Dharmesh Shah's Ambitious Climb

Building HubSpot Into a $20B+ CRM Platform

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Dharmesh Shah, Co-founder and CTO of HubSpot, is easily one of the most unique and impressive founders you’ll hear about.

Not only did Dharmesh build HubSpot into a public company valued at more than $20 billion, but he also managed to create an award-winning culture along the way.

He’s founded multiple companies in his career, made 80+ angel investments, and, as crazy as it sounds, he’s a leader at a company with thousands of employees, yet he has no direct reports.

Let’s get to it.

Early Days

Dharmesh came from humble beginnings.

In his deeply personal LinkedIn article, he shares a bit more about his early life:

I was born in Ankleshwar, Gujarat, a tiny town in India. I don't know what the population was back then, but it was probably fewer than 10,000 people. We had one somewhat-paved road. There were no traffic lights or stop signs. My mom's family lived at the end of a dusty lane. There was no hospital nearby and even if there had been, I don't know that my mom would have gone to it. So, I was delivered at home. She had a mid-wife to help (who was a family friend). There was no doctor. I was the first child, and my mom was 18 at the time.

Dharmesh Shah

Dharmesh would describe himself as an “odd child” and would view his being different as a problem for more than 25 years of his life.

While Dharmesh was attending college in India, studying mechanical engineering, his parents moved to the United States, and, while visiting them the summer of his second year in college, he fell in love:

While I was an undergraduate, my parents moved back to the USA. I came to visit them during the summer of my second year in college. People had always told me, “You really like Math. You should check out this computer stuff.” Running a computer in India is expensive because you have to have an airconditioned room. It has to relatively clean. I never got a chance to touch a computer while I was in high school or undergrad. I came here and my family was living in Indiana.

Nearby, there was Purdue University. They had summer classes on Introduction to Computers. This was the proverbial love-at-first-sight moment. Even though I had not packed any of my things, I didn’t go back. I enrolled myself that fall into undergrad Computer Science. I was fortunate to find that love early on. I’ve been in computer software for most of my professional life.

Dharmesh Shah

Dharmesh’s story reminds me of when Patrick Collison got access to the internet for the first time and completely immersed himself in it. Amazing just how impactful technology can be on us.

It would take Dharmesh 7 years to get his four-year degree because he was working full-time as well, initially making $3.65/hour in his first job after coming to the U.S.

After transferring from Purdue to the University of Alabama at Birmingham, he’d graduate with a computer science degree and start his career as a software developer at SunGard Employee Benefit Systems, a company later acquired by FIS.

This would be the launch point for his first major career win.

Pyramid Digital Solutions

At 24 years old, two years after starting as a software developer at SunGard, Dharmesh launched his own company, Pyramid Digital Solutions.

This company was an enterprise software startup in the financial services sector and one he’d end up running for more than 11 years.

While Dharmesh would later raise venture capital for HubSpot, this was a company he decided to bootstrap, building it with his brother.

One of the most interesting things about the company was how he got it off the ground.

As a self-proclaimed introvert, Dharmesh didn’t like selling.

As a result, he showcased his resourcefulness, striking a distribution deal with Sungard, the company he left to build his startup. They would get 50% of the revenue they brought in for him, a deal they likely never would have done had they not had a prior relationship with him.

And they’d be the main distributor for those first few years, with Dharmesh eventually expanding with more partnerships.

In August 2005, Pyramid Digital Solutions was acquired for about $15 million by the same company Dharmesh left to start it in the first place.

When asked later in an interview on My First Million about the impact that had on him, Dharmesh offered up this:

At the time when I was younger, I was very very focused on money, I had a very kinda modest upbringing and I was like okay well, it wasn’t about the money and the accumulation of it, it was the freedom.

Dharmesh Shah

For Dharmesh, the sale of Pyramid had a dramatic impact on his life.

The crazy part looking back now is that Pyramid is very much a footnote in Dharmesh’s career, much like what Sam Altman wrote:

It’s useful to focus on adding another zero to whatever you define as your success metric—money, status, impact on the world, or whatever. I am willing to take as much time as needed between projects to find my next thing. But I always want it to be a project that, if successful, will make the rest of my career look like a footnote.

Sam Altman

But we’re not there yet.

Here’s how Dharmesh started the company that would make him most of his wealth.

Starting Hubspot

After selling Pyramid, Dharmesh decided to go back to school, pursuing a graduate business degree at MIT.

He’s 35 or 36 at this time and his plan is to get his graduate degree, then a Ph.D., then become a professor. He even promises his wife he’s not going to start another company.

But then he meets Brian Halligan.

It all happened at a cocktail party at MIT.

Dharmesh, who as you might recall is very introverted at this time, has his wife scout the room, talk to people, and recommend who Dharmesh should meet.

She talks to Brian, but doesn’t think he’d get along well with Dharmesh - they seem too different, with Brian being a sales guy interested in sports and Dharmesh being this introverted programmer.

Dharmesh does end up saying hi to Brian at this party, but they don’t talk much.

However, after taking a few classes together at MIT, they eventually hit it off, bonding over their shared passion for SMBs.

Brian describes the first project they worked on together:

We started talking about HubSpot at lunch that day, it was something called LegalSpot, not HubSpot, which was going to be a suite of applications to help you manage your law firm.

We tinkered with it all through business school. We put it in the business plan competition, the $50,000, now it's $100,000, business plan competition. We worked on it in a class called New Enterprises. We tinkered with the project for a while.

Then when I graduated, a year before he did, actually, he was on a different track than I was, and I spent about nine months in a little venture firm as a EIR, and we tinkered with it. We'd meet once or twice a week, and work on the idea, and pitch it to law firms.

We kind of zigged and zagged a couple times. Then during that time, we decided, well, it's not about building a suite of applications for a law firm. One of the applications we were talking about was a marketing application, was how do you get found on the Internet, how do you get found in Google and social, how do you get found in the blogosphere? How do you grow a business? And all the law firms are interested in that.

And so we pivoted, instead of being a vertically specific application for law firms, we were going to build a marketing application for everyone.

Brian Halligan

During that time, Dharmesh also started his blog, OnStartups, a site that would grow to hundreds of thousands of subscribers and that they’d actually use to announce HubSpot.

The site also influenced the problem they’d pursue at HubSpot, taking a page out of Apple’s playbook:

There’s an interesting story in between. Brian and I had this idea that marketing was broken, and needed to shift from outbound to inbound marketing. Brian graduated a year ahead of me. He graduated in 2005. His first job after graduation was as an entrepreneur-in-residence at a venture capital firm. His job was to help these portfolio companies grow. He and I would meet weekly and just talk about general ideas.

Here’s the thing that struck us both. He would look at the traffic that I’m getting on my blog. He said, “What are you doing on your blog that’s getting all this traffic? I have these venture-backed rich people that have VP’s of Marketing and yet you are getting 10x the traffic on your blog.” My response was, “There’s this discipline called SEO. There are these new social media sites.” He wanted to do it in his portfolio companies. I’m like, “Put up a WordPress. Put a Google Analytics ad.” He’s like, “That’s a science project. They don’t have time for that.”

That was the proverbial spark. We identified that this was a business issue. Some of the best entrepreneurial advice I’ve given and heard is to do one thing really well. HubSpot, at its genesis, did the exact opposite. We built a lot of tools. The whole reason for HubSpot to exist is that there weren’t these tools out there; the problem is the tools are just too hard. In order for us to make it easy, we’re going to have to build all of it in an integrated way the same way Apple did.

In order to have consumers consuming, the iPod didn’t hold more GB’s or any of that. In order to enjoy digital technology at that time, you had to know about technology to get the music on your device. Apple said, “We’re going to give you a device. We also have iTunes. We’re also going to have content partnerships with all the music studios.” It’s not like they invented the MP3 player; they just made it accessible.

Dharmesh Shah

They would build a lead generation software business.

In a later interview, Dharmesh would describe their ambitions at the time:

We didn’t want a single or a double hit. We wanted to swing for the fences and 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 at being a spectacular outcome, even if that means we’re possibly going to go down and crash and burn in flames.

Dharmesh Shah

So important to know what you actually want from your company.

After an initial $500k investment from Dharmesh himself, they end up raising $1 million of angel capital in a family and friends round.

And they’re ready to launch.


In June 2006, Dharmesh and Brian officially launch HubSpot.

Forbes described the scene:

The pair launched HubSpot in 2006 in a bright orange workspace in Cambridge, a mile away from MIT. The software startup focused on “inbound marketing,” which uses tools like blogging, marketing events and paid ads to help companies attract, retain and expand their customer base.


A funny aspect of HubSpot in the early days was their pricing.

It took all of about 3 minutes for Brian and Dharmesh to decide on the price for their software subscription.

They tossed out a number, $250/month, and stuck with it.

Mind you, the price was only $250/month.

No tiered pricing.

No premium pricing.

Just $250/month for everyone.

The software would stay at that price for years.

But it was actually something that was very important in the early days.

Years later, in an interview with Harry Stebbings, Dharmesh would explain how that month-to-month pricing allowed them to get more data points since customers always had the option to leave every month (As opposed to annual pricing).

They figured out more about what was making them stay and how HubSpot could offer more value.

Since they were targeting SMBs, with shorter sales cycles than enterprise customers, this learning was compounded.

But early on, investors and other people Dharmesh and Brian talked to didn’t think SMBs were even the right market to go after, something Dharmesh described years later:

You’re trying to acquire customers, and it’s expensive to reach SMBs, because…I don’t know why. It just is, and then when you get them, they churn at a higher rate, and so it’s like the math just doesn’t work. You can’t make the economics work, but that’s exactly what we did.

We did raise capital along the way. My guess is that our early investors humored us, and said, “Yeah, they say SMB now, but they’re not stupid. They’re going to figure out that enterprise is the actual way to go, and it’ll be OK.” That was, I think, the thought in their head.

They underestimated our stupidity, as it turns out. We’re now nine and a half years in, and we are still unequivocally SMB, working out OK so far, by the way. It’s been fine.

Dharmesh Shah

So they know who their customer is, they have a product, and they have a price - how did they actually get their early customers?

Blogging was a big part of it.

Brian expanded on their strategy in the early days in an interview with Y Combinator:

I remember the early days of HubSpot. Dharmesh and I would write two blog articles a week, and we'd compete to see who could get more leads from the article. It was a very friendly competition, but we used to do that.

We figured out, you have to write really good content, of course, that's table stakes. You have to have a great title, and we'd A/B test the titles a lot, and you had to have a large presence in the social media sphere, so you yourself could market it.

Maybe you could do that through some of your friends as well. You could get it to go, and once a week or so, we would have a home run blog article, and that's how we really started the company.

Brian Halligan

Dharmesh launched the blog they wrote on through a post on his own blog, OnStartups.

Soon after launch, they’d also implement what Dharmesh would describe as “one of the most brilliant things we did.”

Customer Happiness Index

About 3 months into the company, they launched the Customer Happiness Index (CHI).

People would assume that with a SaaS company if customers aren’t canceling, they must be happy with the product.

Not necessarily the case.

In a SaaStr presentation, Dharmesh explained the brilliant solution they came up with to solve this:

What you have to do, what we did at HubSpot, I’ll give you the very short version of it. In the first three-odd years, we built in the first year this thing called the Customer Happiness Index. It was a model that we developed internally that looked at all the data available to us, product usage, which sales rep sold it, what day of the week they bought on, which customer service…”

Everything we could possibly have about the customer all in one database, and we did regression analysis. The idea behind the Customer Happiness Index was for it to be a predictive model that says knowing everything we know, how likely is this customer to still be a customer next month.

We tweaked the model, as you would expect, being a bunch of MIT folks. We made the model relatively accurate, so we could know. It’s like, “OK, Mr. Smith.” We had a team that does this now. “Mr. Smith, I know you don’t know this, but you’re going to cancel in 4.2 months. Is there anything we can do to help you? By the way, it’s all included in the product price, anyway. Why don’t you use this and this? Can I help you with that?” One of the most brilliant things that we did.

The idea here is don’t wait until after they cancel to analyze the data. A lot of the data you need, you already have. Cancellation is a post facto indicator of unhappiness. Try to catch it earlier so you can do something about it.

Dharmesh Shah

The biggest value of the Customer Happiness Index?


A single number they can look to for how things impact it.

And how did they use it at HubSpot?

They’d have customer success managers look at the lowest CHI customers, and they would call them, asking what they could do to make them happy.

Sure, some customers ended up canceling anyways, but that strategy ended up influencing many of them to stay.

This also helped pave the way for continued growth.

Series A, B, and C

In September 2007, HubSpot raises a $5 million Series A led by General Catalyst.

But it wasn’t easy:

Despite the fact that we had a bunch of chips in our favor, it was hard raising our Series A. It was not easy was that we were in the small business space. There was only one other company that was successful in focusing on small businesses. That’s Intuit. Intersect that with the fact that we’re in the marketing space. Nobody had created anything of any magnitude. The biggest exit that the industry has seen was Omniture. It’s not something that software was used for a lot.

Dharmesh Shah

They do $255k in revenue in 2007.

In May 2008, they raise a $12 million Series B and that same year launched Website Grader, a very important tool for them, and one that’s still popular to this day.

The goal of this tool was simple: “Help anyone with a website evaluate its effectiveness at attracting an audience of interested and relevant buyers.“

Brian described its value:

It gave us a lot of credibility. I think about selling, in modern selling, it's about helping people understand that they have a problem. And really making that problem real to them. In the early days of HubSpot, that was a tool to really point out, boy, you're falling behind the competition, there's a lot of low-hanging fruit here, you're falling behind all these other folks, what are you going to do? Oh, you need some help with that? Well, let me show you a demo of our software.

Brian Halligan

HubSpot would do $2.2 million in revenue in 2008, grow that to $6.6 million in 2009, and in October 2009 raise a $16 million Series C.

In the next year, however, they’d make a big shift in the company.

No New Sales Reps

In 2010, HubSpot would do more than $15 million in revenue.

By August of that year, they had 3,255 total customers and 180 employees, 60 of which were salespeople.

That year, they decide to make a change, putting their budget for marketing and hiring new salespeople to $0.

Instead, they poured all their cash into product and experience.


Because they didn’t think the path they were on would lead them to create the multi-billion dollar company they wanted.

It wasn’t a decision that would last forever, but it was part of their constant iteration every few months of the business.

Another part of that iteration?

How they approached the services side of the business, which represented a small percentage of their revenue and which they thought was break even.

Dharmesh described how they found out the true value of these services through testing.

Typically, new customers would pay $125/hour for 4-8 hours with a very experienced service person, essentially paid support, at HubSpot.

Wait, services?

Wasn’t this just a software company?

Yes, services for onboarding and utilizing the platform to the max.

For a month, Dharmesh and his team tested what would happen if they didn’t onboard new customers.

The result?

It led to much unhappier customers.

And when they tested spending more time with customers, the customers got even happier, as measured by their happiness index lift.

The takeaway message?

Question assumptions.

Since happiness correlated very well with LTV, it was clear these services were needed.

This level of iteration and execution, again and again, fueled their growth.

In 2011 they’d do $28.6 million in revenue and raise a $32 million Series D early in the year.

By 2012, they were doing more than $50 million in revenue and raised a $35 million Series E.

The next year, Dharmesh would undertake one of the most important tasks in the company - creating their now-famous Culture Code.

HubSpot Culture Code

In 2013, HubSpot does more than $77 million in revenue and opens their first international office in Dublin, Ireland.

They also launch The HubSpot Culture Code, which is periodically updated over time and is now a 128-page deck available for free.

It started after Dharmesh’s co-founder, Brian, met with a bunch of other CEOs.

They stressed the importance of culture to Brian and how “If you mess that up, nothing else will matter.”

Brian, of course, relayed that to Dharmesh, asking him to take on the challenge:

Then we had a founders’ dinner shortly thereafter. He told me about this meeting. He’s like, “Oh yeah. I had my group meeting with the CEOs and evidently culture is like super important. It’s going to determine our destiny.” This is the sentence I won’t forget. It’s like, “Dharmesh, why don’t you go do that?”

So I look at him funny. It’s like, okay, I don’t know what that means. Of all the people in the company, I’m the one that likes people the least. Why would I be the one to dig into culture? But he was a much busier person than I was. I’m like, okay, well, how hard could this be? There were fewer than a hundred people at the time.

I looked at it like an engineer would look at it, which is, okay, if I had to write a predictive function to calculate the probability that any given HubSpot person was going to succeed and be one of our stars, I don’t know exactly what the weights are, but what would the coefficients be? What are the kinds of things that would likely play into it, can I figure that out, at least kind of the first order?

So I kind of dug in. I got the data from the team. It’s like, okay, are you happy to HubSpot? Why are you happy at HubSpot, if you are, and why you’re not, if you’re not. That was the genesis. So it kind of started really small as a kind of this internal thing.

I wrote this slide deck, which was 16 slides at the time, called The Culture Code.

Dharmesh Shah

In a LinkedIn article from Dharmesh in 2018, he’d expand on that culture:

I've read a lot of the literature on diversity and inclusion. I've watched YouTube videos. I've I've engaged in some friendly debate. The evidence is strong and growing: diverse teams do better. Especially at scale. So, it should be no surprise that I'm in support of diversity at HubSpot.

Most of my time and almost all of my ego and identity is tied to the success of HubSpot and I do whatever I can to help HubSpot. And it's clear to me that our success is highly correlated to our ability to attract and retain a diverse pool of smart, passionate, caring people.

Dharmesh Shah

Dharmesh would spend 300 hours coming up with the culture code deck, getting into the details of it, something he very much enjoys.

Reflecting later on HubSpot’s culture, it’s actually what he would describe as one of the biggest mistakes he made.

The first 6 hires were all men from MIT. They hadn’t deliberately thought about culture and the value of having a diverse team back then.

Dharmesh mentioned how if he could do it all over again, he’d change that.

This is also the year they start to think about the next phase of the company, preparing for one of the most important years of their company’s existence.


On October 10th, 2014, HubSpot went live on the NYSE.

They did $115.9 million in revenue that year.

Prior to the IPO, in September, they make a big announcement at their #INBOUND14 conference, launching their sales platform, which includes a free CRM.

This was something that was decided a year before the IPO and was their second major product after starting as a marketing platform.

Dharmesh was asked in an interview when the right time is to launch a second product and gave these three scenarios:

  1. You’re growing nicely, but there aren’t many customers to sell to who you’d be an ideal fit for

  2. The category you’re in is declining (Essentially, the ceiling is dropping)

  3. There is an adjacent market that is a natural fit for the market you’re in and, for growth and defense reasons, you need to be in it

The last scenario was the case with HubSpot.

They started as marketing software, a product that now does $1B+ in ARR, but 7 years in they saw the writing on the wall.

Leads generated through HubSpot were going to a CRM and it was clear that marketing and sales go together.

If they didn’t go into a second category, launching their own CRM, the CRM companies would certainly go into marketing and that would be a problem for HubSpot.

It paid off big time.


Here’s HubSpot’s revenue for the next three years:

  • 2015 - $181 million

  • 2016 - $271 million

  • 2017 - $375 million

They’d launch HubSpot Academy to help train professionals on digital marketing and HubSpot Ventures to invest in “early- and growth-stage software companies with the potential to deliver unique value to HubSpot’s customer base.”

They do $513 million in revenue in 2018, $674 million in 2019, and in 2020, the year they’re named #1 on Glassdoor’s Best Places to Work, they do $883 million in revenue.

HubSpot would have 4,000 employees by the end of 2020.

In an interview in late 2020, reflecting on the evolution of the CRM, Dharmesh shared the importance of creating a platform:

In terms of CRM as an industry, I think what’s happened is that if you look at kind of first-generation CRM, Siebel and those folks, that kind of layed the early groundwork, and we have Salesforce for kind of what we think of as generation two, the one thing we’ve learned, though, is that in the early formation CRMs, one of the questions I’ve asked myself is why are there not more CRM software companies? Like there should be literally hundreds, right? There’s hundreds of marketing software apps, and arguably CRM is much more important.

What’s happened now is that in order to really effectively compete in the CRM industry, you can’t just be that database, you have to be a platform. The thing that’s becoming clear now is when most people think of a platform, it’s like, oh, other people are building on top of it. You have APIs and you can kind of extend it. That’s all very, very true. But the other part of it is to what degree is the company itself leveraging the platform in terms of are the various kind of software services being used cohesively across the whole thing.

Dharmesh Shah

The next year would mark another milestone in Dharmesh’s life and include one of their most significant acquisitions.

Billionaire Hustle

In 2021, HubSpot passes $1 billion in revenue for the first time, finishing the year with $1.3 billion in revenue.

In February, Axios breaks the news that HubSpot is acquiring The Hustle for a reported $27 million.

The entrepreneur and business-focused newsletter started by Sam Parr has 1.5 million subscribers and also includes a well-known podcast, My First Million, and a premium subscription, Trends.

HubSpot’s VP of Marketing, Kieran Flanagan, gave his take as to why they did it:

By acquiring The Hustle, we’ll be able to better meet the needs of these scaling companies by delivering educational, business and tech trend content in their preferred formats. Sam and his team have a proven ability to create content that entrepreneurs, startups and scaling companies are deeply passionate about, and I’m excited to bring them on board to take that work to the next level.

Kieran Flanagan

HubSpot hadn’t historically done many acquisitions.

In an interview Dharmesh did with Sam and Shaan for My First Million, he mentioned the acquisition as being one of the better things HubSpot has done as far as strategy.

He’d go on to say that more SaaS companies will own their distribution, not relying as heavily on buying or renting audiences.

In September 2021, after their stock surges, Dharmesh becomes a billionaire, owning a 3.4% stake in HubSpot at the time. Combined with other assets, Forbes estimates Dharmesh has a net worth of $1.1 billion at the time.

An amazing accomplishment for anyone, let alone someone who grew up in a small town in India.

And Dharmesh’s plan with all that money?

To give away 90+ percent of it.

The joke with his wife is that he wants to own the world while she wants to save it. He’s the capitalist. She’s the one running her foundation.

Dharmesh talked in an interview about how the first half of life is spent converting time to money, while the back half of life you’re trying to buy back time.

He explained how once he was making $10, $20, $50 per hour and he was an engineer and could fill his hours with work, in his early 20s he got a bump to $125/hour in the 1990s in Birmingham, Alabama, he made the decision that if there’s anything that could be done spending less than $125/hour he’d delegate that.

And now, had he worked 30 years for 60 hours/week, his average hourly rate would be $10k/hour though it’s backloaded, that’s effectively his hourly rate, so he wouldn’t spend his time on anything that isn’t worth at least that.

His takeaway message:

The short message is, most people don’t value their time enough and don’t think about it objectively enough, and it, like anything else is a resource and is finite, but put a number on it. Then ask yourself, what are the things I’m doing with my time that are not worth that?

Dharmesh Shah

Dharmesh Today

Dharmesh is worth hundreds of millions of dollars, yet still has an insecurity, due to his very modest upbringing, that he’s playing catchup.

He talked about Mark Zuckerberg and Bill Gates programming at a young age and going to the best schools and asks himself if he even has a fighting chance given that he started later.

I found this interesting. He still has that chip on his shoulder.

And he hasn’t stopped building things either.

During the peak Wordle craze, he launched a competitor, WordPlay.

Wanting to walk his son, who was learning the programming language Python at the time, through the process of launching a product, Dharmesh built WordPlay with Python as well. He showed his son the product, what he was going to tweet to launch it, and what went into the whole process.

WordPlay ended up taking off, getting 9 million players to use it.

At HubSpot today, Dharmesh is focused on three primary things:

  1. Platform

  2. Brand (The story of HubSpot)

  3. Boldness (Which is the longest running and it’s about how he pushes the organization to take more calculated risks, something he thinks all companies need to do.)

He mentioned how he always only has 3 things to work on, hammering home the importance of focus.

And, over the course of his career, that focus has certainly paid off.

In 2022, HubSpot’s revenue continued to climb, doing $1.7 billion.

Not bad for a company many thought was a terrible idea and would never scale.

Dharmesh the Investor

You can’t tell the story of Dharmesh without mentioning his investments.

In an interview in 2021, he shared a little about his unique investing experience:

I’ve made 95 angel investments throughout my career. For a vast majority of them, I’ve never met the founders. I never lead the deals.

Historically, I don’t do follow-ons because that requires tracking. That has been my MO. Even though I don’t meet the founders, I still like to believe that I invest in people. My sets of input are different. I can tell you in 150-word emails whether someone is a jerk or not. I would take my angel portfolio and put it up against any early-stage investor on the planet.

Coinbase was a big hit. I was the first money in Okta, Dropbox, and Stack Overflow. They’ve already returned 30 times my original investment.

Dharmesh Shah

And a bit more on his approach to investing:

Most of the deal flow comes from my immediate network. A lot of times, I invest in the same founder across multiple companies. In my experience so far, second companies end up being much better than the first one. I had this strong belief in cryptocurrency back when it wasn’t as cool. I felt like this thing needed to exist. I have a mini framework for assessing ideas.

The number one thing is the potential. If all the stars aligned, how big could this be? Number two is the probability of that outcome. The mistake people make is looking at the probability of success and saying, “I only have a 1% success rate. I better not do it.”

The right way to approach it is the statistical way, which is the expected value. Don’t look at the probability of success. Multiply that by the outcome if that thing is successful. The third is passion or proximity. Am I excited about this or is it close to something that I care about? Those are the three factors that I look for.

Dharmesh Shah

He got started angel investing while at MIT when he had promised his wife he wouldn’t start another company.

His thought?

I’ll invest in startups so I can still be involved.

He also wrote an insightful article with his lessons from angel investing which I’ve read a few times and is worth checking out.

Dharmesh’s Wisdom

In each edition of the Just Go Grind newsletter, I like to include a few more quotes at the end from my research into the founder who is featured, sharing their wisdom.

On what’s needed for successful co-founder relationships:

I think the number one thing is mutual respect and admiration. Number two thing, maybe even the number one thing, is you have to actually enjoy spending time with that person. As simple as that sounds, if that’s not the case, if you’re just doing it for the money, you’re doing it for the success, and you just don’t like being around that other individual, the startup is not going to work. More startups fail from co-founder conflict probably than any other reason.

Dharmesh Shah

I don’t want to spend 10, 20, 30 years of my life getting passively good at something. I’m a big believer of taking your strengths, whatever they are, and put all of your energy into amplifying your strengths and getting really really good at thing and don’t worry about your weaknesses all that much. I don’t want to worry about my weakness managing people.

Dharmesh Shah

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 by reading the top 3 books on it and practicing the craft.

Dharmesh Shah

On moving from SMB to Enterprise:

As you move up, every single metric you track will improve. Everything. Not like, “oh this got better and this.” Just about everything you track will look better. Retention is better. Better ARPU. All those things will look better.

The one thing over the long term that almost is never better is the competitive dynamic because everyone got pulled up, so now you’re sitting here in the enterprise thing and you’re duking it out with every other company that over the course of the last n years has also been pulled up.

And now it’s like, oh I’m now up against the incumbent that’s really better at this than I am, it’s like okay what is it that you have that’s so special that’s going to allow you to scale up in enterprise?

Dharmesh Shah

On the challenges of freemium and a brilliant solution:

One of the big challenges with freemium is you have to decide what that small piece is. There are issues around do people devalue the big thing because some portion of it’s available for free, or do you get bucketed into something else?

What we did is to say, “Instead of giving a part of the solution away, why don’t we create a tool that surfaces the problem that they have? That increases the likelihood that they’ll buy the full solution.” It has worked brilliantly for us.

Dharmesh Shah

On why HubSpot succeeded:

When people look at HubSpot, it’s this success story. I’d remind viewers and entrepreneurs out there that HubSpot didn’t start with a particularly brilliant idea. Most of our success is attributed to two things. One is a maniacal focus on the customer problem. Everyone would ask us, “It’s great that you started with small businesses. What is your plan to build enterprise?” We resisted that. We focused on our customers.

The second thing is just raw execution. We were fortunate to bring great people onto the team. The culture of the company was strong. Most entrepreneurs don’t spend enough time thinking about the culture they want to create. I understand that hesitation. Some may say, “We have products to build. Culture is something bigger companies worry about.”

Dharmesh Shah

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