multiple people
engaging with it are getting value and they can kind of continue to create their own value as
opposed to a big content machine that needs to keep feeding them content. So it’s interesting
how,
 
Kieran Flanagan 00:22:17 And then you see ’em and now you see B2B companies that look a lot more like B to C companies in terms of their scale, like loom has 12 million users Calendly has something like three, 5 million, three to 5 million users. Like you just see these kind of B2B
companies who have like real kind of B2C scale. And I think the interesting thing around that is
like, it helps you to attract talent from the BC world. So actually B2B market and B2B growth get a lot better. It starts to make B2B much more excited. Like I think it makes it like a lot, a lot more
exciting to be in.
Sean Ellis 00:22:47 I was actually on the board of directors of a company that started in B to
C B to B, but they’re not B to C, but like really, really low, low average price B to B with a
freemium offering. And they just kept getting pulled up market up market up market until there
were like multi-million dollar deals coming in. And I was on the board for five years. And, and I
have to tell you that when they, when they got Lego, eventually I was just like, oh my gosh, I do
not like enterprise, like you’re hiring sales people. It takes a long time for them to get up to
speed. You got churn of salespeople that you need to start worrying about where you just have a much more sort of scalable engine when it’s being fed from a kind of product led approach to it.
Kieran Flanagan 00:23:42 Yeah. I want, I want to actually follow up on that because
Ethan Garr 00:23:45 One thing that seems like HubSpot’s been really disciplined in targeting
and staying focused on that small and medium SMBs that market and not really working,
pushing to go up market. Is that something that, you know, there’s been a lot of pressure for you, for you and your teams to do? Or is it something that just it’s natural, like this flywheel works, we’re going to keep it. 
Kieran Flanagan 00:24:04 So I would say we have gone up market, but probably not as overtly as you see other SAS brands, what happened to HubSpot and probably happens is a lot of companies is if you do what your, you say your product will do, you’re going to have a natural pull to go up market, or all your customers who are successful in your platform will churn because you have customers on your platform and their needs become more sophisticated because now you’re making them more successful. And so you naturally do get dragged up market. I think that, I think the question is, can you get dragged up market? What I lose in your contact with SMB and mid-market and to Sean’s point earlier, what we’re doing is pushing an incredible amount of value down into free, right? Because we don’t want to just go up market and say, well, we’re not interested in the SMB in the mid-market space.
Kieran Flanagan 00:24:46 We want to have like the full breadth of companies who can start on a platform when you’re a one to five person team and get a lot of value from free and then grow all the way to our thighs in person team, where we’re at 4,000 person team or whatever the number is. And we use HubSpot, right? And so we want to be able to grow with, with you and as you become successful and your customers should become more successful by investing in you, then you naturally start to have to build for moisture. Skin needs.
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Ethan Garr 00:26:15 You will lose your customers if you don’t adapt to their growing needs
over time. It’s and it’s interesting how focusing on, and I don’t think, you know, using B2C tactics
necessarily pulls you away from that over time. I think it, you have to get good at using both. And It’s funny because a while back now, Sean and I, co-wrote an article called the new B2B growth playbook. And one of the things we realized about the fastest growing B2B companies is that they were all borrowing concepts from the world B to C, but they weren’t doing it at the expense of, you know, building those higher end relationships. 
Kieran Flanagan 00:26:43 Yeah. Yep. B to B to C to B.
Sean Ellis 00:26:51 So yeah, clearly like most of what we’ve covered up to this point has
been the incredible success story of HubSpot. And I’m sure we could, uh, position everything as
it’s just been like sunshine and flowers all the way through, but I, I know you don’t, you don’t get
to that success without challenges along the way. And so I think particularly for listeners that,
you know, when they, when they run into those challenges for me, I, I always, I tell my kids, this
they’re both in college now. And I like the difference between successful people and
unsuccessful people is that successful people come up against challenges all the time that are
super legitimate excuses for failure. Like everyone will say, oh my God, of course you couldn’t
have succeeded. You hit that. But the successful people say I’m going to succeed anyway. And
they find a way to work around those challenges and succeed anyway. So looking at companies, I think there’s, there’s something to that on a company level as well. And so as you look back over your time at HubSpot, has there been a time where you, where you felt stuck, where you felt like you were up against a challenge that seemed almost insurmountable? And if yes, how did, how did you overcome that?
Kieran Flanagan 00:27:59 There’s actually three that come to mind. The first was actually when we start to build that product led motion, like I actually didn’t really know how, like, I didn’t know how it was going to succeed as in acquire. And for users was somewhat new to me, CRM is pretty saturated market. I actually came from Salesforce. So I know that market I went into, I told you about the team design, like the team design was all quite new in terms of how you, how you did that, that one specifically. I think that one that I spent so much time talking to others, like, I’ve always thought it’s just really simple teaching of how you get better is like go talk to people who are better than you. I just don’t know why people don’t like lean into that. It’s actually, the only reason I started my podcast is it to get a reason to go talk to people and learn from them.
Kieran Flanagan 00:28:44 And so that’s one now the second thing, that’s a little bit more practical and they use this for this problem. And I used it for another problem. When we actually, again,coming back to something I said earlier, the business is quite dependent upon the fact that we don’t want to continue to, to grow or acquisition. And we get more people coming in through education and stuff and things like that. And we have had periods when you get to our scale, there, there appears of stagnation like, oh my God, how is this as big as a B2B company, you can go in terms of the amount of demand that we acquire. Maybe there’s just no way to break through those walls. The thing that we always start with is, and it’s like, it’s pretty, pretty
foundational to growth is okay. Like where, where in 12 months are we trying to get to?
Kieran Flanagan 00:29:20 And then based upon that, we start to reverse engineer back through
the kind of core metrics. The reason we do that is because then you start to whittle away at like,
that’s hardly any of these things can scale to the level. We need them to scale. And so there’s
no point I’ll spend time on these small things when they just don’t add up to enough value. Like
we’re at a certain point where we have to get, we have to make large bets because the small
bets just won’t add up to something that’s different to us reverse engineering to the things, and
then trying to prioritize things and trying to do minimum viable versions of them. The one thing I
have learned you can minimal viable version of your way to like, especially the acquisition part of things like minimal viable version, your way to like very small marginal gains.
Kieran Flanagan 00:30:00 We’re in a place where we can take big bets because we have
resources. Like sometimes you have to take risky bets that you can’t size up accurately through
that model like that you have to be prepared to be really wrong. Right? And I think that is a hard
thing to do. But when you get to a certain size, you have to be prepared to risk falling flat on your face in a bigger style, because the minimum viable version of what you want to do, it’s such a high quality. Like you can’t really minimal viable version of that. You just have to d —
— o it to see if it will work or not. And so we’ve done some of that. Where were they failed? And
they, and they haven’t failed. And they’ve worked pretty well team structure. I talked about the
free, but just in terms of like frameworks and processes.
Kieran Flanagan 00:30:37 So let me give you a good example. We were a certain size with all of
our blogs. Like we were a blog strive, a lot of our growth. I think we, maybe we were at like three
to 5 million monthly visits. And we were like, oh, this is everything is stagnated. Now that’s
probably as big as you can see, we went back over and we really built this and I give all the
credit to that, to my search team. And on the blog team, the content team, they built these
amazing frameworks or how they like scientifically build editorial calendars to ensure that we can cover off every single piece of content that’s relevant to our audience. It has has a search traffic so that they reverse engineered into the problem. And then look the solutions to that, which is like, okay, well, could we be more methodical about how we actually build editorial calendars?
Kieran Flanagan 00:31:18 And now in each of that toy calendar, we build up each quarter, we size up the amount of available traffic that we can go after. So we have like, oh, the future editorial calendar is worth 2 million available searches in that calendar. We can get a percentage of that. Like, I can basically tell you the playbooks cause they’re branded. And they have like actual playbooks that are on our Wiki that have been instrumental into our set success. So if I was giving people advice, I would say, try to start where you want to be like, what is the end point? And then you try and reverse engineer your into your most important metrics. Look at the things that actually will add up to the success you need. Right. And try to get rid of all the rest. Try to really define the playbook around the thing that you want to try.
Kieran Flanagan 00:32:00 Them into here are some that I’m going to do minimal viable
version stuff. Here are some, I’m just going to take big bets on or they fail. They fail. And then
sweat the details like HubSpot has not our Mo we’re not successful on the acquisition side
because we figured anything out that anyone else hasn’t right. How do you grow a big business
on marketing search, paid product virality word am I, there’s not like horses out there, but we do
them to a certain, we, we just, we sweat the details, right? Every single thing that you can
optimize and improve upon, we do that. And I think that’s what, one of the reasons we’ve been
successful. Yeah.
Sean Ellis 00:32:32 So it’s interesting as you, as you were going through the different
challenges, the challenge of size is definitely one that I’ve, I’ve, I’ve experienced myself. I
remember at log me in when we got to around $50 million in revenue. And because we were, we were really leaning hard into freemium. We had about a hundred million devices with our
software on there yet trying to come up with new channels. There’s probably a lot of listeners
that, that think a champagne problem. Like, you know, they probably need to go and read the
Paul Graham do things that don’t scale that are just all about the hustle and grind. But it was
interesting because I did take that experience at log me in to Dropbox. And yeah, there was
enough elements at Dropbox early on that I, that I could, I could essentially say, okay, if we build
a marketing engine, that’s dependent a growth engine, that’s dependent on marketing spend.
Sean Ellis 00:33:28 It gets really hard to scale that long term because the, the channels that
can move the needle eventually really shrink down. So let’s really try to build a customer, get
customer kind of referral driven growth engine, because one it’s already happening really well in
Dropbox. And two, there’s some just natural product advantages with, you know, people sharing
files and, and collaborative folders and some other pieces. And, and it was interesting because
the growth at Dropbox was so much more consistent and linear all the way through a billion
dollar revenue run rate that when you’re kind of building that engine based on the bigger your,
your user base gets, the more powerful your growth engine gets, if you have to set it up. But it
was really interesting to have that conversation with drew the CEO the week of the public
launch. So it tended to be thinking that far ahead. And, but, but yeah, I mean, there’s obviously a ton of other factors that went in to, to continue to have growth to that level, but it is, I really liked you honing in on that challenge. That being huge
is not a, always an advantage when it comes to marketing, it becomes really hard to find things
on there.
Kieran Flanagan 00:34:39 Yeah, because the things you have to do, or I’d said as I was having thisconversation with a Cape, our CMO recently, the things you have to do, or just unnatural to what I mean by that is like, there’s no playbook for them. You’re doing something like, oh, like this is actually okay. We don’t know how this is going to go because there’s no historical context. You can’t look and go, what’s work here, here, here. You’re just like, I think this is work. Like we’re optimistic about this, but you’re kind of having to define it as you go along. It definitely forces you to stretch. It forces you to be an eternal optimist and it forces you to really stretch how you think about,
Ethan Garr 00:35:12 I think in, in growth, it’s a constant question of like, do we take
incremental bets or big bets? What should we be doing? And I think you’re making the point that
at scale, it becomes less of a, less of a conversation because you kind of have fewer options in
that department because the incremental bets just aren’t going to get you there. I’m curious,
especially for our audiences, they’re thinking about when to take the big bets or when to, when
to keep working incrementally. Do you have sort of your thoughts as you know, with your
organization, how you drive that culture, where we know when to take the right bets, when to
take the big bets and kind of, how do you think about making sure that everybody in your
organization now understands that they can make big mistakes? You know, if we take, make big
bets, we make big, we occasionally make big mistakes and it’s okay to do that.
Kieran Flanagan 00:35:56 So I think you’re a portfolio manager, right. And when you’re, when
you’re in a smaller company, all your portfolios are like, I don’t know the right analogy, but maybe like bonds, or like they’re, they’re, they’re, sure-fire bets, right? They have small incremental payback over a period of time, but they get you the type of boat that you need in that period of time. And then you start to like manage risks, right? You have maybe 80% in things that you have historical context for it people really the way I was thinking about things in terms of, I know there’s all these different models, the potential, the impact, the ease. And I think that really
important. One is their historical context. Like, do you have historical context to show that this
will work? Because it just makes things much more easier to do, like, we’ve done this before
some week someone’s done this before.
Kieran Flanagan 00:36:38 Like we know there’s an existing playbook that works that our store
context is really important. And so when you start to manage your portfolio, you have things that
I have historical context about it. I can do. I think they’re going to have some amount of upside. I
can kind of forecast it. And then I have some amount of my bets and things that I think that these are going to have weighted huge returns, but I have no way to build a realistic model around how do you build a culture of that? I think that, I think everyone has any tech people who are truly talented. The things that they really crave are a goal. How am I accountable to this goal? How are we going to track me? And I want autonomy to like, go out, go after this. Right. And that larger company that does start to get harder, right?
Kieran Flanagan 00:37:17 Because it’s just like lots more matrix matrix, and cross team initiatives and Alliance and other people. I think that you create a culture of allowing people to take big bets by having it in your operating model in some way. So we have a process where you can right there, kind of compare stories and you can write comp stories and seek funding from the company for large initiatives. And you have to do your due diligence. You have to shape up the problem. You have to show the data to show that it’s a problem. You have to show the potential impact of that problem. And then you get some resources and you can go build them a viable version and test that out. HubSpot was really built on experiments. Like most of the things that have become set successful as being someone trying to do things, wor —
— k in the things and experiment and things, it was built into the fabric of the company.
Kieran Flanagan 00:37:58 I think our, our problem wasn’t that people were ever afraid to take big bets. I think our problem was we probably didn’t have enough processes around it. And so you have people taking bets all over the places like, like, you’d go to the website and someone’s
changed the homepage, or they change the whole face. Like I think how do you put it into your
operating model? So people know, okay, there’s this is how I pitch for things. This is how they
get funded. This is how they get assessed. So it doesn’t feel like it’s biased in any way. Like it’s
assessed fairly against anyone else’s ideas. This is what the company really prioritize this year.
Like these are the big bets they want people to make in these areas and give people a forum
where they know how they can actually do that. That’s
Ethan Garr 00:38:33 Really helpful. And I think you make a really good point about historical
context, really becoming important in the decision making process. And you only gain that over
time. Sean and I were, we were just chatting a few days ago. I was making the point that we
were working with the company and their first set of experiments, all their math. It’s so hard to
guess on the math for these experiments. What’s the impact going to be? How confident are
we? Because there isn’t this historical context. But with what we were talking about is on the
second experiment, the follow on experiment from that, assuming that you get some sort of
confirmation, the math gets easier, right? Because now you have all those learnings. So what
you’re saying is that after almost 10 years at HubSpot, you have all of these learnings. If you can get everybody in the organization to really see those, those learnings and understand what
we’ve learned over time, those big bets become, I guess there’s less risk with those big bets
because you have some, you have more of a framework for knowing what might work. Then you
might have had a few years ago,
Kieran Flanagan 00:39:28 We have more storm content. We have so much to show our context
because we tried so much. That doesn’t mean there’s like things that, that is still hard to model.
Like we still build models. Sometimes I look at them all and I go, that doesn’t really matter what
the smallest says. Cause we really have no idea. I think the model, when you have no historical
context, one thing it’s good at doing is just telling you, is this worth your time, either, at least
telling you what? I think it could be 10 X, even though like, I don’t know, but like if I’m going in
there and I’m doing a model with no historical context and it’s like a two X return and you can’t
really get yourself motivated to make it bigger, cause you don’t feel it’s going to be bigger. It just
maybe allows you to like deprioritize things that, you know, the thing that historical context can
be where lots of historical contexts can actually be.
Kieran Flanagan 00:40:06 It’s mostly in your favorite, but where it can be problematic is where you did you, then you hire like lots more people rapidly. And they come in and they want to try the same things that you’ve done before haven’t worked. And you have, you’re like, oh, well we’ve tried that before and you shut them all down. Could you be like, oh, well, historical context would tell us this hasn’t worked before. And so I think you have to be really careful as well about, okay, well, have they framed up the problem correctly? Have they really thought about the impact? And if this is a potential solution and they want to try it again, we’ll let them because the best way people become good at their jobs is actually to fail. But you learn way more in SVB and wrong about something than you do being given something to just execute. And so you have to like find that balance where you use to start with context, to like direct people in the correct path, but not just shut everything down because it’s been done before, because maybe you didn’t do it well before. Maybe the person who did that, didn’t do a great job of that before.
Sean Ellis 00:40:52 It’s interesting. I think as you, as you get bigger, what you had said, like
people, people become better at their job through failing, but as you get bigger for most
organizations, there’s just not a lot of incentive to fail. Every failure you make is you stick your
neck out a little further to where you risk getting that, you know, that the best way to be able to stay in an organization is to kind of go unnoticed. I do my job. And so I’m just curious if there’s, if there’s mistakes that you see leaders make that maybe shuts down some of that creative problem solving, that’s so critical for
Kieran Flanagan 00:41:33 Figuring out success and getting to where you guys have gotten. That’s a great point. You don’t want to create a culture where the people who get promoted are the people who make no mistakes. Right? I think a, you want it, you want to kind of encourage that. I think again, it’s, if you put it into the operating model for me, like opera, entomology scale and just everything. And if you put it into the operating them all and show people that this is a forum to pitch things and that you do not, your expectation is not that this will be successful. Your expectation is that you will come back and tell us whether this is something we want to continue to invest in or not. I think your point would be that it’s how people see who, who do people physically see procrastinate in their careers.
Kieran Flanagan 00:42:10 And if they see people who are like, oh, they’re steady state. And they’re just like steadily increasing their career within the company that sets the tone for everyone else of how they get promoted within that company. If they see someone and they’re like, oh, that person did this thing that failed flame died. But they asked actually went on pivoted and did something else that becomes successful. And they’re doing really well in their career. I think that it’s like how you set that tone within your culture. I’ll tell you what a scaling company you need both. And you should reward both because you could, you can actually be biased in any either way because you need people who can just take programs. And their job is just to continue to make that program successful. And you don’t need them to continue to innovate on things like you actually don’t need that it’s waste of time.
Kieran Flanagan 00:42:47 It works great. They just need to keep it going. And they should be
rewarded for the same, like the same people who kind of get all the line that because it try to
figure out something new. I think if you reward either one, if you reward over-index in either one,
it’s actually bad for the culture. But trying to find that balance is really hard because in large
companies you actually need both and you don’t need everyone to be kind of experiment and
innovate at some sometime you just need people to do, to do their job.
Ethan Garr 00:43:13 So with that, is there a mistake that you’ve made or a failure you’ve had
that you’re very proud of? And in terms of how that has helped your,
Kieran Flanagan 00:43:21 Your organization? I remember within my first six to 12 months in
HubSpot, I was like, oh, I’m going to build out this amazing tool. Like I was like, I’m going to grow through tools before we even had freemium. And the reason I wanted it, it’s like all wrong.
Everything about this is wrong. The reason I wanted to build that to the list, because I got
fascinated by similar webs API as like pulling in all the data, I was like, oh, look at all the data.
And so I build this kind of like website. It was like a version of the website grader, but graded
blogs. So I was like, I’m going to build blog reader boards in each country where HubSpot has
like an office. And I didn’t put anything in and Ryan, how it would grow. I didn’t put anything in
and Ryan how it would create business or demand for HubSpot.
Kieran Flanagan 00:44:00 And we spent real money. Like I spent real money of my budget building this amazing tool. And I had like, you would go there, you could get badge in. It would update every kind of day, pull in Moz data, similar web data. And then we went and we did outreach to old people and put some of them put badges on the websites. And then someone was like, okay, well what’s the like Mo like how do we build recurring traffic to this? And I was like, and what business, how, how do you convert this into things for hospital? I was like, oh yeah, that’s a component.
Kieran Flanagan 00:44:29 Like I was like, I was like, okay, well the one thing I had to try and stop, the one thing I have to like be diligent about is I know I get carried away. Like I know I just, like, I see something, I just want to do it. And actually working in growth. That’s why I think all
marketers should, at least, even if you don’t work in like a growth oriented function, you should learn the growth framework in the same way. You learn marketing frameworks, because it does teach you to step through problems in a linear sequenced way. And it teaches you the one thing I’ve learned from working very close. Like my, my background was computer science. So as a software engineer, but I kind of lost that when I got into marketing. And I think when I started working with product and engineering more, I realized that they’re just way better at articulating problems and obsessing\ over problems and never started anything until they properly understand the problem. And I think that’s the learning. Like if you think about that tool, I actually didn’t have a problem. Like wiih Sullivan, I just had like a cool thing I wanted to do. I had a solution in mind, but no problems to solve. I think that’s been one of the bigger lessons that I’ve took from working in growth. And I think why I think working across disciplines and working with other teams is great for everyone because you just learn the ways that they approach work.
Sean Ellis 00:45:36 Yeah. It’s interesting. How definitely in my experience, the best way to
learn is to make a mistake. It’s somehow just like, um, opened your mind up to be so much more receptive and like, oh crap. How do I, how do I put these in order? So that the next time I’m not making the same mistakes over and over. And then it’s funny. I mean, that’s the most of my time these days is spent on, on go practice, kind of a simulator program for learning growth. And the, the whole idea is that people are constantly making mistakes as they navigate through trying to grow a business and they get real time feedback on those mistakes. But yeah, but it is, it is interesting to, to kind of see that learning growth has always been really hard. And I was really challenged with it. I was challenged with figuring out how to help people learn it, but I wish I had kind of thought of this simulator approach, but it’s actually my partner on the program who got really excited when I saw it. So I definitely, I think that there’s something there. So obviously we could, we could go on and ask a ton more questions. We’re going to schedule a whole separate NLP. But one question we really like to end on is what do you feel like you understand about growth today that you may not have understood a couple of years?
Kieran Flanagan 00:46:53 I think a obsessive over problem team design team design matters more than you think. I think growth has frameworks, right? It just has great frameworks. You can use to understand how the business grows and understand what your key leavers are in that. And I think that’s the thing that growth brings to the discipline of brains is like teaching you how the business grows and then teaches you how to isolate the problems within that business model that you should solve and focus on. And it brings that discipline. You know, when I got into it, I just thought it sounded cool. I knew your work and you others’ work. And I was like, oh, this is cool. I’m going to go and do growth. And, uh, when you, when you go in there, I guess I talked to someone recently and I was like, instead of doing an MBA, go learn growth, like know learning how modern businesses grow and that I think it teaches you how to bully, assess how business grows and how you can impact that.
Sean Ellis 00:47:39 Yeah. I mean, the good news is that I think MBA programs are moving
more toward teaching this way. I actually just, just spoke in mark where there’s is a Harvard
business school. Course. I know you worked with mark. Yeah. And that’s exactly how he teaches it. He, yeah. He teaches it in a simulator type way. And then I actually just spoke in NCI there, one of their MBA classes Monday of this week, and same thing, I essentially took the team through a, what would you do? Three step process based on, on a set of challenges I had at log me in and it was cool. The professor at the end was like, that’s the best guest lecture we’ve ever had. It’s just, you know, this stuff is kind of boring. It’s just, if you’re just sort of like one way teaching it, but yeah, it is a creative problem solving approach that as you come up across those problems and try to come up with solutions and then being able to, you know, the, the, the one that I shared with them was kind of a thing at log me in where we, we couldn’t scale beyond $10,000 a month in profitable spending.
Sean Ellis 00:48:46 And I was being told by the CEO to, to spend a hundred thousand
dollars a month and I could not find the panels, but here’s what we did. I took them through
these three steps. And by the way, at the end of this, within three months, I was able to spend $1 million with a three month payback on marketing dollars. What would you do? And, and so it’s just really like, you just see people just get super engaged and
Kieran Flanagan 00:49:13 Yeah, I think it’s a modern approach to business. Again, I advocate for maybe not all of it as applicable, but to your point where you said is like, it’s a way to approach problems. I think all people in, in any kind of function will benefit from going some boom going through some version of it, because it does teach you the sequences of how to work through problems. And I think that’s, that’s important for everyone who’s building businesses. Yeah.
Sean Ellis 00:49:35 And that’s part of the reason why Ethan and I have started asking more
about how do you, how do you create an environment that is conducive to creative problem
solving and risk-taking, and, and some of those, some of those things where I’ve seen enough
environments where it’s really easy to shut down that creativity stay inside the box. And that’s
where I think the stagnation happens. Yeah. I agree.
Ethan Garr 00:49:58 Yeah. I think you’ve done a great job Kieran Flanagan today of like really surfacing some of the key things you can do, like to make that actionable. Like how do you overcome these things? How do you, how do you work as a team? Talk to people who are better than you ike great piece of advice. It’s one, especially when, earlier in our careers, it’s always, you know, there’s always this fear. Like people will know that we don’t know everything. People already know, you don’t know everything,
Sean Ellis 00:50:22 But yeah. Ability to figure stuff out.
Ethan Garr 00:50:26 So for me, that was like a really great key takeaway. And, you know, I
think just sharing with us the thought about how over time, you know, you have to make big bets
at scale. You have no other choice, but how do you deal with that? How do you create a culture
where you can make mistakes? I’m a big believer of, you know, when you make a mistake,
stand up on the table and yell at the top of your lungs. Cause the key is when everyone knows
that it’s okay to make mistakes. That’s how, that’s how people learn, how to make mistakes once instead of making the same one over and over again. So exactly. Yeah. Really great stuff. I really appreciate you taking the time to share all your insights with our audience today.
Sean Ellis 00:50:59 Set up my profile at network dot HubSpot. Kieran Flanagan, thank you so much for sharing that HubSpot story. It’s been, it’s been something that I’ve viewed for a long time, but it’s really the most in-depth look that I’ve had someone who’s been along that journey for a long time. I know it may be sometimes embarrassing to, I know it takes a really dynamic person to be able to navigate for that long with, with a team. That’s a, that’s probably more through many generations as you’ve gone through it. And the beauty of having you there so long is that you can really help, help share the twists and turns of that journey. Yeah. I appreciate that. Yeah. Thank you so much for everything and for those listening in, thanks for tuning in and we’ll get another episode out soon.
Ethan Garr 00:51:54 Thanks for listening to the breakout growth podcast. Please take a
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